California Supreme Court Permits Class Action to go Forward in Sav-On Overtime Case

In a highly watched case, the California Supreme Court recently reversed a lower appeals court decision, which had prevented an overtime case from proceeding as a class action. The case is Sav-On Drug Stores, Inc. v. Superior Court, which issued on August 26, 2004. Although the Court’s decision did not effect a substantive change concerning any workplace laws, it has made the procedure easier for employees to sue their employers en masse. Employers will no doubt view this as an unfortunate result, coming at a time when class action litigation against employers is steadily on the rise.

The underlying dispute in the case concerned whether Sav-On had misclassified its salaried store managers and assistant store managers as exempt from the State’s overtime laws, which require that employers pay overtime to nonexempt employees when they work more than eight hours in a day or forty hours in a workweek. Employees do not have to be paid overtime if they are on salary, provided that they also spend more than 50% of their workday on “exempt” tasks; i.e., managerial, executive or professional tasks as defined under the overtime laws.

In a unanimous decision, the Court concluded that common questions of law and fact predominated over questions affecting the individual store managers and assistant store managers, thereby making class action proceedings an appropriate method for litigating the case.

Persons wishing further information or who have questions or comments about either this case or any of the cases that have appeared on this website can contact any of the attorneys at Epstein, Turner & Song.