February 26, 2015 UPDATE:  Mies v. Sephora U.S.A, Inc. (1st App. Dist., Feb. 2, 2015) has now been published. 

The recent California Court of Appeal decision in Mies v. Sephora U.S.A., Inc., Case No. A139410 (1st App. Dist., Feb. 2, 2015) (unpublished) joins a growing number of cases finding the existence of uniform corporate policies, standing alone, is insufficient for class certification.  Mies upheld the trial court’s decision denying certification in a misclassification case alleging retail store “Specialists” were misclassified as exempt.

The putative class consisted of approximately one hundred Specialists employed at one of 47 California stores.  Each location had a Store Director and between one and four Specialists who, together, were responsible for managing anywhere from ten to 45 subordinates. The plaintiff alleged that the common issue was “whether Sephora improperly classified the Specialists as exempt executives or administrators” and that this issue could be litigated on a class-wide basis based on allegedly uniform policies and other documents applicable to the Specialist position.  Specifically, the plaintiff argued that the Specialist job description, in effect without change since 1999, could serve as common proof, along with a 2010 in-house survey of how Store Directors and Specialists spent their non-selling time.  The plaintiff also argued, without promulgating any particular method of her own, that the trial court could use statistical evidence to determine liability on a class-wide basis.  In addition, the plaintiff submitted declarations from Specialists attesting that they spent most of their time selling to customers on the sales floor rather than managing the store.

In opposition, the retailer presented evidence that the Specialists’ duties varied among individuals and between different stores. The retailer’s evidence included declarations from: (1) a District Manager attesting that company policies do not dictate everything Specialists do and that Specialists’ work duties varied according to factors such as the size of the store, the number of Specialists at the store, their relative skills and experience, and the management style of the Store Director; and (2) a substantial number of Specialists who recounted the differences in their positions when working at stores of varying sizes, and attested to spending substantial amounts of time as the “Director in Charge” when the Store Director was out of the store.  These Specialists  reported that the amount of time they spent on managerial activities varied, but was always over 50%.

The trial court found there would be some common class-wide issues, such as how to define non-exempt versus exempt tasks and what substantive law would apply to those found to be spending over 50% of their time on non-exempt tasks.  The court acknowledged that the existence of company-wide policies applicable to Specialists suggested how Specialists might spend their time, in theory.  However, the court concluded, the central issue for trial would be how the Specialists actually spent their time, “not whether a given task” is exempt, and the existence of generally applicable company policies could not provide a common basis for this determination because the declarations submitted by the parties demonstrated that different Specialists spent their time very differently.

In upholding the trial court’s denial of certification, the appellate court relied heavily on the recent California Supreme Court decision in Duran v. U.S. Bank National Association, 59 Cal.4th 1 (2014), which found that even when the party proposing a class asserts “the employer consistently imposed a uniform policy or de facto practice on class members, the party must still demonstrate that the illegal effects of this conduct can be proven efficiently and manageably within a class setting.”  The court also looked to prior appellate court decisions in Koval v. Pac. Bell Telephone Co. 232 Cal.App.4th 1050, 1060 (2014), which stated that “existence of a uniform policy does not limit a trial court’s inquiry into whether class action treatment is appropriate,” and Dailey v. Sears, Roebuck & Co. 214 Cal. App. 4th 974, 991-92 (2013),  which upheld denial of certification despite the existence of allegedly uniform corporate policies, where factually divergent declarations highlighted the need for individualized factual inquiry.  The appellate court agreed with the trial court that “whether an employee is exempt depends not only upon factors related to the job, itself (e.g., ‘employer’s realistic expectations’ and ‘realistic requirements of the job’), but also ‘first and foremost’ upon what an employee actually does on the job (e.g., ‘work actually performed’).”  The court observed that the plaintiff “would have us, from [the employer’s] detailed policies, draw inferences about what every Specialist actually does and how much independence every Specialist actually exercises, while essentially ignoring the declarations from both sides, which the trial court credited on those very subjects—declarations that indicate a lack of class-wide uniformity.”

Mies thus adds to the important body of case law in California that requires courts to focus on how employees actually spend their time and look at affidavits and other specific evidence presented rather than general policies, to determine whether common issues will predominate and a case may be certified as a class action.