Last week, in McCaster et al. v. Darden Restaurants, Inc. et al., No. 15-3258 (7th Cir. Jan. 5, 2017), the Seventh Circuit relied on Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) and affirmed the district court’s denial of class certification of Plaintiffs’ claims for vacation pay under state law.  The Seventh Circuit’s reliance on Dukes demonstrates that the Supreme Court’s holding extends beyond the discrimination context and applies with equal force in wage and hour class actions (at least within the Seventh Circuit).  The Court concluded that Plaintiffs’ proposed class definition constituted an impermissible “fail safe” class because an individual’s membership in the class turned on the merits of his or her claim, and that Plaintiffs’ alternative class definition did not satisfy the commonality requirement of Rule 23 under Dukes. This decision exemplifies the critical balance plaintiffs must strike in defining their proposed classes; while a “fail safe” class will not be permitted, a class definition that is too broad will not satisfy the requirements of Rule 23.

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Plaintiffs Demiko McCaster and Jennifer Clark, who worked at two different restaurants owned by Darden Restaurants, Inc., alleged that Darden failed to pay them the accrued vacation pay allegedly owed to them upon their separation from employment in violation of the Illinois Wage Payment and Collection Act (“IWPCA”). Here, the “vacation pay” at issue was actually “anniversary payments” paid to eligible employees when they reached the annual anniversary of their hiring date.  The anniversary payments are referred to as “vacation pay” because Darden treated the anniversary payments as vacation pay for purposes of the IWPCA, and when an employee stopped working for the company, Darden would include the pro rata amount of anniversary pay in the employee’s final paycheck.

Plaintiffs sought to bring claims on behalf of themselves and “[a]ll persons separated from employment with [Darden] in Illinois between December 11, 2003, and the conclusion of this action[] who were subject to Darden’s Vacation Policy . . . and who did not receive all earned vacation pay benefits.” The Seventh Circuit agreed with the district court that this definition described an improper “fail safe” class because membership in the class was dependent on whether an individual had a valid claim.

In an attempt to address the district court’s concerns with the “fail safe” class, Plaintiffs proposed an alternative definition, which omitted the phrase “who did not receive all earned vacation pay benefits.” By way of their alternate class definition, Plaintiffs sought to bring claims on behalf of “[a]ll persons separated from employment with [Darden] in Illinois between December 11, 2003, and the conclusion of this action[].”  The Seventh Circuit concluded that Plaintiffs did not satisfy the fundamental commonality requirement of Rule 23(a) because the alternate class consisted of all employees who separated from employment with Darden during a specific time period but Plaintiffs did not identify any unlawful conduct by Darden that covered the entire putative class and that caused putative class members to suffer the same injury.

The Court explained that Plaintiffs had not “pointed to any unlawful practice or act common to the class” and did not, for example, argue that Darden’s vacation-pay policy violated the IWPCA on its face. Rather, Plaintiffs simply claimed that some former employees did not receive all of the vacation pay they were allegedly due under the vacation policy without proffering any common proof that could establish liability on a class-wide basis.  Accordingly, the Seventh Circuit concluded that the case “raise[d] only an amalgam of individual IWPCA pay claims by McCaster, Clark, and other separated employees . . . that may (or may not) be valid based on the employee’s particular circumstances” and assessing the merits of the claims would depend “entirely on each employee’s individual work history [with Darden] and the specific payroll practices of the managers of the restaurants where they worked.”

The Court acknowledged that Plaintiffs had offered one question that was technically “common” to the putative class – whether Darden’s vacation pay policy is a length of service policy subject to the pro rata requirement of the IWPCA. The Court found that this question did not advance Plaintiffs’ argument in support of class certification. It was undisputed that Darden treated the vacation pay as subject to the IWPCA’s pro rata requirement and therefore the answer to that “common” question did not satisfy the commonality requirement of Rule 23 under Dukes because it did not resolve “an issue that is central to the validity of each one of the claims in one stroke.”

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Photo of Elise M. Bloom Elise M. Bloom

Elise M. Bloom is widely hailed as one of the nation’s top employment lawyers and one of the most creative and effective discrimination wage and hour, class/collective action trial lawyers. She is particularly well-known for handling high profile, bet-the-company matters on behalf of…

Elise M. Bloom is widely hailed as one of the nation’s top employment lawyers and one of the most creative and effective discrimination wage and hour, class/collective action trial lawyers. She is particularly well-known for handling high profile, bet-the-company matters on behalf of significant national employers.

Elise is the former co-chair of Proskauer’s Labor & Employment Department, co-head of the Class & Collective Actions Group and previously served as a member of Proskauer’s elected Executive Committee for two terms.

With 30+ years in practice, Elise possesses extensive pre-trial and jury trial experience as well as conducting high-profile investigations. She has represented more companies in class actions challenging interns, trainees and volunteers than most others; this includes her precedent-setting win for Fox Searchlight Pictures in the “Black Swan” case. She also addresses a wider range of general employment issues through counseling and employer training programs.

A noted author and speaker on employment-related topics, Elise spearheads Proskauer’s annual Value Insights: Delivering Value in Labor and Employment Law survey. Elise has been recognized as one of the leading employment lawyers by several leading publications such as Chambers USA, Legal 500, New York Law Journal and Employment Law360, to name a few. She was recently recognized as “Labor & Employment Management Attorney of the Year” at Benchmark Litigation’s 2020 US Awards EAST. She has also been named “Best in Labor & Employment” at Euromoney’s Women in Business Law Awards Americas in 2018, 2017, 2016 and 2014. A client recently told Chambers USA, “She’s incredible. She has an intensity about her work and she knows how corporations work. To watch her in litigation is magic.”

Photo of Mark W. Batten Mark W. Batten

Mark W. Batten is a partner in the Labor & Employment Law Department and co-head of the Class & Collective Actions Group.

Mark represents employers nationwide at all stages of complex employment litigation, including class and collective actions on wage and hour matters…

Mark W. Batten is a partner in the Labor & Employment Law Department and co-head of the Class & Collective Actions Group.

Mark represents employers nationwide at all stages of complex employment litigation, including class and collective actions on wage and hour matters and discrimination claims. Ranked by Chambers USA, Mark is hailed as “a fabulous lawyer, handling interesting and complex cases.” Clients “highly recommend him to anyone seeking litigation counsel in the Boston area,” as well as note “he is responsive, pragmatic and team-oriented, and offers excellent legal advice.”

He assists clients with all aspects of employment policies and practices, including hiring, termination, leaves, accommodation of disabilities, and other matters. Mark also handles diverse civil litigation, including litigation of noncompetition agreements, ERISA matters, discrimination and wrongful termination litigation in federal and state courts; proceedings before the Massachusetts Commission Against Discrimination; wage and hour matters; and labor arbitrations. He is also an experienced appellate attorney both in employment cases and other civil litigation, handling appeals at all levels in the state courts and in the United States Courts of Appeals.

Mark also has substantial experience with traditional labor matters. He regularly represents employers in a variety of industries, including a number of newspaper and media companies, in collective bargaining, practice before the NLRB, labor arbitrations, union organizing campaigns, and day-to-day advice on administration of collective bargaining agreements. He regularly advises clients in both union and non-union settings on diligence matters in corporate acquisitions and financings. He also has experience on behalf of securities firms in arbitrations before the NASD and NYSE of customer and employee complaints.

Mark also practices on behalf of newspapers and other media in newsroom litigation, including libel defense and representation of reporters under subpoena, and has substantial experience in litigation involving access to sealed records and judicial proceedings on behalf of media companies.

Before joining Proskauer, Mark was a trial attorney in the Civil Division of the U.S. Department of Justice in Washington, where he was lead counsel in major litigation for over two dozen federal agencies, ranging from the U.S. Air Force, the CIA, and the U.S. Secret Service to the Department of Housing and Urban Development and the National Endowment for the Arts.

Mark regularly writes and lectures on employment-related matters, including, for instance, MCLE’s Representing Clients Before the Massachusetts Commission Against Discrimination.

In his spare time, Mark is an experienced computer programmer, conversant in C, C++, and other languages. He has ported software between computer operating systems and has published several commercial computer games.

Photo of Noa Baddish Noa Baddish

Noa M. Baddish is a senior counsel in the Labor & Employment Law Department. She is a member of the Sports, Employment Litigation & Arbitration, Class and Collective Action, Wage & Hour and Whistleblower & Retaliation Practice Groups.

Noa’s practice concentrates on all…

Noa M. Baddish is a senior counsel in the Labor & Employment Law Department. She is a member of the Sports, Employment Litigation & Arbitration, Class and Collective Action, Wage & Hour and Whistleblower & Retaliation Practice Groups.

Noa’s practice concentrates on all aspects of labor and employment law. Her employment litigation practice in state and federal courts includes class and collective actions and defending claims of discrimination, harassment, breach of contract and violations of wage and hour laws. Noa represents Major League Baseball and its clubs in an ongoing litigation brought by current and former minor league players who allege minimum wage and overtime violations. In addition, Noa has represented clients in the media and entertainment and fashion industries in lawsuits brought by unpaid interns in wage and hour disputes.

Noa also provides significant assistance on counseling matters on a wide array of issues for clients in various industries, including, but not limited to, sports, law firms, financial institutions, media and fashion.

Noa has been recognized as a Rising Star by New York Super Lawyers since 2015. She has authored and contributed to several articles and newsletters on employment and labor topics, including “State Whistleblowing Laws Provide Whopping Verdicts,” New York Law Journal (January 2014). Noa is also a frequent contributor to the Firm’s Whistleblower Defense blog.

Previously served as Assistant General Counsel to the New York City Mayor’s Office of Labor Relations, Noa defended the Mayor and City agencies against both employee grievances at arbitration and improper practice petitions before the Board of Collective Bargaining. Prior to that, she was a Law Clerk to Judge Ellen L. Koblitz of the Appellate Division of the New Jersey Superior Court.

While in law school, Noa served on the Executive Board as notes and articles editor of the Fordham Urban Law Journal.