Tuesday, July 10, 2012

Northern District Concludes that Employer May Not Avoid Class Liability Because At-Issue Policies Only Withheld Overtime Compensation in Amounts Less Than $0.50: Provine v. Office Depot, Inc.

On July 6, 2012, Northern District Judge, Susan Illston, entered an order in Provine v. Office Depot, Inc., 2012 U.S. Dist. LEXIS 93881 (N.D. Cal. July 6, 2012), denying a defense summary judgment and granting certification of various wage claims arising out of a $50 bonus award drawing conducted by Office Depot at each of its California stores each month.  The plaintiff’s theory of liability alleged that the fixed amount and monthly award of the bonus rendered it non-discretionary, and thereon, a necessary component of the employee’s “regular rate” for purposes of computing overtime compensation.  What makes the Court’s opinion in this case particularly interesting is that the named Plaintiff only sustained $0.23 of unpaid overtime for the month which he was awarded the bonus, which Office Depot attempted (albeit unsuccessfully) to use as grounds for summary judgment and/or denial of certification of plaintiff’s overtime and section 203 waiting time penalty claims.

In addition to concluding that the “awards are not ‘discretionary’ under the California Labor Code because the amount of payment was known to all employees in advance” [Provine, 2012 U.S. Dist. LEXIS 93881, at 13], the Court also rejected Office Depot’s argument that the amount of overtime wages owed were de minimis as a matter of law because the amount at issue with regard to the named plaintiff was less than fifty-cents.  Id., at 13-17.  Moreover, the Court declined to rule on Office Depot’s challenge to Plaintiff’s section 203 claim on the grounds that the ratio of damages to penalty rendered the waiting time penalty claim unconstitutional.

In granting certification, the Court concluded that variations in the standards for awarding the bonus at the various Office Depot stores was immaterial to certification, as commonality / predominance of “the claims for which plaintiff seeks certification hinge on whether defendant was required to include Bravo Awards in employees' regular rate of pay to calculate overtime.”  See id., at 25-27, 29.  According to the Court, the uniformity of this question was sufficient to render class adjudication superior (notwithstanding the defendant’s various challenges based on the small value of the named plaintiff’s claim).  Id., at 33-34.

Based on the totality of the forgoing, the instant opinion stands for the general proposition that failure to pay as little as $0.23 in wages is not only sufficient to state a legally viable overtime and waiting time penalty claim, but that such small value claims may withstand challenges regarding superiority.

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