When the much anticipated decision is Wal-Mart Stores Inc v Dukes.pdf was announced (see our post analyzing of the decision), many commentators, us included, believed it would significantly change the landscape of employment class actions. While the case involved allegations of sex discrimination, much of the language appeared to apply to other types of class actions, including those outside of the employment context entirely.
One such issue relates to whether Dukes will apply to collective actions under section 16(b) of the FLSA. Section 16(b) permits a wage and hour (or ADEA) claim to proceed collectively if the putative class members are “similarly situated.” Most courts interpret this to mean that the employees must prove that they were subject to “a common policy or plan that violated the law.” See, e.g., Iglesias-Mendoza v. La Belle Farm, Inc., 239 F.R.D. 363, 367-68 (S.D.N.Y.1967) (written by then district court judge Sonia Sotomayor). The Dukesdecision related, of course, to Rule 23(a)(2)’s requirement of commonality, which requires “questions of law and fact common to the class.” F.R. Civ. P. 23(a)(1). Because the standards are synonymous, the Dukes decision should limit section 16(b) collective actions as well.
A recent case in California also demonstrates that Dukes will apply to wage and hour suits. In Cruz v. Dollar Tree Stores.pdf, Case No. 3:07-04012-SC (N.D. Cal. July 8, 2011), the plaintiffs were a current or former store managers for the Dollar Tree stores in California. They brought a putative class action in the Northern District of California (the same district court as Dukes), claiming that they were misclassified as exempt and entitled to California overtime and meal and rest periods. The Court certified the class in 2009.
As is often the case in this type of litigation, the early victories went to the plaintiffs, but things went downhill from there. Shortly after the class was certified, the Ninth Circuit rendered its decisions in In re Wells Fargo Home Mortgage Overtime Pay Litigation, 571 F.3d 953 (9th Cir. 2009), and Vinole v. Countrywide Home Loans, Inc.,571 F.3d 935 (9th Cir 2009), resulting in the class being partially decertified in 2010. In April, 2011, the Ninth Circuit decided Marlo v UPS.pdf, Case No. 09-56196 (9th Cir. 2011), in which the district court had decertified a class of truck loading dock supervisors it had previously certified. We wrote about the Marlo case on May 6, 2011. As the Dollar Tree case approached trial, the court conducted a hearing to discuss trial management issues. In the interim, the Supreme Court decided the Dukes case.
These developments, the court found, were fatal to the class. The court described the holding in Dukesas providing “a forceful affirmation of a class action plaintiff’s obligation to produce common proof of class-wide liability in order to justify class certification.” It interpreted this requirement as on of “common proof to serve as the ‘glue’ that would allow a class-wide determination of how class members spent their time on a weekly basis.” Of equal importance, it found that the Supreme Court’s utter rejection of what it called “Trial by Formula” [capitalization original in Dukes] undermined any class-wide determination of liability by sampling or statistical means. Thus, the court decertified the class.
The Bottom Line: The Dukesdecision should apply to wage and hour actions. Increasingly, cases are being decertified even after they have been certified when courts realize that the plaintiffs’ claims cannot, as a practical or legal matter, be tried together.