Martinez v. Joe's Crab Shack Holdings Lawsuit Allowed to Go Forward

In a case that has wound its way up and down the California court system for several years, some clarity has finally been achieved. Martinez v. Joe’s Crab Shack Holdings, 231 Cal.App.4th 362 (2014), began when Lisa Saldana, together with current and former employees of various Joe's Crab Shack (JCS) restaurants in California, sued JCS based on wage and hour claims. Saldana sought class status for the salaried managerial employees, claiming that they were misclassified as exempt from overtime pay requirements. In seeking class certification, plaintiffs offered evidence of the following issues common to putative class members:

1. JCS hires, trains, and implements the same operational practices for all of its restaurants;
2. Managerial employees are all evaluated in the same way; and
3. All managerial employees were classified as exempt employees.

In addition to these assertions, the plaintiffs argued that managerial employees were misclassified for purposes of overtime pay because they spend a majority of their time performing hourly tasks. The employees also argued that their tasks did not change once they became managers, but their exempt status did, resulting in managerial employees working longer hours than hourly workers, but receiving no overtime compensation.

Responding to the allegations, defendant JCS offered deposition statements from supposed class members, which showed that their work duties and hours often varied. The employees’ statements also described managerial work performed even when filling in for hourly workers, thus making it difficult to separate the type of duties expected and performed.

Finally, JCS argued that the proposed class, which was to include all managers – general managers, senior kitchen managers, and front managers – was too inclusive. There were too many distinct issues between the different managerial employees for there to be the commonality necessary for class certification.

The trial court agreed with defendant JCS. In 2012, it denied class certification based on the fact that the plaintiffs were not typical class members and the common issues did not predominate over the individual ones. In refusing to allow class certification, the trial court decided that a class action was not the best way to resolve the wage and hour claims of the employees. The plaintiffs appealed the decision.

As Martinez v. JCS was working its way through the courts, a case called Brinker Restaurant Corp. v. Superior Court, 53 Cal.4th 1004 (2012), was decided by the California Supreme Court. In Brinker, the Court held that rest and meal break violation claims could present enough common issues to meet the criteria necessary for class certification.

When Martinez v. JCS reached the California Court of Appeals for the second time in 2014, the court reversed the trial court again, referring to the Brinker decision when stating that “class-wide relief remains the preferred method of resolving wage and hour claims, even those in which the facts appear to present difficult issues of proof.” Unlike the trial court, the Court of Appeals was not persuaded that the mere presence of individual issues among putative class members prevented class certification. Cases involving exemptions and wage and hour claims would necessarily contain individual issues, according to the court. In agreement with the Brinker court, the Court of Appeals held that common issues could still prevail. Any factual conflict between evidence in support of class certification and deposition testimony of putative class members presented factual issues that needed to be resolved prior to class certification, rather than presenting any per se barrier to class consideration. Furthermore, the court noted that if the issues of general managers were too distinct from other employees, then those managers could form a subclass or they could be excluded from the class altogether.

The California Court of Appeals reversed the trial court's denial of class certification in November of 2014. A writ of certiorari was filed with the California Supreme Court; the petition was denied on February 11, 2015.

While the plaintiffs in Martinez have not yet been certified as a class, much has already been accomplished through court decisions in the years it took the Martinez plaintiffs to win the right to present their case for certification. Class actions are now the preferred method for resolving wage and hour claims based on the misclassification of employees as exempt from overtime requirements. In addition, trial courts are focusing on employers’ policies and practices, and their effects on putative class members, rather than asking the putative class members to identify in retrospect particular tasks that were managerial or hourly for purposes of exempt status.

The Nassiri Law Group helps to protect workers from wage and hour violations. We have the legal experience to know when an employee’s rights are being violated. If you believe that you have been harmed by the actions of your employer, contact the employment attorneys at Nassiri Law Group, practicing in Orange County, Riverside, and Los Angeles. Call (949) 375-4734 to schedule a consultation.