18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 237 covered by the Ward test only need to perform some of their work in-state and be based for work purposes in California, and the fact that most of the employees’ work was performed outside of California did not render regulation of their employment relationship with Defendant violative of the dormant commerce clause. Secondly, the Ninth Circuit held that Defendant did not show that the Ward test regulated an area that required national uniformity, or that the cost of compliance otherwise impaired the free flow of goods or services across state borders, and it did not show a significant burden on interstate commerce. Finally, the Ninth Circuit concluded that in assessing whether the employees should prevail on the merits of their claims, the District Courts on remand would need to examine the wage statements that they received to in order to determine if the wage statements complied with the requirements of § 226. For these reasons, the Ninth Circuit reversed and remanded the entry of summary judgment in favor of Defendant. Williams, et al. v. Costco Wholesale Corp., 2021 U.S. App. LEXIS 32387 (9th Cir. Oct. 29, 2021). Plaintiff, a worker hired by Defendant to provide sales demonstrations in its retail stores, filed a class and collective action alleging that Defendant failed to pay overtime compensation in violation of the FLSA and the California Labor Code (“CLC”). The District Court granted Defendant’s motion for summary judgment on the basis that Plaintiff failed to establish that her work doing “road shows” to sell Nichols and Flair’s products at Defendant’s store locations fell within Defendant’s "usual course of business" under the CLC. Id . at *2. On appeal, the Ninth Circuit affirmed the District Court’s ruling. In support of its motion, Defendant presented declarations showing that road shows were discrete events that accounted for less than 0.5% of Defendant’s warehouse sales in California; and operated through a different economic model than Defendant’s other lines of business. Id . While most of Defendant’s products were purchased in bulk and resold to customers, road show merchandise was sold on consignment by sales representatives engaged by the supplier. Id . Plaintiff argued that Defendant’s usual course of business was "demonstrating and selling merchandise to Costco customers” such that it was liable for the alleged violations of the CLC. Plaintiff further asserted that even though she was hired by Nicholas and Flair to sell its products, Defendant was liable as well because it exercised control over her work, including imposing dress code guidelines and requiring her to maintain a staffed product booth at all times. The Ninth Circuit ruled that the District Court correctly found that Defendant was not Plaintiff’s employer, as it did not control her wages, hours, or working conditions. The Ninth Circuit reasoned that the evidence showed that Nichols and Flair hired and paid Plaintiff, scheduled her work on particular road shows, set the length of her shifts, trained her, and set her sales targets. Id . at *3-4. The Ninth Circuit also held that the District Court correctly found that Defendant did not "suffer or permit" Plaintiff to work, because Nichols and Flair indisputably retained the exclusive contractual power to fire Plaintiff, and her evidence did not raise a triable issue as to whether Defendant had the practical authority to cause her to be fired. Id . at *4. For these reasons, the Ninth Circuit affirmed the District Court’s ruling granting Defendant’s motion for summary judgment. Wilson, et al. v. Skywest Airlines, Inc., 2021 U.S. Dist. LEXIS 129507 (N.D. Cal. July 12, 2021). Plaintiffs, two California-based flight attendants, filed a class action alleging Defendant violated various provisions of the California Labor Code when it failed to provide meal breaks, rest breaks, and proper wage statements. Following discovery, Defendant moved for summary judgment as to all claims, and Plaintiffs moved for partial summary judgment on the issue of liability. The Court granted in part and denied in part both motions. The Court determined that applying California’s meal break, rest break, and wage statement laws to Defendant’s California-based flight attendants did not violate the dormant commerce clause of the U.S. Constitution. The Court reasoned that employers frequently have interstate workforces that require them to navigate and comply with different state laws. Further, any burden to Defendant was greatly reduced by the options available to it for complying with the meal and rest break requirements, as California law expressly permits employers to seek exemptions from the rest break requirements if compliance "would not materially affect the welfare or comfort of employees and would work an undue hardship on the employer." Id . at *8. Accordingly, the Court denied Defendant’s motion and granted Plaintiffs’ motion as to meal and rest break violations. In addition, the Court noted that even assuming, without deciding, that Defendant’s wage statements did not comply with California law, Plaintiffs’ wage statement claim under § 226 must fail because any violations were not "knowing and intentional." Id. at *10. The Court found that at the time it issued the wage statements, Defendant had a good faith belief that it was not violating California law based on decisions that the dormant commerce clause precluded applying California labor laws to interstate airline workers. Accordingly, the Court granted Defendant’s