Labor/Employment
Jul. 19, 2002
High Court Takes Overtime Suit
SAN FRANCISCO - The California Supreme Court agreed Wednesday to decide whether class actions are the appropriate vehicle for handling claims against employers for allegedly misclassifying employees as exempt from overtime pay.
All six justices present at Wednesday's conference voted to review Save-On Drug Stores v. Superior Court (Roche), 2002 DJDAR 4347, a case in which a Los Angeles appeal court broke ranks with other appellate courts and blocked a class action against the drug store chain by managers and assistant managers.
In recent years, suits have proliferated against employers for allegedly assigning some managerial duties to low- and mid-level employees, thus making them exempt from overtime pay. In July 2001, Farmers Insurance Exchange was hit with a $90 million verdict for misclassifying 2,400 claim adjusters.
Pacific Bell has paid $28 million to settle similar claims by 600 sales managers, while Rite-Aid has paid $25 million and Bank of America has paid $22 million.
All of these cases were handled as class actions because the amount of money claimed by individual workers was too small to make litigation worthwhile.
Attorneys for employers and employees therefore sat up and took notice in April when the Los Angeles appeal court, led by Justice Charles Vogel, ordered decertification of a class action against Sav-On. In that case, filed on behalf of between 600 and 1,400 employees, the plaintiffs alleged they spent more than half their workday on non-managerial work but routinely worked more than 40 hours a week and were not paid overtime.
Vogel said the circumstances were too different from employee to employee. The case, he said, "involves individual fact questions that predominate over undisputed common issues, rendering class action treatment inappropriate."
Attorneys for the workers petitioned the state high court for review, and letters came in from both employers and employee groups lobbying the court.
San Francisco appellate specialist Dennis Riordan, hired by the plaintiffs to assist with the appeal, said he was "delighted but not surprised" that the justices took up the case.
"There was a well-recognized conflict that this opinion created" with other courts, he said.
Justice Janice R. Brown was away from the court.
In other action Wednesday, the justices declined to get involved in the debate over whether California's three-strikes sentencing law violates the ban on cruel and unusual punishment.
In recent months, the 9th U.S. Circuit Court of Appeals has set aside two sentences of 25-years-to-life imprisonment on the ground that it is cruel and unusual to impose that long a sentence for petty, nonviolent offenses.
Two California appeal courts have issued opinions bluntly disagreeing with the 9th Circuit. In the meantime, the U.S. Supreme Court has agreed to review the 9th Circuit rulings.
The state high court voted to stay out of the matter by denying review in People v. Mantanez, 98 Cal.App.4th 354 (2002). Only Justice Joyce L. Kennard voted to review the case, while Justice Marvin Baxter recused himself.
The justices also unanimously agreed to decide the validity of a new state law that allows unions for county safety employees to demand binding arbitration of economic issues.
A Riverside appeal court struck down the law in April because it gives a private body the power to interfere with the appropriation of county money. County of Riverside v. Superior Court, 97 Cal.App.4th 1103.
Philip Carrizosa
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