A Rebalancing for Wage Act Claims and Class Actions?

Citing three Wage Act cases in 2018, I raised the question in this space whether the Massachusetts Supreme Judicial Court was now taking a more pro-employer view. With appointees of Governor Baker now holding a majority of the Court, did those three decisions in which the Court adopted a narrow interpretation of the Massachusetts Wage Act, G.L. c. 149, §148, mean that the interests of employers might be in the ascendancy? A fourth Wage Act decision decided in April 2019, however, suggests that those questions were premature.
In Gammella v. P.F. Chang’s China Bistro, Inc., the Court took up the appeal of a plaintiff-employee whose attempts to assert a class action based upon wage violations had been thrown out at the trial court level. The case involved alleged “reporting pay” violations by the defendant-employer. Specifically, “reporting pay” is required when an employee who appears for work is sent home early. When sent home early, the employee must be paid for at least minimum wage for three hours.
Mr. Gammella’s individual “reporting pay” claim was small – $453. He therefore sought class certification which would enable him to assert “reporting pay” claims on behalf of hundreds of employees of the defendant-employer who in the aggregate had been sent home early 7,000 times over a four year period. If proven, the class claims would dwarf the individual claims of Mr. Gammella.
A Superior Court judge denied class certification. He found that the plaintiff had failed to show that a sufficient number of those 7,000 instances were entitled to “reporting pay” due to violations by the employer to satisfy the class action numerosity requirement. In that regard, the lower court had held that the plaintiff’s showing had failed to establish which employees had been sent home for reasons that would trigger “reporting pay” and which had left early for reasons for which no such payment was required (for example, the employee had asked to leave early). Because of that uncertainty, the plaintiff’s proof failed and class certification was denied.
After successfully defeating the class certification attempt, the defendant-employer had then employed a tactic to prevent the plaintiff from appealing that denial. In that regard, it tendered a certified check for all of the payments that the plaintiff claimed were due. Following the plaintiff’s rejection of that check, the defendant argued that his claim should be dismissed. Adding insult to the injury of the denial of class certification, a different Superior Court judge agreed and found that the plaintiff’s rejection of that offer rendered his individual case moot. The case was then dismissed in its entirety.
On appeal, the Supreme Judicial Court sided with the employee, vacating the dismissal and denial of class certification. The Court then remanded the case for a further consideration of whether the class should be certified.
In reaching that conclusion, the Court looked askance at the employer’s obstruction of the plaintiff-employee’s efforts to develop the facts that might have permitted him to meet the class requirements. Specifically, the employer had provided records showing employees who had been sent home early, but its records did not show why. The employer also refused to provide employee names effectively handcuffing the plaintiff’s ability to show that the reasons were illegitimate and should have triggered the payment requirement. The uncertainty created by the defendant’s strategic “information monopoly,” the Court held, should not be held against the plaintiff-employee, but rather against the employer. Giving the benefit of the doubt to the employee, the Court held that it was “reasonable to infer that the number of plaintiffs would satisfy the numerosity requirement.”
The Court also rejected the employer’s argument that the plaintiff-employee’s refusal to accept its “make whole” offer should render his individual claim moot. Recognizing that such a finding would have the effect of terminating the entire litigation and avoiding the possibility of an appeal of the class certification denial, the Court overturned the lower court’s mootness ruling and dismissal. In doing so, the Court avoided giving the defendant the practical power to make the denial of class certification questions unreviewable through this type of clever buy-out strategy. The net effect was that the Court revived the plaintiff-employee’s individual claim and permitted him a chance to relitigate the class question aided by the Court’s strong language tilting in favor of certification.
In light of this recent opinion, it is apparent that the potential “lean” of the Baker Court perceived by this author [See “WARN Act Violations ≠ Wage Act Violations,” January 3, 2019; “Violation of Sick Time Payout Policy Not a Wage Act Violation,” January 31, 2018; “A Bridge Too Far – Individual Liability for Wage Act Violations,” January 3, 2018] was more imagination than reality. Or is it perhaps a situation where the employer’s aggressive tactics in this one case precipitated the need by the Court to level the playing field?

About Rich Van Nostrand

Rich is a partner at the Firm. He has extensive experience in general civil trial work, with concentrations in business, commercial and employment litigation. He provides advice and representation in a variety of business and commercial litigation matters, including shareholder disputes, corporate dissolutions, intra- and inter-company disagreements, and intra-family business disputes. Rich also provides ongoing employment litigation and counseling services to numerous clients in the private, public and higher education sectors. In the private sector, Rich represents clients in a broad range of industries including health care, professional services, high technology, industrial and manufacturing. In addition, he is also frequently selected by litigants to assist in the resolution of their disputes as an independent arbitrator or mediator.
This entry was posted in Wages and tagged , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s