As promised, here is an update on the misclassification class action case we highlighted back on March 12, 2014. As you might recall, the case was Duran v. U.S. Bank (2012) 275 P. 3d 1266 in which loan officers sued U.S. Bank alleging they were misclassified as exempt employees and were entitled to overtime pay. Last Thursday, the Supreme Court issued its decision.
The main issue in the case revolved around whether statistical sampling was available to prove misclassification liability on behalf of a defendant. In the decision, the California Supreme Court left the proverbial “door” open to allow statistical sampling to prove liability.
In leaving open the possibility for using statistical sampling to prove liability in misclassification cases, the Court stated, “We need not reach a sweeping conclusion as to whether or when sampling should be available as a tool for proving liability in a class action.” To this point, the Court admitted that statistical sampling may provide an appropriate means of proving liability and damages in some wage and hour class actions.
However, the Court did outline several considerations before employing statistical methods to prove liability.
First, the Court noted that any class action trial plan, including those involving statistical methods of proof, must allow a defendant to litigate its affirmative defenses.
Second, the Court recognized that classifying employees as exempt or non-exempt often turn on “thorny” questions of how individual employees perform their jobs. Where the defense depends on questions regarding individual class members, any statistical model used must be designed to accommodate these case-specific deviations. If the statistical methods used to prove liability are incompatible with the nature of the plaintiffs’ claims or the defendant’s defenses, statistical proof may not be appropriate.
Third, if statistical evidence will comprise part of the proof on class action claims, trial courts should consider at the certification stage whether a trial plan has been developed to address its use. The Court highlighted this point, stating, “[T]rial courts would be well advised to obtain such a plan before deciding to certify a class action.”
The preceding considerations aside, the main takeaway from Duran is this: Statistical analysis provides another avenue to class counsel for proving liability in employment misclassification cases.