Court Upholds Union-Sponsored Class Litigation as a Legitimate Organizing Tool
By John Anthony
On May 28, 2008, the Second Appellate District issued its decision in Sharp v. Next Entertainment, upholding a labor union's right to sponsor class action “wage and hour” litigation in support of its labor organizing efforts.
In Sharp, The Writers Guild of America (the Guild) had been attempting to organize employees in reality television. The Guild held meetings during which such employees discussed purported wage and hour violations. Some who participated in the meetings, along with other reality television employees, brought class action lawsuits against the production companies and the television networks (collectively defendants). The Guild sponsored the class action litigation by paying the costs and fees of the class counsel – the same law firm that also represented the Guild in its organizing efforts. The plaintiffs and the Guild both conceded that the purpose of the lawsuit was both to prevail in the litigation and as a tool to organize employees. Thereafter, the trial court denied defendants’ motion to disqualify the class counsel based on a conflict of interest between the putative class members and the Guild, finding that the Guild’s goal of organizing the defendants’ employees did not impermissibly conflict with the employees’ litigation claims.
The California Appellate Court for the Second District affirmed, finding that “[w]age and hour litigation is often financed by labor unions to support their members and members of the public because employees often lack the resources to do so. Such litigation is designed to protect all workers, including members of the union and non-union members.”
This case emphasizes the need for California employers to recognize that class litigation is frequently used by unions as an additional tool to organize employees and thus provides yet another reason to ensure that wage and hour policies are compliant with California law.