NINTH CIRCUIT’S DENIAL OF CLASS CERTIFICATION DEMONSTRATES “EVIDENCE HIERARCHY” IN MISTAKEN-CLASSIFICATION CONTEXT

A recent decision by the Ninth Circuit, affirming denial of class certification on mistaken-classification claims illustrates an emerging hierarchy of evidence in the class certification context.  Delodder v. Aerotek, Inc., No. 10-56755, 2012 WL 862819 (9th Cir.Mar. 15, 2012).

The competing evidence and district-court decision

Defendant, an international staffing company with 150 offices worldwide, operates 20 offices in California.  Each office is run by a Director of Business Operations (“DBO”).  The DBO supervises Account Managers (“AMs”), who in turn supervise Recruiters.  New Recruiters start with the title “Recruiter Trainee,” are paid hourly, and generally receive 13 weeks of training before promotion to Recruiter, a salaried (exempt) position.  Delodder v. Aerotek, Inc., et al.,2:08-cv-06044-DMG-AGR, Doc. No. 182 (C.D.Cal.Aug. 16, 2010).

The plaintiffs challenged this classification under California law and sought Rule 23 class certification, relying on the following evidence to argue that liability could be determined through common proof:  (1) a uniform job description; (2) uniform training; (3) uniform classification; and (4) centralized corporate policies and procedures which, according to the plaintiffs, limited the discretion of the class and dictated uniformity in the actual performance of job duties.  The district court rejected the plaintiffs’ argument that corporate policies prevented material variations in the actual performance of job duties.  According to the district court, the declarations and deposition testimony demonstrated that Recruiters varied in their approaches to recruiting candidates, as well as their reliance on company policies and resources.  The district court concluded that individual questions about duties, such as the level of discretion exercised, would thus predominate.  The Ninth Circuit affirmed, and its decision reflects a hierarchy in the quality of evidence it found persuasive in the mistaken-classification context.

Evidence hierarchy

As the district court noted in its analysis of Rule 23(b)(3)’s predominance requirement, “[r]ecent case law in this circuit suggests a rough hierarchy of the types of evidence that are, as a general matter, useful to a predominance analysis in exemption cases such as this one.”  Id. at 25.  The district court described the hierarchy as follows:

  • “At the bottom are company policies declaring that a certain job title is uniformly exempt or non-exempt.”
  • “Higher up are ‘comprehensive uniform policies detailing the job duties and responsibilities of employees.’  [Wells Fargo, 571 F.3d] at 958.  These ‘carry great weight for certification purposes’ because ‘[s]uch centralized rules, to the extent they reflect the realities of the workplace, suggest a uniformity among employees that is susceptible to common proof,’ Id. at 958-59; see also Vinole, 571 F.3d at 947 (discussing the importance of ‘companywide policies governing how employees spend their time.’)”
  • “No less important is evidence bearing directly on the Court’s ‘need to make a factual determination as to whether class members are actually performing similar duties,’….”

Id. at 25 (emphasis added).  Presumably, this third category of evidence includes testimony from putative class members and their supervisors about what their duties are and how such duties are carried out.

While the district court’s hierarchy suggests that evidence regarding uniform policies and procedures about job duties is on equal footing with evidence regarding actual work performance, its qualifying language (in bold above) demonstrates a primary emphasis on the latter.  As the district court further clarified, uniform policies and procedures may “suggest a uniform set of expectations for Recruiters on the part of Aerotek and a level of commonality across the putative class.  But the touchstone of an exemption analysis is the reality of the workplace and the way in which employees actually spend their time….”  Id. at 31.

On appeal, the Ninth Circuit agreed.  The plaintiffs argued that the district court failed to properly consider the evidence regarding uniform training and company policies, and gave too much weight to testimony that actual work activities varied from Recruiter to Recruiter.  The Ninth Circuit disagreed, emphasizing the importance of “work activity evidence” over other forms of evidence, including uniform policies and procedures:

Evidence of corporate policies and training programs are relevant to [class certification], but are not dispositive, for the obvious reason that training and policies may not reflect what the class members actually do.  In this case, the district court properly considered both evidence of uniform policies and evidence of diverse work activities.  The work activity evidence was important because it showed variations in recruiters’ candidate sourcing techniques, interview styles, authority to recommend candidates, and relationship with supervisors, all of which were relevant to the Administrative Exemption factors [under California law].

 Id. at *1.

Conclusion

In the mistaken-classification context, evidentiary battles often pit witness testimony against company policies and procedures.  This recent decision by the Ninth Circuit highlights an emerging hierarchy in the sufficiency of certification – relevant evidence.  While corporate policies (such as job descriptions identifying job duties) are relevant to the predominance inquiry of whether the proper classification of the putative class can be established through common proof, those policies must match reality.  Variations in the actual performance of duties – to the extent such variations impact conditions for exempt status – will prevent the use of the class-action device to resolve wage and hour disputes premised on mistaken classification.   

Ashe Rafuse & Hill

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