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Ninth Circuit Addresses Effect of Dukes on Wage and Hour Class Actions, Discussion by Las Vegas Employment Attorney Andre Lagomarsino

In Wal-Mart Stores, Inc. v. Dukes, the Supreme Court overturned the Ninth Circuit Court of Appeals decision affirming a district court’s decision to certify a class action lawsuit against Wal-Mart for gender discrimination in pay and promotion policies and practices under Rule 23(b)(2) of the Federal Rule of Civil Procedure. Tightening the standards plaintiffs must satisfy to meet the commonality requirement of Rule 23, the high court held that the Wal-Mart plaintiffs did not have enough in common to constitute a class since all the plaintiff’s had not suffered the same injury. Furthermore, the fact that local Wal-Mart managers commonly had the discretion to make employment decisions based upon subjective factors did not meet the commonality requirement of Rule 23. Finally, because the plaintiffs were also seeking individual monetary claims, including for back pay, certification was disallowed under Rule 23.

The latter reasoning, that a defendant has a due process right “to individualized determinations of each employee’s eligibility for back pay,” at least under Rule 23(b)(2), has now forced the Ninth Circuit to address whether Dukes applies only to discrimination claims brought under Rule 23, or all wage and hour class actions. Though plaintiffs’ attorneys have argued that Dukes should be limited substantively to discrimination cases and procedurally to Rule 23(b)(2) class actions, recent court rulings have shown that the commonality and due process rulings held in Dukes have been applied to wage and hour claims, at least in state law class actions. The Ninth Circuit may be ready to agree to an extended application of Dukes.

In Wang v. Chinese Daily News, in 2004, three employees of the Chinese Daily News filed a hybrid class action in a California federal district court, alleging the newspaper had committed violations of both the FLSA and California Labor Code. Specifically, the newspaper had failed to pay the employees for overtime, and not allowed the employees to take meal and rest breaks. In 2005, a district judge certified a California class of 200 individuals under Rule 23(b)(2), or, in the alternative, 23(b)(3). (Rule 23(b)(2) class claims seek equitable relief, such as an injunction, while (b)(3) classes seek monetary relief. Any plaintiff seeking class certification under either provision must show that there are common questions of law or fact among the putative class members, but a plaintiff seeking a (b)(3) class must also show that those questions predominate over individualized questions and that a class action is superior to other methods of adjudication.) In 2007, a jury returned a verdict in the plaintiffs’ favor, and in 2008. In 2010, the Ninth Circuit Court of Appeals affirmed the district court’s decisions on class certification and judgment. The Supreme Court has now returned Wang to the Ninth Circuit to reconsider based on Dukes.

Wang plaintiffs have conceded that their class was not properly certified under Rule 23(b)(2). However, Wang plaintiffs argue that the class can be properly certified under Rule 23(b)(3). The newspaper is arguing that the tighter Rule 23 commonality requirement and due process concerns in Dukes, prevent certification under Rule 23(b)(2) or (3).

If the Ninth Circuit holds with the newspaper, Ninth Circuit employers will have a stronger defense against class action lawsuits.

The Las Vegas law office of Lagomarsino Law did not represent anyone involved in any cases that may be referenced above. This commentary is for educational purposes. If you would like to be represented by an attorney in our Las Vegas office, contact our office for a free confidential case review and receive a response within 24 hours. Call Toll Free 866-414-0400.