18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 387 periods, the Court of Appeal looked to the plain text of § 512 of the California Labor Code and Wage Order No. 4, neither of which prohibited rounding. On Plaintiff’s further appeal, the Supreme Court of California reversed the Court of Appeal’s judgement affirming the trial court’s grant of summary adjudication in Defendant’s favor. First, the Supreme Court held that employers cannot engage in the practice of rounding time punches in the meal period context. The Supreme Court reasoned that the meal period provisions are designed to prevent even minor infringements on meal period requirements, and rounding was incompatible with that objective. Second, the Supreme Court held that time records showing non-compliant meal periods raised a rebuttable presumption of meal period violations, including at the summary judgment stage. Accordingly, the Supreme Court reversed the Court of Appeal’s judgment and remanded the matter to permit either party to bring a new summary adjudication motion as to the meal period claim. Marzec, et al. v. California Public Employees System, 2021 Cal. App. Unpub. LEXIS 2818 (Cal. App. 2d Dist. April 29, 2021). Plaintiffs, a group of former police officers and firefighters employed by local public agencies that provide employee retirement benefits through California’s Public Employees’ Retirement System (“CalPERS”), brought a putative class action alleging various claims, including claims of breach of contract and recession. In order to enhance their service retirement benefits, Plaintiffs purchased additional years of service credit through one of several optional programs offered by CalPERS. Subsequently, each Plaintiff was disabled on the job and took an industrial disability retirement before reaching service retirement age. As a result, CalPERS paid each Plaintiff a monthly disability retirement allowance of 50% of his or her final compensation. CalPERS did not, however, pay Plaintiffs any additional allowance as a result of their purchase of additional years of service credit based on Marzec v. Public Employees ’ Retirement System, 236 Cal. App. 4th 889, 895 (2015)(“ Marzec I ”). In Marzec I, the California Court of Appeal concluded that the parties’ contracts did not entitle Plaintiffs to the additional retirement benefits that they sought and upheld the trial court’s dismissal of the majority of Plaintiffs’ claims. Nevertheless, Marzec I reversed as to Plaintiffs’ cause of action for rescission. On remand, Plaintiffs moved for class certification on the rescission cause of action, and the trial court denied the motion. Among its reasons for denying certification was that the trial court found that there was not a well- defined community of interest, primarily because individual questions predominated over common questions. In particular, notwithstanding CalPERS’s status as Plaintiffs’ fiduciary, the trial court concluded that individual issues predominated because CalPERS had the right to rebut the presumption of reliance and had demonstrated how it might do so. In addition, the trial court was concerned that in light of the number of people who spoke to CalPERS about their retirement, oral disclosures varied across the class. The trial court also noted that there would be individual inquiries concerning CalPERS’s statute of limitations defense. Finally, the trial court held that Plaintiffs had not demonstrated superiority of class treatment. The trial court concluded that individual issues rendered the case unmanageable, and that Plaintiffs had presented no reasonable trial plan to address that issue. Further, because the proposed class members had spent an average of $83,000 on service credit, the trial court concluded that class members had a strong incentive to pursue their claims individually. On Plaintiffs’ appeal challenging the trial court’s denial of their motion for certification, the Court of Appeal affirmed the trial court’s order. The Court of Appeal agreed with the trial court that the individual issues in this case rendered it unmanageable as a class action. Moreover even without accounting for defense evidence or individual questions, the Court of Appeal agreed with the trial court’s conclusion that Plaintiffs had failed to propose a reasonable trial plan to show how the claims could be handled on a class-wide basis. Accordingly, the Court of Appeal held that Plaintiffs had not established that a class action would be superior to individual lawsuits, and therefore it affirmed the trial court’s order denying Plaintiffs’ motion for class certification. UFCW & Employee Benefits Trust, et al. v. Sutter Health , Case No. CGC-14-538451 (Cal. Super. Ct. March 9, 2021). Plaintiffs filed a class action alleging that Defendant violated California law by engaging in certain anti-competitive practices. The parties entered a class-wide settlement agreement providing monetary and injunctive relief. Plaintiffs filed a motion for preliminary settlement approval. Thereafter, the Court’s ruling on the motion was delayed due to the COVID-19 pandemic. Defendant subsequently filed a motion requesting the Court to delay resolution of preliminary approval so that Defendant could have the benefit of more information about how its future operations would unfold under the pandemic before it decided whether or not to oppose approval of the settlement. The Court denied Defendant’s request. Plaintiffs thereafter submitted a renewed motion with supplemental submissions in support of the preliminary settlement motion. The Court granted the renewed motion for preliminary settlement approval. Under the terms of the settlement, Defendant agreed to pay