California Labor &
Employment Law Blog
Jul 3, 2012

Court Denies Class Certification in Independent Contractor Misclassification Case

Topics: Class Actions, Court Decisions, Wage & Hour Issues

This week a California court held that class certification was properly denied in a wage and hour case alleging an employer misclassified its employees as independent contractors and failed to pay overtime or provide meal and rest breaks.  The defendants in the case were newspaper publishers who hired workers as independent contractors to insert advertisements into newspapers and to bag and deliver newspapers to customers.   The lawsuit alleged that the defendants intentionally misclassified the workers as independent contractors to avoid wage and hour obligations to these workers, including payment of overtime, provision of meal and rest breaks, and indemnification for business expenses.  The workers sought to have the case certified as a class action, but the trial court denied the motion on the grounds that the class was not sufficiently ascertainable and individualized issues predominated over common issues.  The workers appealed the ruling, but were unsuccessful on appeal.  In affirming the ruling of the trial court, the appellate court agreed that the class was not ascertainable and that substantial evidence supported the trial court's finding that individual issues predominated.  On the ascertainability issue, the evidence showed that the defendant newspapers had contracts with some 5,000 entities to do the stuffing and delivery work, but those entities themselves subcontracted with various other individuals to do the work and the defendant employers had no records from which the universe of workers (or size of proposed class) could be ascertained.  In trying to save class certification, the plaintiffs argued that the class definition could be revised to limit the class to the 5,000 workers who were identifiable based on the defendants' records.  The appellate court agreed with this point, but held that class certification was still improper based on the predominance of individual issues.  More specifically, the court held that the plaintiffs had not presented sufficient evidence to demonstrate that a uniform policy or practice existed with respect to entitlement to or failure to provide overtime or meal and rest breaks.  Additionally, the court held that the trial court was within its discretion in finding that indivdiual issues predominated on whether the workers were properly classified as independent contractors as opposed to employees.  The case is Sotelo v. Medianews Group, Inc.

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For over 25 years, CDF has distinguished itself as one of the top employment, labor and immigration firms in California, representing employers in single-plaintiff and class action lawsuits and advising employers on related legal compliance and risk avoidance. We cover the state, with five locations from Sacramento to San Diego.

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About the Editor

Robin Largent has a regular presence in California state and federal courts and has been lead defense counsel and appellate counsel for large and small California employers in litigation (and arbitration) ranging from individual discrimination and harassment claims to complex wage and hour representative and class actions. She also leads the firm’s appellate practice, having substantial experience and success handling appeals, writ petitions, and amicus briefs in both state and federal court on issues such as class certification (particularly in the wage and hour arena), manageability and due process concerns associated with class action trials, exempt/non-exempt misclassification issues, meal and rest break compliance, trade secret/unfair competition matters, and the scope of federal court jurisdiction under the Class Action Fairness Act.
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