In a putative class action for alleged unpaid overtime, meal-and-rest-period violations, and other claims under the California Labor Code, a California federal district court has barred an employer from communicating with potential class members regarding the lawsuit without first obtaining the court’s written permission. Quezada v. Schneider Logistics Transloading & Distrib., Inc., No. CV 12-2188 CAS (DTBx) (C.D. Calif. Mar. 25, 2013). Finding that the employer’s communications with the class members were deceptive and coercive, the court also struck declarations obtained from the class members, stating it would not consider them for “any purpose.”

Background

Warehouse worker Franklin Quezada, on behalf of himself and similarly situated employees (collectively, “Quezada”), sued Schneider Logistics for alleged unpaid overtime, meal-and-rest-period violations, and other claims under the California Labor Code. Shortly after Quezada filed the complaint, Schneider’s attorneys interviewed the employees about the complaint’s allegations. The meetings were held in a manager’s office at the company’s warehouse during work hours. Employees were called to the office over a loudspeaker or ordered to attend by their supervisors. A Spanish-English translator was available for those who did not feel comfortable participating in the interview in English. 

Before beginning each interview, Schneider’s attorneys informed the employees that the meeting was “just an interview,” and stated that the meetings were being conducted in connection with the Schneider’s lawyers’ “internal investigation about the conditions at the warehouse.” They also explained that:

The employee’s participation in the interview was voluntary and the employee could end his or her participation at any time.

  • The employee’s participation in the drafting and signing of a declaration was voluntary.
  • If an employee decided to sign a declaration, she or he should make sure it was truthful and accurate.
  • Schneider would not retaliate or benefit the employee as a result of his or her decision to participate or not to participate in the meeting.
  • The employee was a potential member of a class action against Schneider with claims regarding the subjects discussed in the meeting, including unpaid wages.
  • The lawyers present represented Schneider and not the employees. 
  • The employee could consult with an attorney of her or his choosing with any questions about the process. 

The interviews lasted 30-40 minutes. At the end of the interview, each employee was asked to sign a declaration; Schneider’s attorneys, however, did not explain that the declaration could be used to limit their potential recovery in the class action. Some employees felt pressured into signing declarations, and only six employees declined to sign.

Alleging the declarations were obtained in a coercive and unethical manner, Quezada asked the trial court to strike the declarations and to bar Schneider from engaging in further communications with potential class members about the lawsuit without first obtaining the court’s permission.

Applicable Law

Under California law, defendants in a class action generally are not barred from pre-certification communications with prospective members of the plaintiff class, as long as the communications are not misleading or coercive. Maddock v. KB Homes, Inc., 248 F.R.D. 229 (C.D. Cal. 2007). Courts examine several factors in considering whether pre-certification communications between employers and employees are deceptive or coercive, including whether the employer adequately informed the employees about: (1) the details underlying the lawsuit, (2) the nature and purpose of the communications, and (3) the fact that any defense attorneys conducting the communications represent the employer and not the employee. See, e.g., Longcrier v. HL-A Co., Inc., 595 F. Supp. 2d 1218 (S.D. Ala. 2008).

Communications Deceptive and Coercive

Schneider argued the interviews were not coercive or deceptive because the employees were told that the attorneys represented Schneider and that they were free to participate or not, would not be subject to retaliation, and could refuse to sign a declaration. The court disagreed. It found the communications were deceptive because the employees were never told the purpose of the interviews was to gather evidence that could be used against them in a lawsuit and limit their potential recovery. The court also found that failing to disclose the evidence-gathering purpose of the interviews were contrary to California’s ethics rules (California Rule of Professional Conduct 3-600) prohibiting attorneys representing an organization from misleading employees regarding whether their communications will be used against them.

In addition, the court determined the interviews were conducted in a coercive manner because the employees did not attend the interviews on their own initiative. Moreover, although the employees were told they were free to leave the interviews at any time, only five out of the 120 employees interviewed actually chose to leave. This, the court said, suggested “the interviewing attorney’s grant of permission to leave did little to dispel the aura of coercion.” The court further found that the employees felt pressured to sign the declaration at the conclusion of the interview. Accordingly, the court concluded the communications between Schneider’s attorneys and the employees were misleading and coercive and ordered Schneider to cease communicating with the employees regarding the lawsuit, without prior written consent of the court. The court also struck the declarations and stated that it would disregard them if the employer attempt to use them for “any reason.”

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Quezada provides a cautionary lesson: attorneys’ failure to explain the underlying purpose of their interviews and the impact that declarations could have on the employees’ claims can result in making the declarations unusable as direct evidence or for impeachment purposes.