Litigating California Wage & Hour and Labor Code Class Actions

I. Introduction and Overview
Since the turn of the century, there has been a huge increase in the number of class action lawsuits
filed in state courts alleging violations of California’s overtime laws or other Labor Code statutes
and wage and hour regulations. Currently, several such class actions are filed every day in
California.
The reasons for this trend are essentially fourfold. First, California’s wage and hour law differs from
federal law in subtle yet important ways. This means that an employer might be compliant with
federal law, but not California law. Second, California procedural rules make it easier to file a class
action or collective action. In contrast, the federal Fair Labor Standards Act requires an “opt-in”
procedure that tends to restrict the size of classes as compared to the “opt-out” class action
procedure used in California. Third, California’s unfair competition law allows claimants to borrow
violations of other laws and extend the statute of limitations to four years, which tends to make
class actions more lucrative. Fourth, many California Labor Code provisions allow for the recovery
of attorney’s fees to a prevailing plaintiff, creating additional incentives to pursue litigation.
California Labor Code class actions come in various shapes and sizes. Essentially, however, any
Labor Code violation that can be tied to a corporate policy could support a class action. For that
reason, plaintiffs in California continue to come up with new theories as to how wage and hour
violations may support class litigation. This publication reviews the most commonly filed wage and
hour and Labor Code class claims and the development of the law over the last several years. It
does not, however, attempt to provide a comprehensive overview of California wage and hour law.
Sections II through X of this paper address some of the most common types of class claims in
California, such as claims for exempt classification, meal period violations, and denial of expense
reimbursement. The next two Sections address some peculiar provisions in California law that tend
to expand potential damages recoverable in California class actions such as the Labor Code
Private Attorneys General Act, and the Unfair Competition Law (“UCL”). Lastly, Sections XIII
through XVIII address various aspects of class action procedure in California—the rules governing
class certification, class discovery, class settlement, class arbitration, and individual liability.
II.
Common Exempt Misclassification
Claims
The first wave of class claims filed against large California employers challenged the exempt
status of groups of employees holding the same job. In short, the plaintiffs’ counsel argued that the
employer had engaged in a common practice of misclassifying a group of employees as exempt
from overtime, thus entitling all employees in the group to back overtime pay, interest, and
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