The California Supreme Court decision in Sav-On Drugstores v. Superior Court, 34 Cal. 4th 319 (2004), concerned many employers who feared that post-Sav-On courts would simply rubber-stamp class certification motions and employers would have no appellate recourse. However, the recent Court of Appeal decision in Dunbar v. Albertson’s may alleviate some of these concerns. In Dunbar, the trial court denied class certification and the Court of Appeal upheld this denial. Consequently, Dunbar is a significant decision because it shows that even in the wake of Sav-On, trial courts may still deny class certification decisions and such denials may still be upheld.
Sav-On was a landmark decision on wage and hour class actions in California. The Sav-On plaintiffs argued that they all performed the same duties and that the employer misclassified them as exempt by looking at all of their duties as a group. The Supreme Court decision upheld the trial court’s class certification and highlighted the deference appellate courts must give to trial court certification decisions. The Sav-On Court emphasized that appellate courts will not easily disturb trial court class certification rulings unless the trial court has relied on improper criteria or made erroneous legal assumptions.
On the one-hand, Dunbar deviates from Sav-On because the trial court denied class certification on a facially similar misclassification claim. The Dunbar plaintiff alleged that approximately 900 grocery managers were misclassified as exempt. However, in contrast to Sav-On, the Dunbar court held that the plaintiff had not articulated a theory susceptible of class treatment and denied class certification. The trial court concluded that the plaintiff did not satisfy the commonality or superiority requirements because individualized issues predominated: it would need to make individual inquiries for each of the 900 grocery managers because findings about one manager could not be reasonably extrapolated to apply to other grocery managers. Moreover, unlike Sav-On, the trial court noted that the plaintiff could not meet the commonality requirement by simply making reference to an employer’s common policy of treating a group of employees as exempt. On the other hand, the Dunbar court confirmed the deference appellate courts must give to class certification decisions, including denial of class certification.
Significantly, the Dunbar decision was initially not certified for publication when it was decided on July 20, 2006. However, thanks to lobbying from employers groups, including the work of Sheppard Mullin attorneys, the Court of Appeal published the decision on August 10, 2006, making the decision proper authority that can be cited and relied upon in other cases. While the Dunbar decision could signal a trend toward denial of class certification of wage and hour claims, it continues to be prudent for employers to ensure that employees are properly classified as exempt from the overtime requirements of state and federal law.