Judge Certifies Abercrombie Class
September 17, 2004
Daily Journal
By Joy C. Shaw
A Los Angeles Superior Court judge Thursday certified a class action on behalf of 250 Abercrombie & Fitch employees in California who claim they were wrongly identified as managers so the popular clothing chain could deny them overtime pay.
Judge Kenneth R. Freeman on Tuesday made final his tentative Aug. 24 decision that grants past and present Abercrombie & Fitch managers a motion to certify their lawsuit for overtime pay.
The lawsuit alleges Abercrombie & Fitch misclassified all general managers and store managers working in its California stores as salaried, exempt workers, who don't qualify for overtime pay. The employees also allege that they spend more than half of their working hours helping customers, restocking, arranging shelves: the same duties that are performed by nonexempt workers.
California law exempts from overtime pay only professionals and workers who spend 50% of working hours in managerial duties. Kimbell v. Abercrombie & Fitch Stores Inc. BC277359 (L.A. Super Ct, filed July 10, 2002).
Freeman, without deciding whether the plaintiffs are eligible for overtime or the amount of overtime pay, ruled plaintiffs can file the lawsuit as a group because they face similar issues.
"Plaintiffs and Abercrombie's evidence supports plaintiff's viewpoint that the subject managers are so standardized and uniform that they may be misclassified as exempt and/or managers for that matter," Freeman said at an Aug. 24 hearing where he laid out his tentative ruling.
The judge, however, divided plaintiffs into subclasses based on the business volume in stores.
”It appears that the way to certify this action and not violate Abercrombie's due process rights, with regard to individually inquiring of each [general manager] or [store manager], would be to certify the class with the understanding that the sole purpose is to discover whether the [managers] were misclassified solely based upon the policies and procedures and control that Abercrombie exercised over the [managers] without placing so much emphasis on how each [manager] actually carried out their duties," Freeman said Aug. 24.
Attorneys representing the employees claimed victory in the two-year legal battle.
Class certification is "an absolutely necessary step" to the success of winning the case against employers, said John N. Quisenberry, an attorney representing the employees.
Charles F. Barker, an attorney at Sheppard Mullin in Los Angeles, and Mark A. Knueve, an attorney at Vorys, Sater, Seymour & Pease in Columbus, Ohio, both representing Abercrombie & Fitch, could not be reached.
A call to the clothing chain's New Albany, Ohio, headquarters was not returned.
Freeman's final ruling came on the heels of a closely watched state Supreme Court ruling that affirmed trial judges have broad discretion to certify class actions. Sav-On Drug Stores Inc. v. Superior Court, 2004 DJDAR 10627 (Cal. Aug. 26, 2004).
As in the case against Abercrombie, as many as 1,400 managers alleged that Sav-On stores classified them as salaried employees so the company wouldn't have to pay them overtime even though the bulk of their responsibilities were not managerial.
A panel of the 2nd District Court of Appeal in Los Angeles ruled in 2002 that there were not enough common facts behind each individual manager's claims to support a trial court's class certification. The high court concluded the appellate panel erred in second-guessing the trial judge.
Attorneys representing plaintiffs in wage and hour disputes deem the Sav-On decision a big step in forcing employers to change their practice on overtime policy.
"It was an extremely important decision because what employers have been doing is to say to the lawyers who brought the suits, 'Look, you will never get the class certified, so you might as well just go away or settle for a few pennies here,'" Quisenberry said. "It's a very different situation now that Abercrombie or any of these employers are now facing all of their employees.
"They got away with treating them as a class when they don't want to pay them overtime. It's only when they are sued on the basis of a class, the employer says, 'Wait a minute. you gotta look at each one individually even though we never did when we needed to pay them as exempt.'"
Ken Sulzer, attorney at Los Angeles' Seyfarth Shaw, which has defended more than 100 employers in similar labor disputes, said the Sav-On decision is important only in that it gives trial judges greater leeway.
”It simply gives the trial judge ... a lot of discretion," Sulzer said. "Will that cause more classes to be certified? I don't know. Judges that may tend to certify will certify more. Judges who tend to deny will deny more often."
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