Appellate Court Afirms $187 Million Verdict Against Wal-Mart In Meal And Rest Period Case

By Christopher S. Andre and Scott K. Dauscher

MSNBC reports today that a Pennsylvania appellate court affirmed a $187.6 Million verdict against Wal-Mart Stores, Inc., in a class action lawsuit for allegedly denying hourly employees meal and rest breaks.  Although the appellate court affirmed the damages verdict, it did order the trial court to recalculate the $45.6 Million award of attorneys fees to the employees' attorneys, indicating the trial court erred by "double-counting" some factors when calculating the attorney's fees award. Click here to read the story. 

Meal and rest period cases continue to be a significant source of potential exposure for employers large and small.  Employers concerned about such potential exposure should consider consulting experienced employment law counsel about strategies for reducing potential meal and rest period liability.  Among other things, having in place appropriate written meal and rest period policies and documenting the company's adherence to those policies is often the best defense to meal and rest period claims. 

Divided 9th Circuit Court of Appeals Approves Largest Class Action in History

By Christopher S. Andre and Scott K. Dauscher

On April 26, 2010, in Dukes v. Wal-Mart Stores, Inc., a divided Ninth Circuit Court of Appeals decided 6-5 en banc to affirm the decision of the trial court to grant class certification in a discrimination lawsuit alleging Wal-Mart Stores discriminates against its women employees. The nationwide class is reputed by the Los Angeles Daily Journal to number upward of 1.6 million women employees, which would make the class the largest class in United States history.

In 2001, the Impact Fund, a Berkley, California based organization many plaintiff's attorneys donate money to, filed on behalf of Betty Dukes and other current or former employees of Wal-Mart a lawsuit alleging Wal-Mart discriminates against its women employees regarding promotions and pay practices in violation of Title VII of the Civil Rights Act of 1964.

The trial court later certified a class consisting of "all women employed by Wal-Mart at any time after December 26, 1998."

On Appeal, the Ninth Circuit Court of Appeals affirmed the trial court's grant of class certification but remanded to the trial court for further consideration the issue of whether to certify for class treatment the plaintiffs' claims for punitive damages and the issue of whether to certify an additional class or classes consisting of women who were no longer employed by Wal-Mart when the lawsuit was filed.

One of the key issues in any motion for class certification is whether common issues of law and fact predominate over individualized issues of law or fact. Based on our initial review of the decision, we think the following succinct dissent by Chief Judge Alex Kozinski is apt:

Maybe there'd be no difference between 500 employees and 500,000 employees if they all had similar jobs, worked at the same half-billion square foot store and were supervised by teh same managers. But the half-million members of the majority's approved class held a multitude of jobs, at different levels of Wal-Mart's hierarchy, for variable lengths of time, in 3,400 stores, sprinkled across 50 states, with a kaleidoscope of supervisors (male and female), subject to a variety of regional policies that all differed depending on each class member's job, location and period of employment. Some thrived while others did poorly. They have little in common but their sex and this lawsuit.

We are continuing to analyze the lengthy 139 page opinion and will update this blog once we have completed our analysis.

In the meantime, given the stakes involved and the issues involved, we think it is a virtual certainty that Wal-Mart Stores will petition the United States Supreme Court for review of the 9th Circuit's decision. Although review by the Supreme Court is discretionary, we think the Supreme Court would very likely be interested in this case given the importance of the issues not only to Wal-Mart Stores and its employees but to numerous other large employers and their employees. Further, the 9th Circuit Court of Appeals is not only the largest of the Circuit Courts of Appeal; it also the most frequently reversed Circuit Court of Appeals.

Click here to download and to read the opinion.

Bill Would Bring Welcome Reform To Class Action Litigation

By Christopher S. Andre and Scott K. Dauscher

For a number of years, California employers have been besieged by costly, time consuming class action lawsuits, which frequently take the form of suits alleging violation of California's wage and hour laws. Welcome reform may on the horizon.

On February 10, 2010, California Assembly Member Audra Strickland introduced Assembly Bill ABX8 38, a bill that would significantly reform California's class action procedures.

The bill presently includes a Legislative finding that "[t]he lack of clear standards for the certification and management of class actions in California has led to abuses of the class action devise that have harmed Class members with legitimate claims as well as defendants who have acted responsibly, and these abuses have undermined public respect for our judicial system."

Among other things, the bill would:

1. Create a uniform set of standards for the certification of class actions and management of class actions modeled after Rule 23 of the Federal Rules of Civil Procedure.

2. Remove "any presumption or policy in favor of class certification and allow class certification only when all requirements set forth" in the bill are satisfied.

3. When a class is certified, require that each member of the certified class carry "the burden of proving all elements of the member's cause of action, including individual injury and the amount of damages."

4. Require the proponents of a class to bear the expense of required notices.

5. Provide to defendants the opportunity to propose to the court a settlement not approved of by class counsel representing the plaintiff class (i.e., to remove class counsel as an obstacle to settlement).

6. Clarify that courts have discretion to stay discovery directly solely to the merits of the claims until a decision about class certification is made.

We will monitor this important piece of pending legislation and report on significant developments.

Click here to download and read the bill.