Wednesday, June 2, 2004
Justices Appear Split Over Allowing Class Action for Overtime Pay
By KENNETH OFGANG, Staff Writer/Appellate Courts
California Supreme Court justices appeared divided yesterday over whether to allow a pair of Sav-On Drug Stores managers to bring a class action on behalf of hundreds of their fellow employees who did not receive overtime pay.
Chief Justice Ronald M. George questioned attorneys for the plaintiffs and Sav-On as to whether it was appropriate for the Court of Appeal to “second-guess” Los Angeles Superior Court Judge Irving S. Feffer, who two years ago certified a class of up to 1,400 workers whom the company classified as “operating managers” or “assistant managers” at its 300 retail stores.
Brad Seligman of The Impact Fund—a Berkeley-based foundation that advocates on behalf of plaintiffs in employment, civil rights, and environmental cases—said the Court of Appeal was in error. Div. Four, in a 2002 opinion by since-retired Presiding Justice Charles Vogel, held that class-action treatment was inappropriate because the proper characterization of each affected employee as exempt or non-exempt would depend on facts specific to that person.
But Rex Heinke of Akin, Gump, Strauss, Hauer & Feld, representing Sav-On, said the Court of Appeal correctly determined that the trial judge’s decision could not stand because the plaintiffs did not present substantial evidence that the class-wide issues predominated over those affecting individual plaintiffs.
Heinke’s view appeared to pick up the support of Justice Marvin Baxter, who questioned Seligman as to whether the need for each class member to support his or her claim “when the date for collection comes” was sufficient to support Div. Four’s conclusion that a class action was inappropriate.
Seligman responded that it was “a weighing question,” and that the issue with which Baxter was concerned was but one factor to be considered. The weighing function, the attorney continued, belongs to the trial judge, not the appellate courts.
Position of Amici
While arguing that the Court of Appeal was correct, Heinke took pains to state that he was not advocating a per se rule that would bar wage-and-hour class actions in California. In doing so, he acknowledged, he was separating himself from the position of some of the amici on his side, who included other retailers and trade groups and the Pacific Legal Foundation.
The plaintiffs, Robert Rocher and Connie Dahlin, claim the company improperly treated them and their fellow class members as managerial employees exempt from overtime laws, even though more than 50 percent of their time was devoted to tasks classified as non-exempt.
But Heinke pointed to declarations submitted by Sav-On from more than 50 members of the putative class, suggesting substantial variances in actual duties from store to store. Many factors determined what duties an OM or AM performed, the lawyer said, including store size and the predilections of the general manager overseeing the particular store.
State regulations make a retail employee exempt from overtime pay if “more than one-half of the employee’s work time” is spent “in work which is...intellectual, managerial, or creative, and which requires exercise of discretion and independent judgment.”
Seligman said the trial judge properly relied on declarations from former managers, including a woman who had been general manager at eight different Sav-Ons and swore that the duties of the OMs and AMs did not vary much from store to store, and did not vary from those of supervisors, who were paid an hourly wage and qualified for overtime
The number of declarations by current Sav-On employees, a factor to which the Court of Appeal gave emphasis, appeared not to sway Justice Joyce L. Kennard, who suggested that current workers might have a greater motivation than former ones to support the employer’s version of the facts.
Copyright 2004, Metropolitan News Company