Employment Class Action Newsletter—August 4, 2011

Alerts / August 4, 2011

In This Issue:

Dukes Decision Results in Decertification of California Overtime Case
When the much anticipated decision in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. ___ (2011) was announced, most commentators believed that it would significantly change the landscape of employment class actions.

CAFA’s Amount in Controversy Requirement: Courts’ Scrutiny of Evidence Varies Greatly
One of the most vexing issues for outside and in-house counsel is what type and how much evidence to provide in support of Class Action Fairness Act (“CAFA”) removal. This article revisits that important issue and shows the trend in recent decisions.

Updates From Our Employment Class Action Blog
Please visit Baker Hostetler’s Employment Class Action Blog. We created this blog to acquaint employers, clients and other interested parties with developing issues impacting employment class actions, including those involving employment discrimination, wage and hour, civil rights and benefits issues.

DUKES DECISION RESULTS IN DECERTIFICATION OF CALIFORNIA OVERTIME CASE

By Gregory V. Mersol

When the much anticipated decision in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. ___ (2011) was announced, most commentators believed that it would significantly change the landscape of employment class actions. While the case involved allegations of sexual discrimination, much of the language appeared to apply to other types of class actions, including those outside of the employment context entirely.

One such issue relates to whether Dukes will apply to collective actions under section 16(b) of the FLSA. Section 16(b) permits a wage and hour (or ADEA) claim to proceed collectively if the putative class members are “similarly situated.” Most courts interpret this to mean that the employees must prove that they were subject to “a common policy or plan that violated the law.” See, e.g., Iglesias-Mendoza v. La Belle Farm, Inc., 239 F.R.D. 363, 367-68 (S.D.N.Y.1967) (written by then district court judge Sonia Sotomayor). The Dukes decision related, of course, to Rule 23(a)(2)’s requirement of commonality, which requires “questions of law and fact common to the class.” Fed.R.Civ.P. 23(a)(1). Because the standards are synonymous, the Dukes decision should limit section 16(b) collective actions as well.

A recent case in California also demonstrates that Dukes will apply to wage and hour suits. In Cruz v. Dollar Tree Stores, Case No. 3:07-04012-SC (N.D. Cal. July 8, 2011), the plaintiffs were current or former store managers for the Dollar Tree stores in California. They brought a putative class action in the Northern District of California (the same district court as Dukes), claiming that they were misclassified as exempt and entitled to California overtime and meal and rest periods. The Court certified the class in 2009.

As is often the case in this type of litigation, the early victories went to the plaintiffs, but things went downhill from there. Shortly after the class was certified, the Ninth Circuit rendered its decisions in In re Wells Fargo Home Mortgage Overtime Pay Litigation, 571 F.3d 953 (9th Cir. 2009), and Vinole v. Countrywide Home Loans, Inc., 571 F.3d 935 (9th Cir 2009), resulting in the class being partially decertified in 2010. In April, 2011, the Ninth Circuit decided Marlo v. United Parcel Serv., Inc., Case No. 09-56196 (9th Cir. 2011), in which the district court had decertified a class of truck loading dock supervisors it had previously certified. As the Dollar Tree case approached trial, the court conducted a hearing to discuss trial management issues. In the interim, the Supreme Court decided the Dukes case.

These developments, the court found, were fatal to the class. The court described the holding in Dukes as providing a forceful affirmation of a class action plaintiff’s obligation to produce common proof of class-wide liability in order to justify class certification.” It interpreted this requirement as of “common proof to serve as the ’glue’ that would allow a class-wide determination of how class members spent their time on a weekly basis.” Of equal importance, it found that the Supreme Court’s utter rejection of what it called “Trial by Formula” [capitalization original in Dukes] undermined any class-wide determination of liability by sampling or statistical means. Thus, the court decertified the class.

While only time will tell how faithfully trial courts will adhere to Dukes, the holdings in that case should apply to wage and hour actions. As the Cruz decision reflects, increasingly, wage and hour cases are being decertified even after they have been certified when courts realize that the plaintiffs’ claims cannot, as a practical or legal matter, be tried together.

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CAFA’S AMOUNT IN CONTROVERSY REQUIREMENT: COURTS’ SCRUTINY OF EVIDENCE VARIES GREATLY

By John B. Lewis and Andrew T. Johnson

One of the most vexing issues for outside and in-house counsel is what type and how much evidence to provide in support of Class Action Fairness Act (“CAFA”) removal. This article revisits that important issue and shows the trend in recent decisions.

“The district courts shall have original jurisdiction of any civil action in which the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs . . . .”[1] These simple words in CAFA are at the heart of the amount in controversy Circuit divergence. As a previous article in this newsletter explained, the Circuits disagree on the appropriate standard to use in evaluating evidence establishing the amount in controversy, be it “legal certainty,” “reasonable probability,” or “preponderance.” However, even within a circuit, courts scrutinize evidence quite differently.

What evidence courts credit can have an enormous impact on whether a case remains in federal court. Some courts seemingly approach this issue with a great deal of common sense as opposed to requiring the defendant to proceed with mathematical precision. Others carefully analyze every assumption the defendant makes, and rigorously test calculations for statistical validity. This article reviews over a dozen recent opinions, and places them on a continuum ranging from decisions that broadly construe federal CAFA jurisdiction, an outcome that many employers and defendants applaud, to those that narrowly restrict it. Understanding the ways in which courts scrutinize evidence purporting to establish the amount in controversy, enables defendants to more successfully approach removal issues.

Cases Favoring Broader Access to Federal CAFA Jurisdiction

Several recent cases demonstrate that, in some courts, establishing federal jurisdiction based on CAFA can be relatively straight-forward and based on a common sense approach.

For example, the United States District Court for the Northern District of California looked to the magnitude of the class in assessing the amount in controversy requirement in a recent consumer class action.[2] Tens of thousands of individual California homebuyers who received mortgages through Countrywide Home Loans sued as a class. Based on the defendants’ removal paperwork and other evidence submitted by the parties, the court determined that the class was so large that the amount in controversy would be met. Interestingly, the court did not describe or even allude to any specific calculations it performed, and therefore may have been using a great deal of judicial common sense.

Similarly, a District Court in Maine simply multiplied the class size by the named plaintiff’s alleged damages to conclude that the amount in controversy was met.[3] Prior to the class action, the named plaintiff filed a claim under the Federal Tort Claims Act, seeking $15,000 in damages. The court multiplied this figure by 528, which was the class size. The plaintiffs’ attorney unsuccessfully objected to the court’s methodology, arguing there was no evidence that the other class members’ injuries were as severe as the named plaintiff’s.

The declaration of a human resources employee stating the number of potential class members, their salary, and hours worked per year, based on a review of normal business records, was sufficient to convince the District Court for the Central District of California in Jimenez v. Allstate Ins. Co. that the amount in controversy was met.[4] The defendant was not required to provide the court with the underlying business records. The defendant’s damage estimates, which included each class member working one hour of unpaid overtime per week were conservative, according to the court, in light of the plaintiffs’ allegation that they consistently worked more than eight hours in a day.

A similar declaration by a human resources information systems analyst helped convince the Central District of California to deny remand on a state wage and hour class action on April 25, 2011.[5] Among other causes of action, the plaintiffs alleged that their employer failed to pay wages upon termination. The human resources employee (1) determined the hourly wage rate for each of the 838 putative class members, (2) multiplied those rates by eight hours per work day, and (3) multiplied that amount by 30, which was the maximum numbers of penalty days of wages the plaintiffs were seeking. This calculation resulted in a potential recovery of over $5 million.

A defendant could use a settlement demand letter from the plaintiffs to establish the amount in controversy, according to another Central District of California decision, especially when the plaintiffs did not later disavow the demand or present contrary evidence showing that the actual amount in controversy actually was less.[6] The plaintiffs tried distancing themselves from their $10 million demand by arguing that the defendants’ counteroffer superseded theirs. In denying remand, the court held that what the defendant actually owed was irrelevant, let alone what the defendant claimed to owe during settlement discussions.

Recently, the Seventh Circuit in Blomberg v. Service Corp. Int’l held that a defendant’s estimate of potential damages, based on related cases and the named plaintiffs’ depositions, sufficiently demonstrated the amount in controversy in a wage and hour class action.[7] The defendant presented depositions from two of the three named plaintiffs, taken in a related case from a different state. In the depositions, the plaintiffs alleged that, between the three of them, they worked 2,600 hours of unpaid overtime per year. This was greater than the roughly 550 hours per multi-year class period each employee would need to have worked to satisfy the amount in controversy requirement in this case. Moreover, the defendants drew the court’s attention to a related class action, in which a class of 300 plaintiffs acknowledged that together their claims exceeded $5 million. By analogy, the defendants argued that here with a more numerous class of 538 members, the threshold would surely be exceeded.

The court held that the defendant’s estimate of the amount in controversy was a “plausible, good-faith estimate” sufficient to satisfy the preponderance standard. Although the court acknowledged that the defendant could have offered better evidence, it was not swayed by the plaintiffs’ argument that the amount in controversy was not sufficiently established due to the defendants’ failure to explain why the named plaintiffs’ claims were typical of the class members’ or why the out-of-state action was similar to the case at bar.

Finally, at least two courts have found that a plaintiff’s refusal to sign a stipulation limiting damages to $5 million can be evidence of the amount in controversy.[8]

More Restrictive Cases—Amount in Controversy Threshold Met

In contrast to the above decisions which used a more ad hoc approach, courts often follow a more predictable course. Some seem to require that essentially defendants must establish the plaintiffs’ damages. As an example, in a constitutional challenge to a state’s use of private probation contractors, a private probation company satisfied the amount in controversy in large part based on a declaration by the defendant’s chief operating officer.[9] He outlined how much money the company received from three specific types of services the plaintiff was challenging as unconstitutional, thus establishing the amount in controversy.

More Restrictive Cases—Amount in Controversy Threshold Not Met

Often when courts find that defendants did not establish the amount in controversy, the evidence presented was not sufficiently comprehensive, suggesting that these courts are not judicial outliers.[10]

For example, instead of presenting detailed evidence regarding the number of relevant employees and their wages in a California case that contained wage and sexual harassment allegations, the defendants researched published sexual harassment verdicts and settlements.[11] Based on this research, they determined that an average individual sexual harassment verdict or settlement was over $2 million. Multiplied by 200 plaintiffs, the defendants argued that the amount in controversy was plainly met. The court found the evidence too speculative, as it was not based on the facts of the case, and consequently remanded the case to state court.

On July 6, 2011, the Northern District of California remanded a wage and hour class action to state court in large part because the defendant employer did not use the business records it had to provide accurate data to the court regarding the size of the subclasses in the case and potential monetary relief.[12] In Nolan v. Kayo Oil Co., a store clerk lead plaintiff brought an action representing approximately 1,000 hourly employees, broken into three subclasses, who allegedly did not receive proper pay statements, nor compensation for: (1) missed meal periods; (2) working alone at night and not receiving a meal period; and (3) overtime. To show the amount in controversy, the employer multiplied 1,000 employees by the number of possible pay periods and the maximum state statutory damages for improper pay statements, concluding that this alone exceeded $5 million. The employer also multiplied the number of class members by one hour of unpaid overtime per week to conclude that more than $5 million was at stake on that claim alone as well. Yet, the court found these calculations to be flawed because the employer did not attempt to determine how many employees were in each subclass, how many of the 1,000 worked for the entire class period, whether the class members were full or part time, how many meal periods were actually missed, how many employees worked alone at night, and the number of weeks each class member worked; all of which was relevant information the employer possessed.

In another California wage and hour case, Munoz v. Cent. Parking Sys., Inc., “unwarranted” assumptions doomed the defendant’s calculation of the amount in controversy.[13] One of the defendant’s non-expert employees estimated the company’s maximum liability. The estimate was based on the class members’ average hourly wage, and assumed that for each week, every employee missed one meal period, suffered one minimum wage violation, and worked one hour of unpaid overtime. Additionally, an arbitrary amount of $2,550 per class member for state pay-statement violations was also included in the damage calculation. The court disapproved of the defendant’s use of an average wage instead of the class members’ actual wages, and found no basis for the other potential damages the defendant included.

Likewise, a defendant’s attempt at proving the amount in controversy via simple multiplication failed to convince the court in the Central District of California to retain jurisdiction in a wage and hour case.[14] The defendant calculated the amount in controversy to be in excess of $40 million, but did not explain the basis for the assumption that each of the 440 class members worked 200 days per year and missed one meal break per day. All of the defendant’s other calculations, such as various statutory penalties and attorneys’ fees, were derived from this assumption and likewise were not credited by the court.

The same court held in February 2011 that the defendants in Ellis v. Pac. Bell Tel. Co., a different wage and hour class action, did not provide adequate evidence of how many hours of unpaid overtime class members worked.[15] The defendants argued that at least $5 million was at stake because each class member worked at least 3.74 hours of overtime every week. However, the defendants failed to point to any allegation in the plaintiffs’ complaint supporting this figure, and instead relied on evidence from a recently-settled related suit from a different jurisdiction.

One of the defendants’ attorneys was involved in the other case’s settlement, so he provided a declaration to the court summarizing the negotiations. He claimed that the plaintiffs in the related case claimed they worked more than 3.89 hours of overtime per week, an amount that, if replicated in this case, would result in more than $5 million being in controversy. The court rejected the comparison of the two cases, criticizing the defendants for not adequately supporting their contention that the plaintiffs worked 3.89 hours per week in the related case, for not explaining why the claims in the related case were similar to the ones in the case at bar, and why the plaintiffs’ allegations made during settlement negotiations were credible.

A defendant in Johnson v. U.S. Vision, Inc., established the amount in controversy to the satisfaction of a federal district court, but not the Ninth Circuit.[16] The defendant’s argument in this wage and hour action was based in part on multiplying the class size by the named plaintiff’s potential damages. This calculation was augmented by a declaration from an employee familiar with the defendant’s payroll practices, which detailed the named plaintiff’s most recent hourly rate of pay, the number of individuals employed in the plaintiff’s job classifications and their average hourly wage, the number of employees who left the company during the class period, and the number of possible wage statements for each employee per year. In district court, the plaintiff attacked this simple multiplication, arguing that different class members worked different hours and therefore sustained different damages. But, the district court pointed to language in the complaint suggesting that all the plaintiffs worked the same hours. This, coupled with the detailed declaration by a competent employee, the named plaintiff’s damage allegation, and the language in the complaint, was enough to convince the district court that the amount in controversy threshold was established to a legal certainty.

The Ninth Circuit, however, reversed, noting that although the “legal certainty standard is difficult to define, at a minimum, Defendants must produce enough evidence to allow a court to estimate with some certainty the actual amount in controversy.”[17] (Emphasis added). Among other criticisms, the Ninth Circuit specifically pointed to the defendant’s failure to prove how many days per year the class members worked, how many vacation days class members lost due to the defendant’s policies, the length of the class members’ shifts, and the average hourly pay for class members who were separated from the company during the class period.

Finally, an Oregon District Court in a class action based on state wage and hour law and breach of contract also scrutinized a defendant’s assumptions and reliance upon the word “typicality” in a complaint.[18] The defendant multiplied the class size by the amount of two statutory wage and hour penalties to purport to show that more than $5 million was in controversy. However, the court noted that the defendant did not show whether the class members were full or part-time employees, or how much they were paid. Both of these factors would affect the amount of the statutory penalties. The defendant also argued that the “typicality” section in the complaint—found in every Civil Rule 23 class action complaint—meant that the class members’ claims were the same as the named plaintiffs’. However, as the court noted, “typicality” only means that class members were injured by the same practices, not that they necessarily suffered the same amount of damages.

Courts That Seem Hostile to Federal Jurisdiction Under on CAFA

Despite a defense counsel’s best efforts, sometimes courts make it extraordinarily difficult to establish the amount in controversy. These courts apparently want the defendants to concretely establish the plaintiffs’ damages.

In one such case, a defendant insurer allegedly failed to pay California consumers whose cars were “totaled” the value of any gasoline left in the gas tanks.[19] To prove that more than $5 million was at stake, American International Group, Inc., first calculated the average size of a fuel tank by analyzing those found in nation’s top selling cars. The defendant also determined the average price of gas in California for the period in question. Based on $3.12 per gallon, an average sized fuel tank of sixteen gallons being half full, and 71,399 claims, the defendant calculated that compensatory damages alone could be $1.7 million. Combined with punitive damages available under state law and attorneys’ fees, this would satisfy the amount in controversy. All of these assumptions seem reasonable, and the defendant erred on the side of making a conservative estimate by only using half a tank of gas.

Yet, the court took issue with the defendant’s calculations. It noted that the top-ten selling cars in the United States might not be the top ten selling cars in California, and even if they were, that they were not necessarily the top ten vehicles involved in California accidents. Moreover the “most troubling” aspect of the defendant’s argument on this point, according to the court, was that the defendants possessed “all the evidence necessary to meet their burden—the make, model and age of the 71,399 cars at issue in this case” but failed to present it to the court.[20] Further, although the defendant took the gas price estimate from the California Energy Commission’s average gas price data, the court was not satisfied in the validity of the state commission’s calculations, which were based on a sample of 38 California gas stations. The court concluded that the defendant did not demonstrate those stations were a representative sample and that the commission’s data was accurate.

In a case involving the release of noxious gas from a Louisiana chemical plant, the Fifth Circuit affirmed a district court’s remand order.[21] The plaintiffs were a class of individuals affected by the gas. The defendant, Dow Chemical Company, used census data for the area where the gas spread to determine the number of potential plaintiffs. Neither the district court nor the appellate court were persuaded by that methodology, holding that the defendant improperly conflated geographic area with affected individuals.

Finally, the Eastern District of California closely scrutinized a defendant’s wage and hour calculation and found it to be lacking.[22] The defendant’s Vice President of Human Resources gave an affidavit stating that 210 employees were terminated over a two-year span, that 138 workers were employed in the past year, and the wage rate of employees in both groups. Unlike in Jimenez v. Allstate Ins. Co., opinion discussed above, the court found that the defendant could not simply assert what the plaintiffs’ wages were, even through the sworn testimony of a Vice President of Human Resources. Although the court did not explicitly fault the defendant for failing to produce its payroll records, the records would likely have helped, as the opinion frequently mentioned that the defendants failed to provide a basis for the calculations.

Some Lessons to Be Learned From Recent Cases

  • If possible, ensure that calculations of economic damages are statistically valid, because many other types of damages are derived from them.
  • The more specific information a defendant possesses, the higher the level of scrutiny a court may apply.
  • It is helpful to explain why any assumption made in calculating the amount in controversy is reasonable and necessary.
  • If a party is going to use an employee declaration to help establish the amount in controversy, it should be a management-level employee with knowledge of the subject matter or an employee with specific job responsibilities and education related to the declaration. Although some courts do not require parties to produce underlying business records, others do.
  • Notions of “common sense” differ, so do not assume that a court will use common sense. Instead lay out every step of the amount in controversy calculation.
    Whenever possible, use actual class member data. For example, use class members’ actual wage rates or the average wage rates of specific job types, instead of a blanket assertion of the class members’ average wage.
  • Don’t overlook memos, e-mails and other materials created by putative class members. They have immediate credibility and frequently are inconsistent with boiler-plate allegations in the Complaint.

Staying abreast of recent class action developments (through this newsletter and Baker Hostetler’s Employment Class Action Blog[23]) will allow parties the best chance to control the forum in which their cases will be decided.

[1] 28 U.S.C. § 1332(d)(2).

[2] Peralta v. Countrywide Home Loans, Inc., No. C 09-3288 PJH, 2009 U.S. Dist. LEXIS 112387 (N.D. Cal. Nov. 16, 2009).

[3] Descoteau v. Analogic Corp., No. 09-312-P-S, 2009 U.S. Dist. LEXIS 95361 (D. Me. Oct. 13, 2009).

[4] Jimenez v. Allstate Ins. Co., No. CV-10-8486 AHM, 2011 U.S. Dist. LEXIS 3327 (C.D. Cal. Jan. 7, 2011).

[5] Naiyan v. Sodezo, Inc., No. CV 10-9872 PSG, 2011 WL 1543371 (C.D. Cal. April 25, 2011).

[6] Labastida v. McNeil Technologies, Inc., No. 10-cv-1690-MMA CAB, 2010 WL 4868064 (S.D. Cal. Nov. 23, 2010).

[7] Blomberg v. Service Corp. Int’l., No. 11-8009, 2011 U.S. App. LEXIS 7681 (7th Cir. Apr. 14, 2011).

[8] Schudy v. Gordon, No. 06-00136-CV-W-DW, 2006 WL 859279, at *1 (W.D. Mo. Mar. 28, 2006) (in determining amount in controversy, the court found that the plaintiff’s refusal to stipulate “reinforce[d] the Court’s amount in controversy decision”); Pendergrass v. Time Ins. Co., No. 5:09-cv-00215-R, 2010 WL 989154, at *2 (W.D. Ky. Mar. 12, 2010).

[9] McGee v. Sentinel Offender Servs., LLC, No. CV-110-054, 2010 WL 4929951 (S.D. Ga. Nov 30, 2010).

[10] The authors understand that defendants may have tactical reasons for not explicitly quantifying potential damages due to the possible negative impact on the merits of the case.

[11] Castillo v. Apple Core Enters., Inc., No. 09-cv-1622 HRBB, 2009 WL 2849124 (S.D. Cal. Sept. 1, 2009).

[12] Nolan v. Kayo Oil Co., No. c-11-00707-mej, 2011 WL 2650973 (N.D. Cal. July 6, 2011).

[13] Munoz v. Cent. Parking Sys., Inc., No CV-10-6172 PA, 2010 WL 3432239 (C.D. Cal. Aug. 30, 2010).

[14] Dupre v. Gen. Motors Corp., No. CV-10-00955-RGK EX, 2010 WL 3447082 (C.D. Cal. Aug. 27, 2010).

[15] Ellis v. Pac. Bell Tel. Co., No. SACV 10-01141-CJC(FFMx), 2011 U.S. Dist. LEXIS 16045 (C.D. Cal. Feb. 10, 2011).

[16] Johnson v. U.S. Vision, Inc., No. 10-CV-0690 BEN CAB, 2010 WL 3154847 (S.D. Cal. Aug. 09, 2010).

[17] Johnson v. U.S. Vision, Inc., No. 11-55020, 2011 U.S. App. LEXIS 3698 at *2 (9th Cir. Feb. 9, 2011) (internal quotations omitted).

[18] Perez v. Del Monte Fresh Produce N.A., Inc., No. CV-09-1194-AC, 2010 WL 1406390 (D. Or. Jan. 21, 2010).

[19] Hayrapetyan v. Am. Int’l Group, Inc., No. CV 10-1590 GAF, 2010 U.S. Dist. LEXIS 58144 (C.D. Cal. May 18, 2010).

[20] Id. at *7.

[21] Berniard v. Dow Chem. Co., No. 10-30497, 2010 U.S. App. LEXIS 16515 (5th Cir. Aug. 27, 2010).

[22] Jayme v. Checksmart Fin., LLC, No. 2:10-CV-01174-GEB, 2010 WL 2900333 (E.D. Cal. July 22, 2010).

[23] http://www.employmentclassactionreport.com/

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UPDATES FROM OUR EMPLOYMENT CLASS ACTION BLOG

Please visit Baker Hostetler’s Employment Class Action Blog. We created this blog to acquaint employers, clients and other interested parties with developing issues impacting employment class actions, including those involving employment discrimination, wage and hour, civil rights and benefits issues. Below are a few blog posts on these topics. Please feel to share information about our blog with your colleagues. The blog supplements our Class Actions Newsletter, which will continue to be published periodically.

Subscribe to Baker Hostetler’s Employment Class Action Blog

Supreme Court Rejects Federal Court Order Enjoining State Court Class Action

The United States Supreme Court held on June 16, 2011, that a federal court could not enjoin a state court from considering certification of a class unless it had previously denied certification under essentially the same standard AND the cases have the same parties. See Smith v. Bayer Corp.pdf, Case No. 09-1205 (June 16 2011). True, it’s not an employment case, but almost any Supreme Court decision regarding class actions is important and there is little question that it will apply in the employment context.

Franken-Bill Would Have a Monstrous Impact on Mandatory Arbitration Clause

In the wake of the Supreme Court’s April 27th decision in AT&T Mobility v. Concepcion.pdf, Senator Al Franken (D-Minn) and others re-introduced legislation (S.987, H.R. 1873.pdf) that would forbid pre-dispute mandatory arbitration agreements in employment, consumer or civil rights disputes.

Third Time Isn’t the Charm When Court Refuses to Grant Certification of a State Law Opt-Out Class

There’s a saying in Hollywood—“The last sequel is the one that doesn’t make any money.” Unfortunately for moviegoers, too often a franchise is exhausted beyond its foreseeable lifespan by a studio looking to cash in on characters one last time before the end, despite an audience’s waning interest in the series. Thus, instead of having a nice, complete story that ends with the hero riding off into the sunset, we find the characters dragged out and dusted off for one more round, and more often than not, that final sequel serves to end the series on a sour note. Such was the situation with Judge Hellerstein’s May 2, 2011, decision in Cortes v. Foot Locker, Inc.pdf, Case No. 1:06-cv-01046 (S.D.N.Y.).

A Win for Employers in California Class Action Split Shift Wage Dispute

A federal court in California recently held in a class action case that employers satisfy California’s split shift wage regulation if they pay their employees who work split shifts at least the minimum wage for the actual time spent working plus one additional hour at the minimum wage rate. (Galvez v. Federal Express Inc.pdf., No. 3:07-cv-02505 (N.D. Cal. April 28, 2011)).

When Does “Silence” Become “Implicit” Agreement? The Saga of Jock v. Sterling Jewelers, Inc.

A recent Second Circuit decision has renewed the debate over when silence in an arbitration agreement can form the basis for class proceeding. On July 1, a divided Second Circuit found that an arbitrator did not exceed her authority in ruling that an employment arbitration agreement that did not specifically address class proceedings “permitted the plaintiffs to proceed with their effort to certify a class in the arbitration proceeding.”


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