Seyfarth Synopsis: In Ellis v. Google, Inc., No. CGC-17-561299 (Cal Sup. Ct. Dec. 4, 2017), Judge Mary Wiss of the Superior Court of California granted a motion to dismiss a class action lawsuit brought by Google employees who claimed that all female Google employees are paid less than their counterparts. Specifically, Judge Wiss found that the plaintiffs failed to plead sufficient facts to conclude that Google paid all female employees less than their male counterparts, even though the complaint alleged that a statistical analysis “found systematic compensation disparities against women pretty much across the entire workforce.” Id. at 4. This case represents a win for employers, who too often are forced to defend large class actions based on conclusory allegations.

Case Background

Three former female Google employees filed a putative class action in the Superior Court of California, alleging that Google “maintained throughout California a ‘centrally determined and uniformly applied policy and/or practice of paying its female employees less than male employees for substantially similar work.’” Id. at 2. To support this allegation, the plaintiffs also alleged that the U.S. Department of Labor found that, with respect to Google’s Mountain View office in 2015, “‘systematic compensation disparities against women pretty much across the entire workforce.’” Id. The plaintiffs asserted four causes of action against Google based on the alleged disparity, including a California Equal Pay Act claim, a California Labor Code claim, a Business and Professions Code claim, and a claim for declaratory judgment. The plaintiffs purported to bring these claims on behalf of all female Google employees in California.

Decision

The Court observed that a class action complaint should be dismissed where, “assuming the truth of the factual allegations in the complaint, there is no reasonable possibility that the requirements for class certification will be satisfied.” Id. at 3. The Court then discussed the requirements for class certification under California law, including: “(a) an ascertainable and sufficiently numerous class; (b) a well-defined community of interest; and (c) substantial benefits from certification that render proceeding as a class superior to the alternatives.” Id. at 4. With respect to the second factor, the Court observed that it has three factors, including “(a) predominant common questions of law or fact; (b) class representatives with claims or defenses typical of the class; and (c) class representatives who can adequately represent the class.” Id.

The Court found that the plaintiffs did not allege sufficient facts to conclude that there was an ascertainable class. Even though the plaintiffs defined the class as “all women employed by Google in California,” which on its face was ascertainable, the Court found the definition overbroad because the plaintiffs offered “no means by which only those class members who have claims can be identified from those who should not be included in the class.” Id. Significantly, the Court found that the plaintiffs’ allegation that the U.S. Department of Labor “‘found systemic compensation disparities against women pretty much across the entire workforce’” at a Google office in 2015 was insufficient to support the conclusion that “Google implemented a uniform policy of paying all female employees less than male employees for substantially equal or similar work.” Id. The Court observed that the complaint did not “specify, for example, the specific job classifications it pertains to, or whether the comparison was made against men who perform substantially similar work under similar working conditions.” Id.

The Court also concluded that the plaintiffs failed to allege that there were common questions of law and fact that predominated over individual issues because the plaintiffs’ class was “overbroad,” so liability could not be decided for all putative class members in one proceeding. Id. at 5. The Court further opined that the plaintiffs’ conclusory allegation that they “performed ‘equal work’ as their male counterparts” was insufficient to allege that they, in fact, performed equal work, and dismissed their individual claims. Id. at 6.

Implications For Employers

The Ellis case has been closely watched as it is a significant workplace class action in a worker-friendly jurisdiction. The ruling of December 4 is a win for employers insofar as companies, especially in California, can use the decision to try to stop class actions at the pleadings stage. When moving to dismiss such complaints, employers should lay out what conclusions can be drawn from assuming specific factual allegations are true, as they may have far less significance than may appear at first glance. Employers should also continue reminding courts that class actions are only appropriate when they can create common answers to common questions, which is often not the case in large, overbroad class actions, and that conclusory allegations are insufficient to state claims.