As we recently reported here, there have been a number of appellate decisions ordering class certification based on the existence of an employer’s companywide policy – all while overlooking numerous individualized questions that would undoubtedly create manageability problems during trial.  On December 30, 2013, the California Court of Appeal in Johnson v. California Pizza Kitchen, Inc., 2013 WL 6858373 (Cal. App. 2 Dist. Dec. 30 2013) anticipated these trial management issues and upheld the trial court’s decision denying class certification.

In Chavarria v. Ralphs Grocery Co., No. 11-56673, 2013 WL 5779332 (9th Cir. Oct. 28, 2013), the plaintiff, a former deli clerk, brought a class action against Ralphs for various alleged wage and hour violations of the California Labor Code.  As a condition of employment, Chavarria signed an arbitration agreement containing a class action waiver.  Ralphs filed a motion to compel arbitration.

Frank Moreno agreed, as a condition of his employment with Sonic-Calabasas A, Inc., to arbitrate all of this employment disputes with his employer.  After terminating his employment with Sonic, Moreno filed an administrative wage claim with the Labor Commissioner for unpaid vacation pay.  Filing such a claim is the first step toward obtaining a “Berman” hearing (an administrative dispute resolution forum designed to assist employees in recovering wages).

In 2005, Congress passed the Class Action Fairness Act (CAFA), which creates federal jurisdiction over class actions involving more than 100 class members and $5 million in controversy.  Plaintiffs have long attempted to avoid CAFA’s invocation of federal jurisdiction by stipulating to no more than $5 million in classwide damages.  In Standard Fire Ins. Co. v. Knowles, 133 S. Ct. 1345 (2013), the Supreme Court’s first CAFA case, the Court rejected such stipulations on the basis that, prior to class certification, a named plaintiff has no authority to legally bind unnamed class members.