Ninth Circuit Upholds De-Certification of Exemption Class Action

Michael Marlo was a supervisor for UPS.  He filed a class action alleging violation of California wage and hour laws, based on alleged mis-classification of his position as "exempt."  The district court initially certified a class, but later "de-certified" it, holding that common issues did not predominate over individual issues.
Marlo's individual claim went to trial. A jury found in his favor on some of the claims (that he was mis-classified in certain roles), but that he was exempt when he held an "on-road" supervisor position.  After judgment, Marlo appealed the district court's de-certification of the class.

On appeal, the Ninth Circuit affirmed the district court.  The court found that the plaintiff failed to establish that common issues predominate. First, the court of appeals rejected the plaintiff's argument that UPS's "blanket" classification of a group of employees established common issues:

Marlo contends that he satisfied his burden of establishing predominance by submitting evidence of UPS’s centralized control, and uniform policies and procedures. But a blanket exemption policy “ ‘does not eliminate the need to make a factual determination as to whether class members are actually performing similar duties.’ ” In re Wells Fargo Home Mortg. Overtime Pay Litig., 571 F.3d 953, 959 (9th Cir. 2009) (citation omitted). Specifically, the existence of a policy classifying FTS as exempt from overtime-pay requirements does not necessarily establish that FTS were misclassified, because the policy may have accurately classified some employees and misclassified others.

Of special significance, the court of appeals found that individual issues predominated because the employees' exempt status must be measured on a work-week by work-week basis:

Nor, contrary to Marlo’s assertion, did the district court err in requiring a week-by-week determination of exempt status. IWC Wage Order No. 9 states that in determining whether an employee is “primarily engaged” in exempt work, “[t]he work actually performed by the employee during the course of the workweek must, first and foremost, be examined and the amount of time the employee spends on such work . . .shall be considered.” Cal. Code Regs. tit. 8, § 11090(1)(A)(1)(e). California courts have construed this requirement to mean that “[u]nder California law, the Court must determine whether any given class members (or all the class members) spend more than 51% of their time on managerial tasks in any given workweek.” Dunbar v. Albertson’s, Inc., 47 Cal. Rptr.3d 83, 86 (Cal. Ct. App. 2006) (emphasis added). Therefore, the district court did not incorrectly apply California law by requiring a week-by-week showing of work the FTS actually performed.

The case is Marlo v. UPS, Inc. and the opinion is here.