Class certification opinion on remand: Harris v. Superior Court (Liberty Mutual)

On Monday, the Court of Appeal (Second Appellate District, Division One) handed down its opinion on remand in the employee misclassification case, Harris v. Superior Court (Liberty Mutual Ins. Co.), ___ Cal.App.4th ___ (Jul. 23, 2012).

The Supreme Court heard oral argument in this case last October, and handed down its opinion in late December.  Harris v. Superior Court (Liberty Mutual Ins. Co.), 53 Cal.4th 170 (2011).  The high court reversed the Court of Appeal's earlier holding that the administrative exemption did not apply to the plaintiff insurance adjusters, as the employer had argued, and remanded the case back to that court for further proceedings.  The opinion did not address class certification. 

In its opinion on remand earlier this week, the Court of Appeal held that the employer's reliance on the administrative exemption was misplaced, and that the workers' claims for unpaid overtime were properly certified for class treatment:

We hold that, with the few exceptions we have noted, Adjusters’ work duties do not satisfy the qualitative component of the “directly related” requirement because they are not carried on at the level of policy or general business operations.  Adjusters therefore are not primarily engaged in work that is “directly related to management policies or general business operations.”  (Fed. Regs. § 541.205(a) (2000).)  It follows that Adjusters are not exempt administrative employees under either Wage Order 4-1998 or Wage Order 4-2001.  Accordingly, Adjusters’ motion for summary adjudication should have been granted, and, because the qualitative component of the “directly related” requirement is a predominant common issue under both wage orders, Employers’ motion for class decertification should have been denied in its entirety.

Slip. op. at 25-26.

UPDATE:  On October 24, 2012, the Supreme Court depublished the Harris opinion.  It is no longer citable as precedent.