Juries Hand Employers Class Action Wage and Hour Victories

Jury trials of employment class actions are rare.  If a case is certified, oftentimes the risk of going forward is simply too great for the employer, and it settles.  Three recent cases, however, reflect that in those few class action cases that are tried, a plaintiff's verdict is far from a certainty, particularly in the wage and hour arena.

Most recently, in Johnston v. The Rawlings Co.LLC, Case No. 08-0800 (Oldham Cty., Kentucky, Circuit Court), a class of 360 medical claims examiners sought $12 million arising out of their alleged misclassification as exempt employees.  Following a 3-week trial in Kentucky state court, the jury returned a defense verdict on May 27, 2011.

One day earlier, in Lopaz v. Tyson Foods, Inc., Case No. 8:06-CV-459 (D. Neb), a class of hourly meat processing employees contended that they were not properly paid for all hours of work.  They specifically challenged a "gang time" system used by the employer that they claimed deprived them of pay for donning and doffing, sanitizing equipment, and similar duties.  On May 26, a federal jury returned a verdict in favor of the employer.  What makes this case especially interesting is that the employer had previously lost such a case in Kansas earlier in 2011 and had settled a similar case with the United States Department of Labor.  Further, the attorneys for the plaintiffs had previously recovered a $32 million verdict in a wage and hour case against Family Dollar Store.

Earlier this year, in Henry v. Quicken Loans (E.D. Mich), a group of mortgage loan officers brought suit against Quicken Loans, contending that they were misclassified as administrative exempt employees and were owed overtime.  They argued, essentially, that they were actually salespeople, and lacked any significant discretionary authority.  They also relied on a 2010 U.S. Department of Labor interpretation that stated that such employees most likely were not administratively exempt.  Following a four-week trial, the jury returned a defense verdict on March 14, 2011, and also returned jury interrogatories reflecting its finding that the employees performed duties that were administratively exempt.

The Bottom Line:  Class action trials involve very high stakes, but recent history shows that employers, as well as plaintiffs, may prevail.