On May 29, 2014, the California Supreme Court issued its long-awaited opinion in Duran v. U.S. Bank National Association, remanding the case to the trial court due to the trial court’s flawed trial methodology.
In Duran, the plaintiff asserted misclassification claims on behalf of a putative class of Business Banking Officers of U.S. Bank, a position that involved sales of bank products such as loans and lines of credit to small business customers. These BBOs had been classified as exempt based on the outside salesperson exemption, which requires that the employee in question spend more than 50 percent of the workday engaged in outside sales.
Despite the evidence submitted by US Bank, the trial court certified the class based on evidence that (1) the BBO position was “standardized,” (2) all BBOs had been classified as exempt by the employer without a close examination of each employee’s duties or work habits, and (3) US Bank did not train or monitor BBOs to ensure that exemption requirements were satisfied.
The case then proceeded to the parties’ presentation of trial management plans, where US Bank proposed dividing the class into 20 to 30 groups and having special masters conduct individualized evidentiary hearings on liability and damages. Plaintiffs instead proposed the use of surveys and random sampling to establish liability, followed by determination of aggregate classwide damages in a second phase of the trial. Faced with two competing trial plans, the trial court developed its own plan: a court-selected random sample of 20 class members -- the Representative Witness Group (“RWG”) -- who would testify at trial and from whom liability and damages findings would be extrapolated to the rest of the class.
After a 40-day bench trial in which the court refused to consider any evidence, including any of the 75 declarations or the deposition excerpts, from (properly classified) members of the class who were not part of the RWG, the trial court found that US Bank had not carried its burden of proof that the BBOs were properly classified and thus that the entire class of BBOs was misclassified as exempt and that all class members were entitled to overtime compensation. The court calculated the total overtime restitution due the class at $8,953,832, which with prejudgment interest as of May 15, 2009, came to $14,959,565.
On appeal to California’s First Appellate District Court, the appellate court unanimously reversed the decision and ordered the class decertified, holding that (1) the trial plan denied USB’s due process right to litigate affirmative defenses, (2) the high margin of error further implicated due process concerns, and (3) it was an abuse of discretion not to decertify the class when it became so apparent that individual issues predominated.
While the California Supreme Court’s decision does not reverse the certification order outright, as did the Court of Appeals decision, and instead remands the case to the trial court, the Order nevertheless provides much needed guidance on the standards of class certification and the need for a proper class action trial management plan.
First, the Court held that trial of a class action must permit litigation of relevant affirmative defenses. If those affirmative defenses turn on individual questions, that may well mean that a class action is not an appropriate vehicle to try the case.
Second, the Court explicitly required that courts, at the class certification stage, consider a plan for how individualized issues will be managed at trial. “Trial courts must pay careful attention to manageability when deciding whether to certify a class action. In considering whether a class action is a superior device for resolving a controversy, the manageability of individual issues is just as important as the existence of common questions uniting the proposed class.” “Trial courts also have the obligation to decertify a class action if individual issues prove unmanageable.”
The Court then reviewed the statistical methods used by the trial court. Although the Court did not hold that statistical proof could never be used to certify and then try a misclassification case, the requirement that such a plan “must be conducted with sufficient rigor” will likely give all but the most obstinate jurists considerable pause. Trial courts “would be well advised” to insist upon such a plan before granting certification “[r]ather than accepting assurances that a statistical plan will eventually be developed,” a phrase that likely sounds quite familiar to those who defend against wage-and-hour class claims, and “[i]n any event, decertification must be ordered whenever a trial plan proves unworkable.”
Here, the trial plan gave new meaning to the term “unworkable.” Without any preliminary assessment of the variability in the class, “the court forced the case through trial with a flawed statistical plan that did not manage but instead ignored individual issues.” After holding that due process requires that a defendant be allowed to impeach a statistical model or otherwise show reduction of liability based on affirmative defenses, the Court turned to the more general question of the use of statistical evidence to prove classwide liability and damages. In a section entitled “Sampling Techniques Must Satisfy Realistic Guidelines to Minimize the Risk of Error,” the Court addressed the “numerous problems” that arose when proper methodology “based on inferential statistics and probability theory” were not employed. First, the sample size was too small, in large part because the court chose a sample size of 20 without input from statistical experts who could have explained the necessity to first determine variability within the class so that the sample size will be statistically appropriate and capable of producing results within a reasonable margin of error. This error was exacerbated by a non-random sample: although the draw of 20 was random, selection bias infected the RWG when the court included the named plaintiffs and replaced other class members who had opted out of the class with alternates. The trial court also excluded two other members of the RWG: one who was an “outlier” that the court did not consider a “true” BBO, and the other who did not respond to the trial subpoena. Thus the court heard testimony from 19 class members who did not opt out, were not “outliers but were rather “true” BBOs, and who appeared to testify at trial, as well as the two named plaintiffs. It refused to consider potentially contrary testimony of 10 plaintiffs that would otherwise have been included: the four previously named plaintiffs (who testified that they spent 60 to 90 percent of their workday on outside sales), the four original RWG members who opted out (two of whom admitted that they opted out at the urging of class counsel so they could be replaced by members with stronger testimony), the “outlier,” and the RWG member who failed to appear for trial. This resulted in a plaintiff-biased “Representative” Witness Group, and led to a margin of error of 43.3 percent. As the Court noted, even the plaintiffs had to concede that this was “intolerably high.”
While plaintiffs and defendants will have to wait and see what impact the Duran decision has on the class certification standards and class action trial methodology, the Duran decision should be viewed as a monumental win for defendants, particularly as to the Court’s affirmation of defendants’ rights to present individualized defenses and directives to the trial courts to assess how those and other individualized issues will be managed at trial at the class certification stage.
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- No-Poach Agreements
- No-Rehire
- Noah’s Ark
- Noel Canning
- non-binary
- Non-Compete
- Non-Compete Agreements
- Non-Competes
- Non-disclosure
- Non-Disclosure Agreements
- Non-discrimination
- Non-disparagement
- Non-Unit Employees
- Nonbinary Gender
- noncompete agreements
- Nondisclosure
- Notice 2010-84
- Notice 2012-9
- Notice 2013-74
- Notice 2014-19
- notice requirements
- NRLB
- NUHW
- Numerosity
- Numerosity Requirement
- Nursing Mothers
- NYC
- NYCHRL
- Oakwood Healthcare
- Obamacare
- Obergefell v. Hodges
- Obesity
- Occupational Safety and Health Administration
- ODEP
- OFCCP
- OFCCP Compliance; Affirmative Action; Agency Developments; Veteran Hiring
- OFCCP Developments
- OFCCP v. Florida Hospital of Orlando
- Off Duty Conduct
- Off-label Marketing
- Off-the-Clock Work
- Offer Of Judgment
- Offshoring
- OLMS
- omicron
- Ondray Harris
- Ondray T. Harris
- Online Accessibility
- Opinion Letters
- Opiod
- Opportunity to Compete Act
- Ordinary Disease of Life
- Oregon
- Organ Donor
- Organizing
- Organizing and the NLRB
- OSHA
- OSHA Developments
- Outbreak
- Outsourcing
- Overtime
- overtime exemption
- Overtime Exemptions
- Overtime Pay
- Overtime Regulations
- Overtime Rule
- Overtime Wages
- OWBPA
- Oxford Health Plans
- PAGA
- Paid Family Leave
- Paid Family Medical Leave
- Paid Interns
- Paid Leave
- Paid Sick Leave
- paid time off
- Paid Vaccine Leave
- Pandemic
- Pandemic Unemployment Assistance
- Parental Leave
- Patent
- Patient Protection and Affordable Care Act
- Patricia Shiu
- Pattern and Practice
- Paulsen v. Renaissance Equity Holdings
- Pay
- Pay and Promotions
- Pay Data
- pay disclosure
- Pay Discrimination
- Pay Equity
- Pay Reporting
- pay scale
- Pay Secrecy
- Pay Transparency
- Pay/Compensation
- Paycheck Deductions
- Paycheck Fairness Act
- Paycheck Protection Program
- Payroll Audit Independent Determination Program
- Payroll Debit Cards
- Payroll Taxes
- PBGC
- PCA
- PCC Structurals
- PCORI
- PDLL
- Penalties
- Penalty
- Pennsylvania
- Pennsylvania Minimum Wage Act
- Pension Plans
- Peoplemark
- PeopleSmart
- Perfectly Clear Doctrine
- Perfectly Clear Successor
- Performance and Accountability Report
- Period of Restoration
- Personal Jurisdiction
- Personal Jurisdiction; FLSA; Class Actions; Collective Action; General Jurisdiction; Specific Jurisdiction; Rule 23
- Personnel Policies
- Personnel Records
- Persuader Activity
- Persuader Agreements
- Persuader Rule
- Peter B. Robb
- Peter Schaumber
- Peter Sung Ohr
- Petition
- PEUC
- Phaladelphia Fair Practices Ordinance
- Philadelphia
- Pier 1 Imports
- Pitts v. Terrible Herbst
- Pizza Hut
- PLA
- plan sponsors
- Policies
- Portal-to-Portal Act
- Position Statement
- Post-Accident
- Poster Rule
- POWADA
- Poway Academy
- PPACA
- PPACA Checklist
- PPACA Timeline
- Practical Training
- Pre-Adverse Action Notice
- Pre-Adverse Action Requirements
- Precedent
- Predictable Scheduling
- Preemption
- Pregnancy Disability Leave
- Pregnancy Discrimination
- Pregnancy Discrimination Act
- Pregnancy Leave
- Pregnant Workers Fairness Act
- Preliminary Injunction
- Premium Pay
- Prenatal Leave
- Prescription Drug
- Prescription Drugs
- Prescription Medication
- Prevailing Wage
- Primary Beneficiary Test
- Prior Salary
- Privacy
- Private Equity Fund
- Privilege
- PRO Act
- Procedure
- Profanity
- Professional Responsibility
- Profiles in Diversity
- Progressive Discipline
- prohibition
- project labor agreement
- Property Rights
- Proposed Rule
- Proposed Rulemaking
- Proposed Rules
- Proposition 22
- Protected Activities
- Protected Activity
- Protected Concerted Activity
- Protecting Older Workers Against Discrimination Act
- Protective Order
- Protest
- provision
- PTO
- Public Accommodation
- Public Accommodations
- Public Bargaining
- Public Charge
- Public Entity
- Public Policy
- PUMP Act
- Punitive Damages
- Purchase Agreements
- Purple Communications
- PWFA
- Qualified Plans
- Quarantine
- Questioning
- Quickie Election
- Quickie Elections
- Race Discrimination
- Racial Equity
- Range
- Raytheon
- Reasonable Accommodation
- Reasonable Accommodations
- Recess Appointments
- Recordkeeping
- recruiting
- Reduction-in-Force
- Register Guard
- Regular Rate
- Regular Rate of Pay
- Regulation
- Regulations
- Regulatory Compliance
- Rehabilitation Act
- Reilly Moore
- Reimbursement
- Reimbursements
- release
- Religion
- Religious Accommodation
- Religious accommodation; Title VII; SCOTUS; Supreme Court; Third Circuit
- Religious Accommodations
- Religious Beliefs
- Religious Discrimination
- Religious Freedom Restoration Act
- Religious Institutions
- remedies
- Remote Work
- remote workforce
- Reopen Workplace
- Reopening Business
- Reopening Workplace
- Repeal
- report
- Reporting
- Reporting of Group Health Plans
- Reporting Pay
- Representation Election
- Representation Elections
- Representation Fairness Restoration Act
- Reprisal
- Reproductive Loss Event
- Reproductive Loss Leave
- Reproductive Rights
- Rescind
- RESPECT Act
- rest breaks
- Restaurant
- Restaurant Industry
- Restaurants
- Restoring Balance and Fairness to the National Labor Relations Board
- restriction
- Restrictive Covenants
- Restrictive Covenants Act
- Retail
- Retail Litigation Center
- Retaliation
- Retirement Plans
- Retirement Savings
- Return to Work
- Revenue Procedure 2013-12
- Revenue Ruling 2014-9
- Ricci v. DeStefano
- Richard Griffin
- RICO
- RIF
- RIFs
- right of first refusal
- Right to Disconnect
- Right to Know
- Right to Work
- Right-To-Sue
- Rising Star
- Rite Aid and Lamons Gasket
- Robert Quackenboss
- Roland Juarez
- Roland Juarez; Los Angeles Business Journal
- Roland M. Juarez
- Rollovers
- Roth
- Rounding Policy
- Rounding Time
- Rule 23
- Rule 68 Offer
- Rule-Making
- rulemaking
- Ryan A. Glasgow
- Ryan Bates
- Ryan Glasgow
- Sabbath
- Safety
- Safety Incentives
- Salary
- Salary Basis Test
- Salary History
- Salary History Bans
- Salary History Inquiries
- Salary Inquiry
- Salary Reduction
- Sales Commissions
- Same-Sex
- Same-sex couples
- San Francisco
- San Francisco Fair Chance Ordinance
- Sanjee Weliwitigoda
- Sara Harlow
- Sarbanes-Oxley
- SB 459
- SB 553
- SB 95
- SB-973
- SBA
- SBC
- SCA
- Scabby
- Scale
- Scheduling Letter
- Schneiderman
- School Closings
- Scope Of Coverage
- Scott Brown
- Scott H. Kimpel
- Scott Nelson
- SCOTUS
- Sealed Records
- SEC
- Second Circuit
- Secondary Boycotts
- Section 125
- Section 1557
- Section 1983
- Section 203
- Section 2802
- Section 302
- Section 7
- Section 7 Rights
- Secure Scheduling
- Security
- Security Screenings
- Seff v. Broward County
- SEIU
- Self-Insured Health Plans
- Senate Bill 1162
- Separation Agreements
- Settlement
- Settlement Agreement
- Settlement Agreements
- Settlement Disclosure
- Seventh Circuit
- severance
- Severance Agreements
- Severance Payments
- Severe Injury Report
- Sex Discrimination
- Sexual Harassment
- Sexual Orientation
- SFFA
- Shaena Rowland
- Shannon S. Broome
- Sharon Block
- Sharon Goodwyn
- Shelter in Place
- Short-Time Compensation Program
- Shutdowns
- Sick Leave
- Sick Pay
- Silica Standards
- Single employer
- SIR Dashboard
- Sixth Circuit
- Slow the Spread
- Social Distancing
- Social Media
- Social Media Evidence
- Social Media Policy
- Solicitation Policy
- Solicitation/Distribution Policy
- Southern California Pizza Co.
- Speak Out Act
- Specialty Healthcare
- Specific Jurisdiction
- Spirituality Programs
- Spokeo
- Spoliation
- Spousal Rights
- Standard of Review
- Standing
- Staples
- Starbucks
- state court
- state legislation
- Statistical Audits
- Statute of Limitations
- Statute of Repose
- Statutes of Limitations
- Staub v. Proctor Hospital
- Stay Violations
- Steering Claims
- Stengart v. Loving Care Agency
- Stephen Pattison
- Stewart Acuff
- Stillborn
- Strategic Objectives
- Strategic Plan
- Stray Markings
- Stray Remarks
- Strike
- Strike Plans
- Strike Tactics
- Students for Fair Admissions
- SUB Payments
- Subcommittee on Health
- Subject-Matter Jurisdiction
- Subpoena
- Subpoena Duces Tecum
- Substantial Compliance
- Successor Bargaining Duty
- Successor Company
- Successor Employer
- Successor Employer Duty to Bargain
- Successor Liability
- Suitable Seating
- Summary of Benefits and Coverage
- Super Lawyers
- Supervisor
- Supplemental Paid Sick Leave
- Supply Chain
- Supreme Court
- Susan Wiltsie
- Suspension
- Suzan Kern
- Systemic Discrimination
- Systemic Enforcement
- Taxpayer Responsibility Accountability and Consistency Act
- TCPA
- Technatomy Corporation
- Telecommuting
- Telephone Consumer Protection Act
- Telework
- Temporary Employees
- Temporary Reinsurance Program
- Temporary Workers
- Tenth Circuit
- Terence Connor
- Terrence Flynn
- Tesla
- Test Factor
- Testing
- Texas
- Texas Constitution
- Texas Lawyer
- Texas Legal Awards
- Texas Mutual v. Ruttiger
- Texas Regulatory Consistency Act
- Texting
- The Board
- The Boeing Company
- The Opportunity to Work Ordinance
- Third Circuit
- Third-party Liability
- Thompson v. North American Stainless
- Thriving in Their 40s
- Time Rounding
- Timekeeping
- Tip
- Tip Credit
- Tip Pooling
- Tip Sharing
- Tipped Employees
- Tipped Workers
- Tipping Policies
- Tips
- Title III
- Title IX
- Title VII
- Title VII of the Civil Rights Act of 1964
- Tolling
- Top Insurance Cases
- TRAC
- Trade Secrets
- Trade Secrets & Non-Competes
- Trademark
- Traditional labor
- Trailblazer
- Training
- Training Programs
- Transgender
- Transgender Rights
- Transparency
- TransUnion
- Tratree
- Traxler v. Multnomah County
- Trial Management
- TRICARE
- Trucking Industry
- Trump Administration
- Trump Rule
- Tyler S. Laughinghouse
- Typicality Requirement
- U.S. Senate
- U.S. Senate Finance Committee
- UAW
- Uber
- Uber Drivers
- ULP
- ULP Charge
- UNC
- Unconscionability Doctrine
- Undocumented Workers
- undue hardship
- Unemployment
- Unemployment Benefits
- Unemployment Compensation
- Unemployment Discrimination
- Unemployment Insurance
- Unfair Labor Charge
- Unfair Labor Practice
- Unfair Labor Practices
- Uniform Glossary
- Unilateral Change
- Union
- Union Apparel
- Union Button
- Union Dues
- Union Election
- Union Elections
- Union Information Request
- Union Insignia
- Union Logo
- Union Organizing
- Union Organizing and the NLRB
- Union Rat
- Union Representation
- Union Representation Elections
- Union Sticker
- Unions
- United States v. Windsor
- University of North Carolina
- Unlawful Insistence
- Unlimited Vacation
- Unsuccessful Assisted Reproduction
- UPMC Braddock
- US Chamber of Commerce
- US Supreme Court
- USAction
- USCIS
- USDA
- Use or Lose Rule
- USERRA
- Vacation
- Vacation Pay
- Vacation Scheduling
- Vaccination
- Vaccine
- Vaccine Incentives
- Vaccines
- Valley Hospital Medical Center
- Variant
- VBA
- VCP
- Venue
- Veterans Preference Act
- VETS-100A
- VETS-4212
- VEVRAA
- Victoria Lipnic
- Video
- Viking River
- Virginia
- Virginia Business Magazine
- Virginia Center for Inclusive Communities
- Virginia Employment Legislation
- Virginia Human Rights Act
- Virginia Labor Law
- Virginia Law
- Virginia Lawyers Weekly
- Virginia Marijuana Laws
- Virginia Overtime Wage Act
- Virginia Wage Payment Act
- Virginial Lawyers Weekly
- Virus
- Visa Waiver
- Vital Industry
- Volks Rule
- Voluntary Incentive
- Voter List
- VW
- Wage & Hour
- Wage and Hour
- Wage and Hour Exclusion
- Wage Equality Act
- Wage Fixing
- Wage Inquiries
- Wage Investigation
- Wage Payment
- Wage Penalties
- Wage Reduction
- Wage Statement
- Wage Theft
- Wage Theft Prevention Act
- Wage Transparency
- Waiter
- Waiting Period Rules
- Waiver
- Waivers
- walk around
- Walling v. Portland Terminal
- Wang v. Chinese Daily News
- WARN
- WARN Act
- Washington DC
- We Can Help
- Weapons
- Web Accessibility
- Web Designer
- Webinar
- Website
- Website Accessibility
- Weight Restrictions
- Weingarten
- Wellness Programs
- Wesson
- West Virginia Workplace Freedom Act
- WHD
- Whistleblower
- Whistleblowers
- White Collar Exemption
- William Emanuel
- William J. Emanuel
- Wilma Liebman
- Windsor Decision
- Withdrawal of Recognition
- withholding requirements
- Witness Statements
- Women
- Women In Leadership
- Women of Influence
- Women’s Equality Act
- Work Schedule
- Work Transfers
- Work-Sharing
- Worker Misclassification
- Worker Protection
- Worker Safety
- Workers Bill of Rights
- Workers Compensation
- Workers' Compensation Insurance
- Workplace AI
- Workplace Diversity
- Workplace Investigations
- Workplace Monitoring
- Workplace Policies
- Workplace Privacy
- Workplace Rules
- Workplace Safety
- Workplace Technology
- Workplace Violence
- Workplace Violence Prevention
- WR Reserve
- Wrongful Discharge
- Year In Review
Authors
- Jessica N. Agostinho
- Walter J. Andrews
- Ian P. Band
- Ryan M. Bates
- Christy E. Bergstresser
- Theanna Bezney
- Jesse D. Borja
- Brian J. Bosworth
- Jason P. Brown
- M. Brett Burns
- Daniel J. Butler
- Christopher J. Cunio
- Jacqueline Del Villar
- Kimberlee W. DeWitt
- Steven J. DiBeneditto Jr.
- Robert T. Dumbacher
- Raychelle L. Eddings
- Elizabeth England
- Juan C. Enjamio
- Karen Jennings Evans
- Geoffrey B. Fehling
- Jason Feingertz
- Katherine Gallagher
- Ryan A. Glasgow
- Sharon S. Goodwyn
- Meredith Gregston
- Eileen Henderson
- Kirk A. Hornbeck
- J. Marshall Horton
- Roland M. Juarez
- Keenan Judge
- Suzan Kern
- Elizabeth King
- Stephen P. Kopstein
- Torsten M. Kracht
- James J. La Rocca
- Kurt G. Larkin
- Jordan Latham
- Tyler S. Laughinghouse
- Crawford C. LeBouef
- Michael S. Levine
- Michelle S. Lewis
- Brandon Marvisi
- Lorelie S. Masters
- Reilly C. Moore
- Michael J. Mueller
- J. Drei Munar
- Alyce Ogunsola
- Christopher M. Pardo
- Michael A. Pearlson
- Adriana A. Perez
- Kurt A. Powell
- Robert T. Quackenboss
- D. Andrew Quigley
- Michael Reed
- Jennifer A. Reith
- Amber M. Rogers
- Alexis Zavala Romero
- Zachary Roop
- Adam J. Rosser
- Katherine P. Sandberg
- Elizabeth L. Sherwood
- Cary D. Steklof
- C. Randolph Sullivan
- Veronica A. Torrejón
- Debra Urteaga
- Emily Burkhardt Vicente
- Kevin J. White
- Holly H. Williamson
- Susan F. Wiltsie