In a likely win for the firm, the 9th Circuit on December 5, 2013 seemed poised to reverse a lower court ruling denying class certification where plaintiff was given no opportunity to conduct discovery. Listen to the argument here. It could be several months before they render a decision. The case was Joseph Perez v. Safelite Group, Inc.
As 2013 draws to a close a couple of thoughts about the coming year and the direction of California law in general. What do we expect to see in 2014 and what trends are we continuing to see?
California Law Cases
In terms of cases, the big case out there in California continues to be Iskanian. The future of class arbitration and/or PAGA is of utmost importance to plaintiff side wage and hour practitioners. It seems probable that we will see an opinion on Iskanian in 2014 but you never know the speed at which the California Supreme Court will move. The other California Supreme Court case to watch is Duran. That case focuses on the requirements of class certification. Specifically what sort of statistical sampling may or may not be allowed in the certification analysis. This is a tricky issue that should offer some surprises. Again, an opinion should be
In May, the California Labor Commissioner released the State of the Division Labor Standards Enforcement Report, which includes the Labor Division’s wage violations enforcement activity for 2011 and 2012. The results are not encouraging in California.
Here’s a look at the highlights for 2012:
- Over $3 million were assessment for unpaid minimum wage violations, a 462% increase over 2010 assessments.
- Over $13 million were assessed for unpaid overtime wage violations, a 642% increase over 2010 assessments.
- Over $51 million in civil penalties were collected from employers violating labor laws, a 150% increase over 2010.
The Labor Division will
Class Action releases are the most difficult part of a settlement. Once the number is reached the parties assume that the rest of the agreement will fall into place. In conventional litigation that’s usually true, but class litigation has many more moving parts that can create impasses. There are some serious pitfalls that parties should be prepared to address up front and anticipate before they put an end to your settlement.
The first issue to consider is the WHO (Who is going to be released?). While on the surface this seems self-evident its not as straightforward as it may seem.
How much is allocated to the State of California in PAGA claims? In a recent case handled by Kingsley & Kingsley, a case settled for $1,500,000 and over $400,000 of the claim was allocated to PAGA (Private Attorney General Act). The PAGA claim pursuant to statute has to allocate 75% of the proceeds or over $300,000 to the Labor Workforce Development Agency, a branch of the State of California. This was a very large amount, but the nature of the claim was such that a large portion of the exposure flowed through the PAGA exposure, as such it seemed appropriate to allocate the dollars in this way. Have other plaintiff’s firms paid such large amounts or even greater amounts to the state? As PAGA claims become a new reality in light of Brown v. Ralph’s and a hopeful reversal in Iskanian v. CLS, plaintiff’s firms may be forced to allocated 100% of the funds to PAGA which could mean some large checks to the state. In such cases, the plaintiff’s bar will become what the law intended, private attorney generals working for the State of California. In the past many cases settled with token amounts being allocated to PAGA, there may be change here and there is very little data to compare these settlements to which creates difficulties on both sides in evaluating the likely results if the cases go to trial. Our perception is the defense bar has not caught up with the fear of PAGA and some big verdicts will need to come down before companies begin taking PAGA penalties seriously. I expect that in the next couple years we will begin to see some of those verdicts play out.
In a follow up to Governor Brown’s recent signing of AB 10 to raise California’s minimum wage to $9 per hour starring January 1st, New York State appears to have reached a tentative deal in the state legislature and with Governor Cuomo to raise New York State’s minimum wage to $8 per hour on January 1. In 2015 New York will be raise the wage again to $8.75, only a quarter behind California’s, but in 2016 California will go double digits to $10 per hour whereas New York will only climb to $9 per hour. With the cost of living in New York City they can do even better, but as of 2009, New York like many red states had a minimum wage the same as