California Supreme Court Says Class Action Lawsuit Alleging Unpaid Overtime To Managers Of Drug Store Chain May Go Forward


In Sav-On Drug Stores, Inc. v. The Superior Court of Los Angeles (2004 Daily Journal D.A.R. 10,627, Cal., Aug. 26, 2004), the California Supreme Court considered whether a trial court abused its discretion in certifying a class action lawsuit by assistant and operating managers of a drug store chain who are seeking unpaid overtime compensation.


Employees, Robert Rocher and Connie Dahlin, on behalf of themselves and others similarly situated, sued Employer Sav-on Drug Stores, Inc. They claimed that Employer misclassified them and others as exempt from the overtime laws. In particular, they asserted that Employer classified them as salaried managers based solely on their job titles without reference to their actual work. On Employees’ request, the trial court appointed Employees to represent a class of approximately 600 to 1,400 people that included all current and former assistant and operating managers employed by Employer in California between April 3, 1996, and June 22, 2001. Employer appealed the trial court’s decision.

California Supreme Court Decision

A party seeking certification of a class must establish that there is a “community of interest” among the proposed class members. There must be predominant common questions of law or fact that are so numerous or substantial that maintenance of a class action would be advantageous to the judicial process and to the parties. Here, Employees presented evidence that either the Employer had a deliberate policy and practice of misclassifying assistant and operating managers, or a misclassification occurred in part due to operational standardization. According to the Court, a class action would be the most efficient means of resolving class members’ overtime claims to the extent that the Employees will be able to prove that misclassification was the rule rather than the exception.

The Court rejected Employer’s argument that determination of the amount of overtime owed to each manager, if any, would turn on the individual facts and would result in a multitude of mini-trials. Each class member’s claim to unpaid overtime compensation depends on a common issue – “whether he or she worked for defendant during the relevant period in a position that was misclassified either deliberately (on a class basis) or circumstantially (again, as a consequence of [Employer’s] class-wide policies or practices).” This common question predominates over the issues of variation in the work activities undertaken by individual managers and the differences in the total unpaid overtime compensation owed each class member.

In the final analysis, the Court upheld the trial court’s certification of the class, because it would be efficient and fair and would avoid having each individual employee present in “separate, duplicative proceedings the same or essentially the same arguments and evidence.”

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