November 16, 2012

New Class Action Decisions Continue To Favor Employers

In a post-Brinker and Dukes world, employer-friendly wage-hour decisions are becoming more and more common.  The decision of the California First District Court of Appeal’s decision in Morgan v. Wet Seal Inc. continues that trend.

In that case, the court upheld a trial court’s decision to deny class certification of three plaintiffs’ claims against their former employer Wet Seal, Inc.  The plaintiffs alleged that Wet Seal violated California law by: (1) requiring employees to purchase Wet Seal apparel; and (2) travel between store locations without reimbursing them for mileage.

Why was class certification denied?  Because, as courts are now much more likely to find, individual issues predominated over common issues.  In this case, the company’s written dress code policy was vaguely written and did not explicitly state employees must purchase Wet Seal clothing.  As a result, the court found that individual inquiries were necessary to determine whether the company compelled employees to wear its clothing, what apparel the dress code in fact required, and whether any purchases of Wet Seal clothing were an obligated expenditure.  The same was true with the travel expense reimbursement claim, which required numerous individual inquiries because the company’s written policy stated that it did reimburse employees for reasonable expenses.

What’s the take-away from this case?  It reflects a positive movement for employers in wage and hour class actions of courts denying class certification due to individual required inquiries.  It also reinforces the importance that employers maintain written policies that accurately reflect the law, which will help reduce the likelihood of such lawsuits and help defend against them.  And, it is useful to employers in that it clarifies that employers need only reimburse employees for purchasing a product where they require, and not merely encourage, employees to do so.


Category: Class Actions,