A Victory For Low-Wage Workers: Class Actions Remain The Best Way To Protect The Rights Of Large Numbers Of Employees

Class actions are important tools for protecting the rights of workers-particularly those workers on the lower rungs of the economic ladder.  When large numbers of these workers are denied their rights in the workplace-such as overtime pay or meal and rest breaks, they can join together in a class action to demand justice.

Large and powerful companies that have been subject to this type of litigation hate class actions.  And it is no secret that these business interests have seduced the conservative faction of the United States Supreme Court into doing their bidding.  In decision after decision, those same five justices have contorted the law, the facts, and their rational facilities, in an attempt to gut the class action device.  Arbitration (Concepcion), removal to federal court under the Class Action Fairness Act (Standard Fire), and class certification itself (Dukes) have all been manipulated in an overt effort to prevent poor and working class people from having their day in court.

Thankfully, there are many brave and conscientious judges who have resisted this trend.  For example, on May 28, 2013, the Court of Appeals for the Ninth Circuit issued its opinion in Leyva v. Medline Industries, Inc.  Leyva addressed the critical issue of whether individual damages calculations can defeat commonality for the purpose of class certification.  For many years, in both the state and federal courts, the answer to that question had been no.  See, e.g., Blackie v. Barrack, 524 F.2d 891, 905 (9^th Cir. 1975); Brinker v. Superior Court, 273 P.3d 513, 546 (2012).

However, in Comcast Corp. v. Behrend, 133 S.Ct.1426, 1435 (2013), the United States Supreme Court arguably reopened this question.  Comcast is an antitrust case; it is not a wage and hour case.  However, defendants have taken to arguing that Comcast stands for the proposition that a court cannot grant class certification where there are individualized damage calculations.

The Leyva decision soundly rejected this argument, and reached two holdings that are extremely important for workers seeking to recover wages in class actions.  First, Leyva reiterated the critical holding that individualized damages determinations do not defeat class certification.  As the California Supreme Court noted in Brinker, to hold otherwise would effectively sound the death-knell of the class action device.

Distinguishing the plaintiffs’ labor law claims (and presumably all wage and hour class actions) from antitrust actions such as Comcast, the Leyva court noted that damages could be calculated based on the wages each employee had lost due to the defendant’s unlawful practices.  These calculations could be made using the defendant’s computerized payroll and timekeeping database.  (In fact, as the court noted, the defendant had used its database to calculate the class-wide damages in support of its motion to remove to federal court.)

Levya’s second holding is that the district court had erred in concluding that the size of the class (over 500 workers) meant that class certification was not the superior method of adjudicating the claims at issue.  The district court had concluded that because of the size of the class, unspecified “alternative methods” were the best way to resolve the plaintiffs’ claims.  The Ninth Circuit rejected this holding.  The Court noted that because the class members’ claims were relatively small (under $10,000 each), class certification was likely the only feasible means for them to present their claims.  For this reason, class certification was the superior method of adjudication.

Finally, the Court reasoned that the defendant had admitted that it could calculate individual class members’ damages through its company payroll records.  Even though this process took about an hour and a half for a single class member, the Court found that this fact supported the plaintiff’s argument regarding superiority.

For now, Leyva is the law of the Ninth Circuit, which includes the federal courts in California.  This is good news for workers in California who seek to vindicate their rights in the workplace.

If you have questions about your rights in the workplace, or would like to speak with an experienced wage and hour attorney, please contact Hunter Pyle Law.