Supreme Court Vacates Key Seventh Circuit Wage and Hour Class Certification Decision For Further Consideration in Light of Comcast
By Bill Allen
Less than one week after issuing its decision in Comcast Corp. v. Behrend, 2013 U.S. LEXIS 2544 (Mar. 27, 2013), the Supreme Court granted a writ of certiorari in Ross v. RBS Citizens, N.A., 667 F.3d 900 (7th Cir. 2012), vacated the Seventh Circuit’s decision, and remanded the case for further consideration in light of Comcast. The Court’s action may have a significant impact on class action wage and hour law, as Ross has been frequently cited by wage and hour class action plaintiffs to limit the reach of the Supreme Court’s landmark class certification ruling in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. __, 131 S. Ct. 2541 (2011).
In Ross, the Seventh Circuit affirmed the district court’s pre-Dukes certification of a class of hourly bank employees who alleged off-the-clock work and a class of assistant branch managers who alleged they were misclassified as exempt. The court of appeals found that the Supreme Court’s discussion of the Rule 23(a)(2) commonality standard in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. __, 131 S. Ct. 2541 (2011), a gender discrimination class action, did not change the commonality analysis in the case. Specifically, the Seventh Circuit distinguished Dukes as a case requiring individual inquiry into the discriminatory intent of thousands of managers, whereas it found that plaintiffs’ assertion of an “unofficial policy” of not paying for all time worked was susceptible to a “common answer that potentially drives the resolution of this litigation.” With respect to the exemption claims, the Seventh Circuit stated that “an individualized assessment of each [class member’s] job duties is not relevant to a claim that an unlawful company-wide policy exists to deny [class members] overtime pay.” Finally, the Seventh Circuit rejected the company’s argument that, in accordance with Dukes, it was entitled to present individualized affirmative defenses to the exemption claims, reasoning that Dukes only applied to claims for equitable relief under Rule 23(b)(2) and not claims for monetary relief under Rule 23(b)(3).
The employer sought a writ of certiorari on the following two questions: (1) Whether it was consistent with Dukes to hold that a defendant in a Rule 23(b)(3) class action has no right to raise statutory affirmative defenses on an individual basis if the class seeks only monetary relief; and (2) whether the Rule 23(a)(2) commonality standard is satisfied when a class claims the denial of overtime pay, without resolving whether dissimilarities in the class would preclude it from establishing liability on a class-wide basis.
Because the Seventh Circuit’s Ross decision did not expressly discuss the common proof of damages as an aspect of class acertification, it is unclear how Comcast will be applied on remand. However, the district court concluded that individualized damages issues were generally not relevant to certification decisions, stating: “Courts have not traditionally found individualized questions of damages to prevent class certification.” After Comcast, that may no longer be true.
The Department of Labor’s Wage and Hour Division (WHD) is seeking public comments on the agency’s proposal to collect information “about employment experiences and workers’ knowledge of basic employment laws and rules so as to better understand employees’ experience with worker misclassification.” According to a notice published in the January 11, 2013 edition of the Federal Register, the proposed Worker Classification Survey is intended to “provide critical information to Department policymakers on whether workers have knowledge of their employment classification and whether they understand the implications of their classification status.” A copy of the proposal can be obtained by contacting Karen Livingston, the WHD’s director of the Division of Strategic Planning and Performance, at (202) 693-0023.