As common issues predominated regarding whether the employer had a policy of denying compensation for certain pre-shift work in violation of California’s wage and hour laws, denial of class certification is not appropriate, the California Court of Appeal has ruled, reversing the lower court. Jones et al. v. Farmers Ins. Exchange, No. B237765 (Cal. Ct. App. Nov. 26, 2013). However, the Court also ruled that the named plaintiff was not an adequate class representative and allowed the employees to amend their complaint to name a new class representative.
Farmers Insurance Exchange employs claims representatives to assess physical damage to automobiles. Representatives spent most of their time in the field inspecting damaged vehicles, negotiating claims, and accessing and entering information onto Farmers’ database using laptop computers. The representatives traveled to their first assignment each day from home. According to the representatives, Farmers had a policy that the workday did not begin until they reached their first assignment and that preparatory tasks performed at home, such as syncing their computer, obtaining work assignments, and downloading property damage estimate forms, were not compensable.
Kwesi Jones worked for Farmers as a claims representative from 2006 to 2008, when he was terminated. In 2009, Jones, on behalf of himself and others similarly situated, filed a class action lawsuit alleging that Farmers failed to compensate the claims representatives for their pre-shift work in violation of the California Labor Code. The trial court denied the claims representatives’ motion for class certification, ruling that common issues did not predominate. The claims representatives appealed.
When deciding a motion for class certification, California courts examine whether “the issues which may be jointly tried, when compared with those requiring separate adjudication, are so numerous or substantial that the maintenance of a class action would be advantageous to the judicial process and to the litigants.” Sav-On Drug Stores, Inc. v. Superior Court, 34 Cal.4th 319 (Cal. 2004). The focus in a certification dispute is on whether common or individual questions are likely to arise in the action, rather than on the merits of the case. In general, if a “defendant’s liability can be determined by facts common to all members of the class, a class will be certified even if the members must individually prove their damages.” Brinker Restaurant Corp. v. Superior Court, 53 Cal.4th 1004 (Cal. 2012).
Appeals Court Decision
The claims representatives argued that the trial court erred in denying class certification because common issues existed regarding whether Farmers had a uniform policy denying them compensation for pre-shift work in violation of California law. The employer denied that such a policy existed. It argued against class certification because individual issues (such as the type of tasks performed and whether those activities were de minimus) predominated.
The Court rejected the employer’s argument. It held that whether the employer had a policy denying compensation for pre-shift work was "a factual question that is common to all class members.” Further, it said the employer’s liability turned on the existence of such a policy and its application. Indeed, the Court noted that the employer’s evidence regarding individual issues was related mainly to the claims representatives’ damages; this evidence did not preclude class certification on the policy issue.
However, the Court also found that Jones, the named plaintiff, was not an adequate class representative because he failed to submit a declaration establishing that he wanted to represent the class and understood his fiduciary obligations as a class representative. Accordingly, the Court reversed the denial of class certification and returned the case to the trial court with instructions that the claims representatives amend the complaint to name a new class representative.
This case highlights the types of issues amenable to class treatment. Here, the employees alleged the existence of a policy limiting the compensability of certain tasks. The Court decided the existence of such a policy and its application could be resolved on a class basis, this issue being separate from individual employees’ damages. An arguably unlawful policy administered to the putative class members, therefore, can be the basis for class certification. The case also underscores that employers should consider challenging an individual’s representative status if the named plaintiff cannot fulfill his or her fiduciary obligations.