A California court of appeal upheld a trial court’s refusal to certify a class of California employees of The Wet Seal on a claim the clothing retailer allegedly required employees to purchase its clothing without reimbursement in violation of state law.  (Morgan v. Wet Seal, Inc. (Cal. Ct. App. Oct. 12, 2012) A133590.)  Key to the court’s holding was the absence of any written, state-wide policy requiring employees to make such purchases.  Instead, the trial court found, and the court of appeal agreed, that determining state-wide liability would require several individualized inquiries, including (1) what each store manager told each store’s employee about any such purchases, and (2) whether the employee purchased any Wet Seal clothing in reliance on any instruction to do so.

Plaintiffs sought to represent approximately 12,000 employees throughout California.  Plaintiffs submitted declarations from 51 former employees, some of which stated that when they were hired, a manger told them that they were expected or required to wear Wet Seal attire at work.  However, most provided statements that were ambiguous on this point.  In response, the retailer submitted declaration from 114 putative class members, all of whom stated clearly that they have never been required to wear Wet Seal clothing.  The court held the disparity among plaintiffs’ declarations, as well as the discrepancy between plaintiff’s declarations and defendant’s declarations, underscored the need for individualized factual determinations that made class treatment inappropriate.   

Plaintiffs also introduced an e-mail from a district director in support of their motion for class certification, which purported to establish a company-wide policy requiring employees to wear Wet Seal clothing.  The court held the e-mail did not support plaintiffs’ motion, for three reasons.  First, the e-mail was ambiguous on the key point, requiring individualized inquiries into how recipients understood it.  Second, there was no evidence the district director was authorized to establish companywide policy.  Third, the e-mail was not widely disseminated.  The court concluded that, if anything, the e-mail supported the conclusion that individualized determinations would be required to resolve the claim on behalf of all California employees.

Morgan is representative of a heartening trend among California courts to reject class certification of claims against employers where determining liability will require numerous individual factual determinations.  Whether the issue is alleged failure to reimburse employees for necessary expenses as in Morgan, alleged failure to provide meal or rest breaks, or alleged failure to classify employees correctly as exempt from overtime, California courts have proven increasingly receptive to evidence demonstrating that resolving the issue on behalf of hundreds or thousands of employees throughout the state would require store-by-store or employee-by-employee inquiries that would make class treatment impossible to manage.