[Homestead] Class Actions blunt regulations intended to legalise 80 hour weeks for wage-earners
tvoivozd at infionline.net
Sat Aug 28 17:51:19 EDT 2004
Yeah, they were intended to allow employers a license to steal from
wage-earners by labelling non-managerial work as managerial---real cute,
but something we have come to expect from the Orwellian Doublespeak like
"Clean Skies Initiative", and "Healthy Forests" aka "The Only Good Tree
Is A Dead Tree".
Class-Action Lawsuits for Overtime Pay Allowed
By Maura Dolan and Lisa Girion
Times Staff Writers
August 27, 2004
SAN FRANCISCO — In a closely watched labor law case, the California
Supreme Court cleared the way Thursday for a class-action lawsuit
brought by Sav-on Drug Stores workers who say they were misclassified as
managers and improperly denied overtime.
The unanimous ruling overturned a lower-court decision that would have
discouraged such suits.
Plaintiffs' attorneys maintain that many workers — despite being given
titles such as "store manager" or "team leader" — spend most of their
day on non-managerial tasks such as stocking shelves or tending a cash
register, rather than overseeing any aspect of the business.
Companies had hoped that the lower court's position would slow a wave of
overtime litigation that has swept the state in recent years, costing
firms hundreds of millions of dollars in judgments and settlements. A
broad swath of corporate California has been hit, including Farmers
Insurance Group, Bank of America Corp., RadioShack Corp., Rite Aid
Corp., Starbucks Corp., Taco Bell Corp. and United Parcel Service Inc.
As a result of the high-court ruling, experts said, California
businesses can expect a renewed surge of class-action litigation seeking
"There are probably a fair number of these lawsuits waiting in the wings
for the court to clarify what the standards are," said Steven Katz, a
Los Angeles lawyer who wrote a friend-of-the-court brief for other
businesses in the Sav-on case. "Now that that has happened, I think
we're going to see those suits being filed."
A spokeswoman for Sav-on, which has about 300 stores in California,
declined to comment on the ruling. Rex S. Heinke, a Los Angeles attorney
who represented the drugstore chain, said he couldn't comment because
the litigation was ongoing.
The California Supreme Court ruling came the same week that new federal
overtime regulations took effect. Those rules, which are expected to
reduce the amount of overtime paid to workers and reduce litigation,
were opposed by organized labor and embraced by the business community.
The federal regulations, however, are expected to have little effect in
California, which has its own labor laws.
Under the state statutes, workers who spend more than 50% of their time
performing the duties of hourly workers, even if they're called
managers, are eligible for overtime pay. Eligible workers who put in
more than eight hours a day on the job are supposed to be paid for the
overtime at time-and-a-half — 1.5 times their usual hourly rate.
Under federal law followed in most other states, managers may be exempt
from overtime pay if their primary duties are supervisory.
The state high court's decision stemmed from a lawsuit brought by two
Sav-on managers who contended that the chain misclassified its assistant
managers and operating managers as exempt from the state's overtime wage
Lawyers in the case have estimated that 600 to 1,400 Sav-on workers may
be entitled to back pay if the lawsuit succeeds.
A trial judge in Los Angeles agreed to certify the suit as a class
action, a move that was appealed by Sav-on, a unit of Albertsons Inc.,
which is based in Boise, Idaho. The state Court of Appeal reversed the
trial judge, finding that managers in different stores spent their time
in such different ways that they were not similar enough to be treated
the same in a mass trial or settlement.
In overturning the Court of Appeal's decision, the high court stressed
that it was not ruling on the factual merits of the plaintiffs' case.
The judges said the employees had presented enough evidence of common
grievances to have their lawsuit certified as a class action.
"The record contains substantial, if disputed, evidence that deliberate
misclassification was defendant's policy and practice," Justice Kathryn
Mickle Werdegar wrote for the court.
Without class actions, she added, there would be a "multiplicity of
trials conducted at enormous expense to both the judicial system and the
Brad Seligman, an Oakland lawyer who represented the Sav-on workers,
said the ruling might prompt employers to be more careful about how they
classify jobs. Others suggested that businesses might now turn to state
lawmakers and the Schwarzenegger administration for relief from such
The Sav-on case, Seligman said, also is significant because the court
emphasized that there was a strong public policy argument in favor of
class actions generally.
"This will make it much harder for a defendant to argue in other cases
that you can't have a class because you have to prove each individual's
claims," said Seligman, who is also representing 1.6 million female
Wal-Mart Stores Inc. employees in a federal discrimination case.
He said the Supreme Court indicated in its ruling that surveys,
statistics and other kinds of evidence could be used to support class
Dennis Riordan, another lawyer for the Sav-on employees, said the
decision was "absolutely critical to working people, particularly those
who really aren't managers."
"The decision makes it clear that the Court of Appeal not only was
wrong," he said, "but egregiously wrong."
Copyright 2004 Los Angeles Times
More information about the Homestead