CA Appellate Court Admonishes Trial Judges to “Stay Classy” in Certifying Wage and Hour Claims

In Martinez v. Joe’s Crab Shack Holdings (Nov. 10, 2014), the Court of Appeal for the Second District of California reinforced the importance of the class action as a preferred means of adjudicating wage and hour cases. “Litigation by class action has long been recognized as a superior method of resolving wage and hour claims in California, including those seeking redress for unpaid overtime wages.”

In September of 2007, Roberto Martinez filed a class action seeking to represent a class of salaried managerial employees who worked at different Joe’s Crab Shack (JCS) restaurants in California and had been misclassified as exempt employees and denied overtime compensation. In June 2011, Martinez and other former managers moved for certification of a class consisting of “[a]ll persons employed by Defendants in California as a salaried restaurant employee in a [JCS] restaurant at any time since September 7, 2003.”

The plaintiffs presented training and operation manuals demonstrating JCS’ uniform hiring and training practices throughout its stores. Specifically, the operations manual applied to all restaurants and every employee; each restaurant offered the same menu; and all managerial employees were evaluated using the same form and procedure. Plaintiffs also introduced declarations from twenty two (22) current and former salaried, managerial employees who (1) claimed they routinely worked more than the 50-55 hours they were told they would be working and (2) estimated performing hourly employee tasks between 50 percent to 95 percent of the time. Under the executive employee exemption to overtime compensation, an exempt employee must spend at least half of his or her time performing managerial functions.

Though the Appellate Court acknowledged obstacles in certifying certain cases, it ultimately reversed the trial court’s order denying class action status: “[W]e understand from Brinker, Duran and Ayala that classwide relief remains the preferred method of resolving wage and hour claims, even those in which the facts appear to present difficult issues of proof. By refocusing its analysis . . . the trial court may in fact find class analysis a more efficient and effective means of resolving plaintiffs’ overtime claim.”