Over the last two years, California employers have gotten progressively better news from the state and federal courts on the wage and hour class action front. The trend began in 2011 with two favorable U.S. Supreme Court decisions. In Dukes v. Wal-Mart, the court significantly tightened the federal standards for class certification, suggesting in the process that looser state standards might violate the due process guarantees of the U.S. Constitution. In AT& T Mobility v. Concepcion, the Supreme Court held that an arbitration agreement waiving class claims is valid and enforceable, news in California where previous state court decisions were to the contrary. Then one year ago, in April 2012, the California Supreme Court issued its Brinker Restaurants decision, holding that liability for violation of California meal period rules is not automatic but rather depends on why the employee failed to take a compliant meal period. The meal period cases since Brinker have overwhelmingly held that meal period claims are not amenable to class treatment because the individual issues overwhelm the common ones: for each class member, for each day, the court must ask “why did you miss your meal period?” to determine whether liability is triggered.
Then, on March 28, 2013, the U.S. Supreme Court issued yet another decision that is sure to have further limiting effects on wage and hour class actions, Comcast Corp. v. Behrend. Comcast itself is not a wage/hour class action, but rather an anti-trust case. The plaintiffs claimed that Comcast’s actions in buying up competing cable systems often in return for Comcast pulling out of areas where it was less competitive, violated the Sherman Act. They were successful in obtaining certification of a class of two million Comcast subscribers in the Philadelphia area. The Supreme Court, however, held that certification should not have been granted because the damages model proposed by the plaintiffs did not fit their liability theory and as a result “[q]uestions of individual damages calculations will inevitably overwhelm questions common to the class.” To warrant certification under the federal rules, the court held, class-wide damages must be calculable through a “common methodology.” To determine whether this standard has been met, trial courts must conduct a “rigorous analysis.”
What this means for employers:
The impact of the Comcast decision on wage and hour class actions is potentially significant, because damages in these cases can be very fact intensive and based on facts specific to each individual class member. For example, in a meal period case based on a well-established class-wide policy or practice of failing to provide compliant meal periods – which until Comcast would be sufficient to warrant class certification – damages would still have to be calculated individually because on any given day an individual employee may have skipped the meal period voluntarily. The appropriateness of class certification in such cases is now in question after Comcast. The Comcast decision gives employers a previously unavailable weapon for opposing class certification in wage and hour cases, at least in federal court. It remains to be seen how effective that weapon will be in federal trial courts as well as how receptive California state courts will be to its use.