Overtime and Misclassification Class Actions

Here at Janssen Malloy LLP, we have handled overtime class actions on behalf of local workers, obtaining in excess of $1 million dollars for clients.  Currently, oral argument is being heard on a case that could have a tremendous impact on overtime and misclassification class actions that we are watching very closely.

The case is Duran v. U.S. Bank Nat. Assn., (2012) 275 P. 3d 1266 (granting cert.). One of the issues presented to the court is whether a statistical sample of class members may be used to prove class-wide liability in a wage and hour misclassification case.

The facts are pretty straightforward. The plaintiffs are a group of 260 U.S. Bank employees known as business banking officers (BBO).  The BBO’s are alleging that U.S. Bank has not paid them overtime for hours worked in excess of 40 hours per week. In its defense, U.S. Bank has alleged that the employees are “exempt” and not due overtime because these employees spend less than half their time working at a U.S. Bank branch or other bank property.  At trial, plaintiffs' offered the results of a survey of 21 of the 260 class members as proof that all of the employees named in the action worked less than half their hours away from U.S. Bank branches. The trial court accepted the survey as proof in finding liability on behalf of U.S. Bank. T he trial court found that the sampling was “random” enough to serve as the foundation for liability.

The appellate court reversed, finding that allowing the survey violated U.S. Bank’s due process rights and that the trial court did not properly review sworn testimony of other employees who stated they did work more than half their time outside a U.S. Bank branch.

The case is now before the Supreme Court, which heard oral arguments last week. The Court has hinted in oral argument that it is prepared to affirm the appellate court’s ruling that the sample was insufficient to justify a finding of liability.

Yet some important questions remain. Chief amongst them is whether statistical sampling in class actions involving overtime and misclassification of employment status can even provide a foundation for a finding of liability.

In the alternative, does due process and a proper foundation for showing liability as to all class members require testimony from each member of the class?

These and other questions could have a huge impact on certifying classes for actions involving wage and misclassification of employment depending on how the Court rules. Hopefully, these questions will be addressed in the next 90 days when the Court is due to reach its decision. We will follow up with full analysis after an opinion has been issued.

In the meantime, enjoy the sunshine!