Seyfarth Shaw LLP | www.seyfarth.com Litigating CA Wage & Hour Class and PAGA Actions (23rd Edition) 135 The executive exemption has the potential to raise inherently individualized issues that are not consistent with class treatment as outlined in the Lockheed case.694 The Wage Orders caution that: The work actually performed by the employee during the course of the work week must, first and foremost, be examined and the amount of time the employee spends on such work, together with the employer’s realistic expectations and the realistic requirements of the job, shall be considered in determining whether the employee satisfies this requirement.695 Given California’s strict quantitative test for exempt status, it would be possible for one manager to spend only 45 percent of his or her time performing exempt tasks (or closely and directly related tasks), and for another manager in the same position to spend 55 percent of his or her time on exemp tasks. The first manager would not be exempt, while the second manager would be exempt. In Nordquist v. McGraw-Hill Broadcasting Co.,696 this is precisely what happened: the Court of Appeal refused to rely on another court’s ruling that the plaintiff’s own successor was exempt because the inquiry was too “fact specific.” While Nordquist was not a class action, its reasoning seemed inconsistent with the notion that exempt misclassification cases would be good candidates for class litigation. In light of the various pronouncements about the individualized inquiry necessary to determine an employee’s exempt status, the defense bar was hopeful that courts would disapprove of a plaintiff obtaining class certification on the ground that a class of managers was uniformly misclassified as exempt. If an employer could bring forth some declarations from store managers attesting that they spend more than half their time on exempt tasks, the best a plaintiff could argue was that many managers at other stores spent the majority of their time on non-exempt tasks. In any case, the finder of fact would need to examine each store and each manager individually to determine if the managers there were misclassified as exempt—an inquiry inconsistent with class litigation. Employers were disappointed when the California Supreme Court issued its decision in Sav-On Drug Stores, Inc. v. Superior Court,697 which indicated that exempt misclassification cases may often be appropriate for certification. In Sav-On, the trial court certified a class of store managers notwithstanding evidence that exempt status of individual managers varied from store manager to store manager based on differences in how they divided their time between exempt and non-exempt tasks. The Court of Appeal held that individualized issues necessarily predominated over common issues because the fact finder would need to examine each store manager’s work habits to see whether that manager spent the majority of his or her time on exempt tasks. In reversing, the Caliofrnia Supreme Court emphasized that the appellate court had given insufficient deference to the trial court’s determination that common issues predominated. The Court stated that if a reasonable person might conclude from the record that common issues predominated over individualized ones, then a trial court’s certification order should not be disturbed on appeal.698 The Court also suggested that the reverse would be true, 694 In Lockheed, a medical monitoring case, the California Supreme Court ultimately reversed the trial court’s ruling granting class certification because “[t]he questions respecting each individual class member’s right to recover that would remain following any class judgment appear so numerous and substantial as to render any efficiencies attainable through joint trial of common issues insufficient, as a matter of law, to make a class action certified on such a basis advantageous to the judicial process and the litigants.” Lockheed, 29 Cal. 4th at 1111. 695 See, e.g., Wage Order 7-2001 § 2(K). 696 32 Cal. App. 4th 555, 569 (1995). 697 34 Cal. 4th 319 (2004). 698 Id. at 331; but see Aguiar v. Cintas Corp. No. 2, 144 Cal. App. 4th 121 (2006), disapproved of by Noel v. Thrifty Payless, Inc., 7 Cal. 5th 955 (2019) (reversing trial court’s decision to deny certification, because trial court did not consider use of
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