Litigating California Wage & Hour and Labor Code Class Actions

expectations and the realistic requirements of the job, shall be considered in
determining whether the employee satisfies this requirement. 361
Given California’s complete rejection of any form of qualitative test for exempt status, it
would be possible for one manager to spend only 45 percent of his or her time performing
exempt tasks (or closely and directly related tasks), and for another manager in the same
position to spend 55 percent. The first manager would not be exempt, while the second
manager would be exempt. In Nordquist v. McGraw-Hill Broadcasting Co., 362 this is
precisely what happened: the court of appeal refused to rely on another court’s ruling that
the plaintiff’s own successor was exempt because the inquiry was too “fact specific.” While
Nordquist was not a class action, its reasoning seemed inconsistent with the notion that
exempt misclassification cases would be good candidates for class litigation.
In light of the various pronouncements about the individualized inquiry necessary to
determine an employee’s exempt status, the defense bar was hopeful that courts would
disapprove of a plaintiff obtaining class certification on the ground that a class of managers
was uniformly misclassified as exempt. If an employer could bring forth some declarations
from managers attesting that they spend more than half their time on exempt tasks, the
best a plaintiff could argue was that many managers at other stores spent the majority of
their time on non-exempt tasks. In any case, the finder of fact would need to examine each
store and each manager individually to determine if the managers there were misclassified
as exempt—an inquiry inconsistent with class litigation.
Employers were disappointed when the California Supreme Court issued Sav-On Drug
Stores, Inc. v. Superior Court, 363 which indicated that exempt misclassification cases may
often be appropriate for certification. In Sav-On, the trial court certified a class of store
managers notwithstanding evidence that exempt status of individual managers varied
from store manager to store manager based on differences in how they divided their time
between exempt and non-exempt tasks. The court of appeal held that individualized issues
necessarily predominated over common issues because the fact finder would need to
examine each store manager’s work habits to see whether that manager spent the majority
of his or her time on exempt tasks.
In reversing, the California Supreme Court emphasized that the appellate court had given
insufficient deference to the trial court’s determination that common issues predominated.
The court clarified that if a reasonable person might conclude from the record that common
issues predominated over individualized ones, then a trial court’s certification order should
361
362
363
See, e.g., Wage Order 7-2001 § 2(K).
32 Cal. App. 4th 555, 569 (1995).
34 Cal. 4th 319 (2004).
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