Employment Matters Blog

Second Circuit Court of Appeals Will Address Comcast’s Impact on Wage and Hour Class Action Lawsuits

Posted in class action, misclassification, New York, Second Circuit, Supreme Court, Wage and Hour

Written by Michael Arnold

What is the impact of the U.S. Supreme Court’s Comcast decision on wage and hour class action lawsuits? That is the question the Second Circuit Court of Appeals has agreed to hear on appeal.

As we previously reported, Comcast is the much talked about decision that the Supreme Court issued in March 2013 invalidating a certified class in an anti-trust matter in part because the plaintiffs could not show that damages were capable of measurement on a class-wide basis. The following month, and in light of its Comcast decision, but without any written analysis, the Supreme Court vacated and remanded a Seventh Circuit Court of Appeals decision (RBS Citizens N.A. v. Ross) that had previously certified an overtime class. The Comcast decision coupled with the Ross remand has left courts (and commentators) split over Comcast’s import.

Some view the Comcast decision as relatively non-controversial: If the plaintiffs can show that the employer damaged the proposed class in the same way (i.e. the employer did not pay them overtime because it misclassified them as overtime exempt), the Court, consistent with Comcast, should still grant class certification – even if the specific damage amounts vary from class member to class member (i.e. because each class member worked a different number of hours). This was the exact view the Ninth Circuit Court of Appeals took in a May 28, 2013 decision (Leyva v. Medline Indus., Inc.). Otherwise, the Ninth Circuit concluded, the very fact that each class member’s actual damage amounts may vary, even though each class member was damaged from the employer’s single act, would effectively sound the death knell of the wage and hour class action.

Others view the Comcast decision as significant: If the plaintiffs must rely on individualized proof to prove each class member’s damages (i.e. individualized proof regarding the number of overtime hours worked by each class member), even though each class member was damaged by the employer’s single act, then the court should deny class certification – so, yes, something like a possible death-knell of a plaintiff’s ability to certify a wage and hour class. This is the exact argument a Northern District of New York court adopted in Roach v. T.L. Cannon Corp. in denying class certification, the appeal of which the Second Circuit has now accepted. In Roach, even though the employer failed to factor “spread of hours pay” into the weekly wage calculation, the plaintiffs would have to rely on individualized proof to demonstrate entitlement to spread of hours pay on different shifts worked.

Still others take a middle of the road approach, concluding that a class can still be certified on liability if the plaintiffs can show that the employer damaged the proposed class in the same way (i.e. the previously-mentioned wholesale misclassification by the employer), while damages can be dealt with through separate, individualized showings by each plaintiff.  This is the approach a Southern District of New York court took in Jacob v. Duane Reade, Inc., where assistant store managers alleged Duane Reade misclassified them and therefore, should have paid them overtime. The Second Circuit agreed to hear the appeal of this case in tandem with the Roach case.

We will certainly be following this appeal closely and will report back once the Second Circuit issues its opinion.