By: Beth Pelliconi and Noah Finkel

Seyfarth Synopsis:  The Tenth Circuit Court of Appeals has provided a helpful guide to employers seeking to defeat class and collective certification of claims that employees worked off-the-clock and skipped meal and rest periods in order to meet productivity standards.

“We can’t get our work done in the time you’ve allotted” is a common refrain offered by wage-hour plaintiffs and their counsel in off-the-clock cases.  They invoke this to argue that productivity standards or timeliness requirements, particularly against the backdrop of policies or practices limiting overtime, constitute a common issue that should allow them to pursue wage-hour claims on a class or collective basis because those standards or requirements caused them to work overtime off-the-clock or through meal and rest breaks.

But last week in Brayman v. Keypoint Government Solutions, Inc.,  the Tenth Circuit provided a helpful roadmap as to why such allegations may be insufficient to certify a class or collective action.

There, the Tenth Circuit vacated a Colorado district court’s decision to grant certification to a class of employees for claims alleging off-the-clock work and meal and rest period violations under California law.  In doing so, the court reaffirmed the principle that class certification should not be granted in the absence of a vigorous predominance analysis under Rule 23(b)(3), showing that factual issues can be determined by reference to a predominance of common, rather than individualized, forms of proof.    

The employees in Brayman were Field Investigators whose job duties involved conducting interviews, searching public records, and writing reports.  Their claims focused on allegations that they were forced to work off-the-clock and to miss meal and rest breaks in order to meet the employer’s stringent productivity, timeliness and quality standards.

The productivity standard at issue required that employees achieve minimum levels of “source unit” credits per hour worked – they received specified amounts of these credits, per hour, for performing certain essential tasks, whereas other tasks, such as certain administrative tasks, did not qualify for any credit. 

In addition to productivity standards, the employees were required to meet timeliness and quality standards, by completing at least 85% of their assignments by a stated deadline and by submitting reports that did not require revision. 

The employees were subject to discipline for failing to meet these productivity, timeliness, and quality standards.  While they were permitted to work overtime, the employees had to obtain approval from supervisors in advance of doing so, and alleged that overtime hours were limited and not always approved.

Against this factual backdrop, the district court had granted class certification to the employees on their off-the-clock claim, finding that it could be established by common evidence of work assignments, performance expectations, and work hours reflected in the employer’s software systems.  The district court also found that there was common evidence of whether the employer “knew or should have known” about the uncompensated overtime, because employees had complained to supervisors and Human Resources personnel about the productivity standards.

The Tenth Circuit, however, vacated the district court’s order, concluding that its failure to conduct a proper predominance analysis was an abuse of discretion.  In remanding the case, the Tenth Circuit directed the district court to consider the following questions in determining whether individual or common issues predominated in the case: (1) whether each employee in the proposed class worked uncompensated overtime; (2) how much uncompensated overtime was worked by each employee; and (3) whether the employer “knew or should have known” about the uncompensated overtime.  As to the “knew or should have known” standard, the Tenth Circuit signaled that variations in the evidence could make it difficult to conclude that the same common evidence would be admissible in each employee’s individual case.  As the Tenth Circuit noted, some employees stated that the employer’s knowledge of uncompensated overtime arose from the fact that supervisors altered timecards to remove overtime hours, whereas others alleged that they were “encouraged and pressured” by supervisors to work unrecorded overtime hours, and others contended that they were instructed to underreport their overtime hours.    

As for the meal and rest break claims, the district court had granted class certification based on the same evidence underlying the off-the-clock claim, without conducting a separate analysis that reviewed the evidence in connection with the elements of those claims.  The Tenth Circuit found that this was also an abuse of discretion, noting:  “It is one thing to say that because of the workload, the employee was pressured to put in uncompensated overtime.  It is an entirely different thing to say the employee would feel pressured to eliminate rest breaks and meal breaks to get the work done – particularly when employees have autonomy on when they schedule their meal and rest breaks.” 

In addition to vacating the district court’s class certification rulings, the Tenth Circuit reversed the district court’s denial of the employer’s motion to compel certain plaintiffs to arbitrate their California state-law claims.

Brayman is a good reminder of how a proper predominance analysis is to be conducted in connection with class certification motions.  The decision also provides a helpful roadmap for defeating class certification, and also collective action certification, through emphasis of variations in proof and consideration of individualized inquiries that would be required in order to reach liability determinations for wage-hour claims.