Pitts v. Terrible Herbst, Inc. (9th Cir. 10-15965 8/9/1) FLSA/Class Action

By Alexis Gutierrez

  • Wage/Hour Class Action Decision applying federal procedural law and NV state law.
  • Take-Away: Defendant employer could not “pick off” representative plaintiff to end class action lawsuit. A defendant may “moot” a class action through an offer of settlement only if he satisfies the demands of the class; an offer to one cannot moot the action because it is not an offer to all.

Summary Of Decision:

In April 2009, Gareth Pitts filed a class action complaint in Nevada state court against his employer, Terrible Herbst, Inc. (“Terrible”). The complaint alleged that Terrible failed to pay Pitts and other similarly-situated employees overtime and minimum wages and listed three causes of action: (1) a collective action for violations of the Fair Labor Standards Act (“FLSA”) (Count 1); (2) a class action for violations of Nevada labor laws (Count 2); and (3) a class action for breach of contract (Count 3). Terrible removed the case to federal court in May 2009.

In July 2009, Terrible made Pitts an offer of judgment pursuant to the Federal Rules. Under the terms of this offer, Terrible agreed “to allow judgment to be taken against it in the total amount of $900.00, plus costs and a reasonable attorney’s fee.” Although Pitts claimed only $88.00 in damages for himself, he refused Terrible’s offer. Thereafter, Terrible argued that the—albeit rejected—offer (for more than the claimed amount) should prevent the representative plaintiff from proceeding with his suit. The Circuit Court rejected this argument, reasoning:

U.S. Supreme Court Denies Class Certification in Wal-Mart Sex Discrimination Suit

By Sam G. Sherman

The U.S. Supreme Court recently denied class certification in a suit brought by a class of roughly 1.5 million female current and former Wal-Mart employees in Wal-Mart v. Dukes. The female employees alleged that Wal-Mart’s policy of providing local managers with discretion over employment decisions has a disproportionate impact against female employees in violation of Title VII of the Civil Rights Act of 1964.

The case went to the U.S. Supreme Court after the trial court and the Ninth Circuit Court of Appeals certified the class. The Supreme Court reversed finding the absence of a common question of law or fact applicable to all 1.5 million current and former employees. The Supreme Court began by recognizing that the “commonality” requirement in class action litigation obligates a Plaintiff to advance a common contention capable of classwide resolution. “What matters to class certification…is not the raising of common questions…but, rather the capacity of a classwide proceeding to generate common answers.”

A Plaintiff can establish commonality in two ways. First, establishing the employer used a biased testing procedure to evaluate prospective and current employees that had a disproportionately negative impact on the class. Second, Plaintiff can provide significant proof that the employer operated under a general policy of discrimination.

Ninth Circuit Issues Published Pro-Employer Ruling in Recovered Addict Disability Discrimination Case

By: Jason C. Ross, HFM Labor & Employment Associate

California and Federal anti-discrimination laws generally preclude qualified employers from discriminating against employees “because of” protected attributes and classes, including certain disabilities. One protected disability under both California and Federal employment law is rehabilitated drug addicts.

In a recent California case, the federal Ninth Circuit Court of Appeals considered the legality of an employer policy forever disqualifying job applicants from employment if they ever failed the employer’s pre-employment drug screen. (Lopez v. Pacific Maritime Assoc. (9th Cir. 2011) 636 F.3d 1197.) In that case, the employer had a uniform “one-strike” policy forever eliminating from consideration any job applicant failing the pre-employment drug test (administered with seven (7) days advance notice). The plaintiff applied to employer in 1997 at a time he suffered from drug and alcohol addiction, but failed the drug screen. Employer disqualified plaintiff under their one-strike policy. Later, in 2004, after getting clean, the plaintiff again applied for a job with employer. However, employer rejected his 2004 candidacy under its one-strike rule because of his failed 1997 drug test. At the time employer rejected plaintiff, employer was not aware of his prior addiction. Plaintiff then sued under Federal and California law alleging the one-strike policy discriminated against him as a rehabilitated drug addict, claiming the policy disproportionately impacted former addicts even when neutrally applied (disparate impact) and also purposefully discriminated against former drug addicts (disparate treatment).

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