$15 Million Judgment Against U.S. Bank Reversed in Wage and Hour Class Action

On February 6, 2012, the California Court of Appeal, First Appellate District decertified a wage and hour class action lawsuit filed by business banking officers and overturned a $15 million judgment against U.S. Bank. This was in the recent case of Duran v. U.S. Bank National Association, 2012 WL 366590 (Cal.App. 1 Dist.).

The Plaintiffs first filed their case in 2001, alleging that they were misclassified as "exempt" employees and denied compensation for overtime hours. U.S. Bank claimed that the business banking officers fit the exemption for "outside salespersons," because they spent more than half their working time away from the office selling financial services.

During trial, the Trial Court used a random sample of 21 class members to testify as representatives for a class consisting of 260 members, in the interest of expediency. The Trial Court refused to allow the bank to introduce evidence challenging the claims of the other 239 class members. The evidence the bank sought to introduce, if deemed persuasive, would have established that at least one-third of the class was properly classified as exempt.

The Court of Appeal held that the Trial Court's strategy of relying solely on the evidence derived from a 20-person sample to determine class-wide liability violated principles of due process, and deprived U.S. bank's constitutional right to a fair trial. While innovation and pragmatic procedural devices are encouraged to simplify and manage class actions, the rights of parties may not be sacrificed for the sake of expedience.

This case supports the premise that due process principles require individualized inquiries where the applicability of an exemption turns on the specific circumstances of each employee. The attorneys at Kring & Chung are available to answer any inquiries you may have relating to this new case, as well as discuss with you any wage and hour issues.

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