Litigating California Wage & Hour and Labor Code Class Actions

in which the evidence is limited to groups of opt-ins providing representative testimony.
The Court held that such an approach not only is inconsistent with Rule 23(b)(2), but also
prevents the employer from litigating its statutory defenses to individual claims, thereby
violating its due process rights. In Cruz v. Dollar Tree Stores, Inc. (N.D. Cal. July 8, 2011),
the court decertified a class in part for this reason. The judge stated, “In light of the
Supreme Court’s rejection of [the “trial by formula”] approach, it is not clear to the Court
how, even if class-wide liability were established, a week-by-week analysis of every class
member’s damages could be feasibly conducted.” Similarly, in Aburto v. Verizon, another
federal district court denied class certification of misclassification claims based on Dukes,
holding that whether Verizon unlawfully classified its managers as exempt is an
individualized inquiry involving facts unique to each potential plaintiff. 384 Thus, it will be
more important than ever for defense counsel to argue that class or collective treatment is
inappropriate because the necessary individualized inquiry into each class or collective
member’s claims could result in a series of mini-trials that undermine the efficiency benefits
that class and collective treatment is meant to offer.
This point also obtains in FLSA cases. In particular, when courts examine whether a
conditionally certified case should be decertified, typically after extensive discovery, they
often require that plaintiffs set forth a trial plan explaining how the claims of the opt-in
plaintiffs can be tried by collective proof. Following Dukes, the use of representative
testimony to establish such proof simply may not suffice.
In addition to rejecting the “trial by formula” approach, Dukes held that employers are
entitled to present individual defenses to each employee’s specific claim for back pay, or
other damages, even if a violation of the statute is found. Following this holding, employers
should now have a strong due process argument in wage-and-hour cases that even if a
statutory violation is found, they are entitled to present individual defenses to each class or
collective action member’s entitlement to the back wages sought in the litigation. The
argument is even stronger in FLSA collective actions because an individual must
affirmatively consent to be a member of the case, at which point he becomes a party
plaintiff for purposes of adjudicating his individual claims.
While the full impact of Dukes will not be known for years, the decision has undoubtedly
created an environment that will prove more friendly to employers defending against wageand-hour
claims. As always, the strongest defense to potential wage-and-hour claims is
vigilant attention to compliance efforts before litigation arises, including the adoption,
distribution, and effective enforcement of internal policies mandating compliance with
federal and state labor laws. Such policies remain the most important weapon in the
384
Aburto v. Verizon, 2012 WL 10381, at *5 (C.D. Cal. Jan. 3, 2012) (“The court simply cannot conclude that all FLMs
performed the same job duties, that the job duties were all clerical, or that Verizon’s restrictions on FLMs precluded ‘any
exercise of independent judgment or discretion.’”)
Seyfarth Shaw LLP | www.seyfarth.com Litigating California Wage & Hour Class Actions (12th Edition) 86