On July 7, 2009, the Ninth Circuit issued two favorable decisions which involve an examination of the outside sales exemption as it pertains to class certification issues.
- In Vinole v. Countrywide Home Loans, Inc., the Ninth Circuit affirmed the trial court’s order denying class certification in an outside sales exemption case. In a similar case, Mevorah v. Wells Fargo Home Mortgage (In re Wells Fargo Home Mortgage Overtime Pay Litigation), the Ninth Circuit found that the trial court abused its discretion in certifying a class of employees whom the employer designated exempt under the outside sales exemption. These cases resulted in the following important findings:
- In Vinole, the Ninth Circuit found that a defendant may affirmatively move to deny class certification under Rule 23(b)(3) before the plaintiffs have affirmatively moved to certify a class.
- In Vinole, the Ninth Circuit held that “the district court did not abuse its discretion by considering [the employer’s] motion where Plaintiffs had a sufficient opportunity to present its case in favor of class certification.”
- In Vinole, the Ninth Circuit rejected Plaintiff’s argument that class certification is warranted whenever an employer uniformly classifies a group of employees as exempt. The Ninth Circuit held: “[W]e favor an approach that takes into consideration all factors that militate in favor of, or against, class certification…The overarching focus remains whether trial by class representation would further the goals of efficiency and judicial economy.”
- In Vinole, the Ninth Circuit acknowledged the trial court’s ruling that “analysis of the outside salesperson exemption precluded certification because that analysis would require an individualized inquiry into the manner in which each HLC actually carried out his or her work, and that this burden was not lessened by the presence of other issues susceptible to common proof.”
- In Mevorah, the Ninth Circuit reversed the District Court, holding that it “abused its discretion” in relying on an internal policy classifying all of the employees at issue as exempt. The Ninth Circuit held that it was reversible error to rely on that internal policy to the “near exclusion of other factors relevant to the predominance inquiry.”
- In Mevorah, the Ninth Circuit rejected language from an earlier district court decision in Wang v. Chinese Daily News, Inc., 231 F.R.D. 602, 612-13 (C.D. Cal. 2005), which found predominance of common issues based on an employer’s policy of treating all employees in a certain position as uniformly exempt from overtime compensation requirements.
- In Mevorah, the Ninth Circuit recognized that, “Often, this exemption [the outside sales exemption] will militate against certification because, as the district court noted, it requires ‘a fact-intensive inquiry into each potential plaintiff’s employment situation. . . .’ . . . courts must still ask where the individual employees actually spent their time.”