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Court of Appeal:
Class Certification Properly Denied in Action Against AFI
Plaintiff Claims Volunteers at Film Festival Were Lured by Promise of Free Admission, but Work Hours
Were So Long That There Was No Opportunity to Enjoy Event, Requiring Compensation as Employees
By a MetNews Staff Writer
The Court of Appeal for this district held on Friday that a judge correctly denied class certification in an action which alleges that the American Film Institute commits wage and hour violations by failing to recognize that under California law, it can’t use free labor at its annual film festival and the volunteers are actually employees.
Div. Two’s presiding justice authored the opinion. It affirms an order by Los Angeles Superior Court Judge Daniel J. Buckley, agreeing with him that common questions do not predominate.
The plaintiff, paralegal Laurie Woods, a former AFI volunteer, alleged in her first amended complaint, filed June 19, 2018:
“Through websites, social media and other means of advertising, Defendants recruited thousands of Volunteer Employees to work at their events. Instead of paying Volunteer Employees for their work, Defendants provided volunteers only with free admission to the event a volunteer employee would work. However, the value of this ‘free admission’ was highly overstated and essentially worthless, as volunteers spent the majority of their time performing duties under the direction and control of Defendants.”
Promise Is ‘Illusory’
In light of work shifts “which often lasted over 12 hours,” she asserted, “the promise of free admission was illusory.”
The pleading sets forth alleged violations of the Labor Code and the Business and Professions Code by failing to provide meal and rest breaks, minimum wages, overtime, and other rights.
“Plaintiff and the putative class were entitled to all the protections afforded to them as non-exempt employees under California law,” she maintained.
An exemption for non-profit organizations that use volunteers is inapplicable, Woods contended, because a film festival does not serve “a public service, religious, or humanitarian objective.”
Buckley’s Ruling
Buckley held on June 25, 2020, that “(1) The questions of law or fact common to the class do not predominate over the questions affecting the individual members: and (2) a class action is not the superior means for adjudicating the claims because the individual issues presented by this case are unmanageable.”
Buckley noted that the action is based on a “relatively novel” theory.
He said that “that both employment and independent contractor relationships always contemplate an expectation of monetary compensation in exchange for services rendered,” adding that an “ ‘employee’ (or even independent contractor for that matter) expects at least some level of monetary compensation.”
The former presiding judge observed that with those who lacked expectation of payment not qualifying as employees, if a class action proceeded, “each individual class member would be required to testify that they did, or did not, expect payment in return for their services provided during the AFI film festival,” remarking:
“This would splinter any potential class action into hundreds of individual trials.”
Lui’s Opinion
Lui agreed. He wrote:
“If AFI is correct that it may properly use voluntary labor, it would not be liable to class members who expected no compensation. But the class is defined more broadly than such persons. The proposed class of persons ‘who were not paid for their work’ includes persons who did not expect to be paid as well as any class members who expected payment but did not receive it. The persons who expected payment might be entitled to compensation as employees. The trial court reasonably concluded that whether particular class members expected payment would need to be resolved through individual proof that would predominate over common issues.”
The presiding justice noted that Woods said that she “made clear that she did not intend to argue that either she, or anyone else who worked” at the festival “expected to be paid.” He responded:
“Woods’s theory is apparently that, if she did not claim that any class members expected payment, the trial court could ignore the possible individual issues and the case could be resolved on the common legal issue alone.
“However, the relevant question is not what Woods intended to argue but rather what persons the class contains. If a class were certified and the case were litigated to resolution, class members who were given notice and did not opt out would be bound by the outcome….Unless the individual expectations of class members were considered at trial, class members who actually expected payment would see their claims extinguished if AFI prevailed. The trial court properly rejected the invitation to ignore the individual interests of unnamed class members.”
Expectation of Consideration
He said Woods’s contentions reflect an expectation of receiving something of value—free admission—which, if illusory, could give rise to as claim to some other form of recompense, observing that “allegations of promised compensation, if proved, might support contract or estoppel theories of employment.”
Lui rejected the plaintiff’s proposed limitation on non-profit entities exemption from wage and hour rules according to their “objectives,” saying:
“[W]e hold only that persons may volunteer for nonprofit entities, including arts organizations such as AFI, without becoming employees under California law.”
The case is Woods v. American Film Institute, B307220.
Shaun Setareh and Thomas Segal of the Beverly Hills firm of Setareh Law Group represented Woods. Attorneys for AFI were Gary M. McLaughlin, Aileen M. McGrath, Jonathan P. Slowik and Victor A. Salcedo of the Century City firm of Akin Gump Strauss Hauer & Feld.
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