California Labor and Employment Defense Blog

Motion To Strike Class Certification Allegations Upheld By Appellate Court

Three Plaintiffs filed two separate class actions against AZ3, Inc., doing business as BCBG Maxazria (BCBG), on behalf of all managers and assistant managers in BCBG’s California stores. The complaints alleged causes of action for failure to pay overtime compensation (Lab. Code, §§ 1194, 1197) and disgorgement of unpaid wages (Bus. & Prof. Code, § 17200 et seq.). The three Plaintiffs filed a coordinated complaint against BCBG in March 2005.

The coordinated complaint sought to recover overtime for all managers and assistant managers on the basis that they were misclassified as “exempt” employees. The plaintiffs alleged that BCBG had a policy of operating stores to minimize employee overtime, which resulted in the managers and assistant managers working over forty hours per week and “spend over fifty percent of their working hours performing the duties delegated to non-exempt employees.”

In a “preemptive strike” against the Plaintiffs, BCBG filed a motion to strike the class action allegations from the complaint alleging that the purported class was not amendable to class treatment. This motion was filed in January 2007, before Plaintiffs filed their motion for class certification.

In support of the motion to strike the class action allegations, BCBG explained the nature of its business as:
an haute couture design house for French-American styled women’s clothing. . . . In California, BCBG has maintained approximately 32 business locations with a variety of differing operating scenarios – for instance, some boutiques are small, stand-alone shops, others are large destination locations; some other[s] are small outlet/discount locations, while others are large (even multi-level) locations in malls; still others are incorporated as part of outdoor shopping plazas.
BCBG also noted the differences between the 32 locations: the stores do not carry the same merchandise; stores each have different target markets, requiring different marketing efforts; and the staffing and hours of operation differ from store-to-store. BCBG submitted declarations of 25 current or former managers and assistant managers from various California stores supporting its contention that managers are not assigned uniform duties and spend more than 50 percent of their time on non-managerial work.

The Plaintiffs opposed the motion, contending it was an improper attempt to circumvent the class certification process. The trial court granted BCBG’s motion to strike the class action allegations from the complaint, which prevented Plaintiffs' from continuing with the case as a class action.  Plaintiff’s appealed the trial court’s ruling.

In holding that BCBG’s motion to strike the class allegations was proper, the appellate court noted that any party can file a motion for class certification, and that trial courts should determine whether the action should be maintained as a class action “[a]t an early practicable time after a person sues or is sued as a class representative….” (citing Federal Rules Civ. Proc. Rule 23 (c)(1).)

The Plaintiffs’ argued that the motion to strike was premature, and that they did not have enough time to conduct adequate discovery into whether the class issues. The appellate court disagreed:
BCBG’s motion was filed 22 months after the filing of Plaintiffs’ coordinated complaint, 33 months after Denkinger’s complaint, and four years after Williams and Thornhill’s complaint. During the time between the filing of the coordinated complaint and the motion, Plaintiffs had, as Deckinger puts it, been engaged in “an extensive law and motion battle regarding the identity of members of the putative class and the declarations filed in support of Respondent’s Motion . . . .”
BCBG evidently was contacting former and current putative class members to have them sign an optout agreement from the class action. The Plaintiffs’ argued that this was unfair, as they did not have the names and telephone numbers for the putative class members and, therefore, could not contact the same people. The appellate court did not give Plaintiffs' argument any merit:
Plaintiffs did not have contact information for the putative class members and had been unsuccessful in discovery attempts to obtain it from BCBG. Plaintiffs suspected that BCBG might be giving the putative class members misinformation to induce them to settle their potential claims. The [trial] court remarked, “[T]his is frankly when a class rep ought to be out there dialing for dollars, talk[ing] to their friends and former employees, . . . and saying what’s going on out there, what have you heard. And that’s the kind of investigative work that would really, to me, make a class rep worth their weight in gold.”
The opinion, In re BCBG Overtime Cases, can downloaded from the court's website in Word or PDF.
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