Labor & Employment Law Daily Denial of class certification reversed in major win for minor league baseball players
Tuesday, August 20, 2019

Denial of class certification reversed in major win for minor league baseball players

By Wayne D. Garris Jr., J.D.

The choice of law issues which prompted the district court to deny certification of two of the players’ proposed state law classes did not overwhelm the class claims. The Ninth Circuit also affirmed certification of the remaining classes.

A class of minor league baseball players may proceed with their proposed class and collective actions after the Ninth Circuit affirmed in part and reversed in part a district court’s order certifying a California class and a FLSA collective but denying certification for Arizona and Florida classes and a Rule 23(b)(2) class. The court disagreed with the district court that choice of law issues precluded certification of the classes, finding that California law allowed the players to proceed (Senne v. Kansas City Royals Baseball Corp., August 16, 2019, Paez, R.).

Uniform player contract. All minor league players must sign the Minor League Uniform Player Contract (UPC). Under the UPC, minor league players are paid only during the championship season; however, the players are obligated to work outside of the season, including pre-season training, exhibition games, instructional training, and post-season training. The players filed suit under the FLSA and the wage and hour laws of California, Arizona, and Florida against MLB, MLB Commissioner Bud Selig, and several MLB franchises, alleging that the defendants failed to pay the players for offseason activities and failed to pay wages for overtime worked during the championship season.

State law classes. In addition to their federal claims, the players proposed three classes with state law claims: The California class consisted of those players who participated in the California League, which plays games exclusively within California during the championship season; and the Arizona and Florida classes consisted of those who performed during spring training, extended spring training, and the instructional leagues in those states.

Case history. Initially, the district court granted conditional certification of the players’ FLSA claims. However, in a July 2016 ruling, the court denied the players’ motion for class certification under Rule 23(b)(3) and decertified the FLSA collective, finding wide variations among the players as to the types of activities in which they engaged and the circumstances under which they engaged in them. These variations would give rise to a plethora of individualized inquiries relating to the determination of the amount of compensable work they performed, the court held, finding as well that the players lacked standing to seek certification for injunctive relief under Rule 23(b)(2).

It also excluded as unreliable, in part, the players’ expert witness declarations and testimony, who offered player survey data as evidence that the claims were amenable to class treatment. After granting the players’ motion for reconsideration, the district court certified the Rule 23(b)(3) class and the FLSA collective but denied certification for Arizona and Florida classes and for a Rule 23(b)(2) class. Both parties appealed.

“Conduct within its borders.” Starting with the California class, the appeals court first explained that a federal district court considering state law claims must use the choice of law rules of the forum state, so California choice of law rules applied. Relying on the California Supreme Court’s decision in Sullivan v. Oracle Corp., the court agreed with the district court that California law applied to the Rule23(b)(3) classes. Specifically, even though several of the players in the California league played for teams that were headquartered outside of the state, those players performed work in California for days or weeks at a time and, thus, the district court was correct in finding that California law applied to the California class.

Turning to the Arizona and Florida classes, the court applied the three-step governmental interest analysis set forth by the California Supreme Court and held that Arizona law should apply to the work performed in Arizona and Florida law should apply to work performed in Florida. In declining to apply California law, the Court stated that Sullivan indicates that under California’s choice of law principles, a state has a legitimate interest in applying its wage laws extraterritorially only in two limited circumstances, neither of which apply here: one, when a state’s resident employee of that state’s resident employer leaves the state “temporarily during the course of the normal workday,” and two, “when the traveling, resident employee of a domestic employer would otherwise be left without the protection of another state’s.

Ultimately, the court held that the district court failed to consider a key principle of California’s choice of law doctrine—that a jurisdiction ordinarily has the predominant interest in regulating conduct within its own borders.

No choice of law problem. The court reversed the district court’s refusal to certify a Rule 23(b)(2) class for unpaid work at defendants’ training facilities in Arizona and Florida because the lower court reasoned that choice of law issues undermined “cohesiveness” and therefore made injunctive and declaratory relief inappropriate. The Ninth Circuit concluded that the district court made the same errors in its 23(b)(3) choice of law analysis as it did in its refusal to certify the Rule 23(b)(2) class. No cohesiveness requirement exists for a proposed Rule 23(b)(2) class, the court noted, remanding for the district court to consider whether to certify the Rule 23(b)(2) class.

Predominance. The appeals court next had to determine “whether the common, aggregation-enabling issues in the case are more prevalent or important than the non-common, aggregation-defeating individual issues.” Concurring with the district court, the Ninth Circuit held that the players could meet the predominance requirement for the proposed California, Florida, and Arizona Rule 23(b)(3) classes relying on a combination of the burden-shifting framework established by the U.S. Supreme Court in Anderson v. Mt. Clemens and the “continuous workday” rule.

Mt. Clemens and representative evidence. In Mt. Clemens, the Supreme Court held in 1946 if an employer maintains inadequate time and pay data, and an employee “proves that he has in fact performed work for which he was improperly compensated” and “produces sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference,” then the burden “shifts to the employer to come forward with evidence of the precise amount of work performed or with evidence to negative the reasonableness of the inference to be drawn from the employee’s evidence.” In a later case, Tyson Foods v. Bouaphakeo, the Supreme Court held that a class of employees can use a representative sample to fill an evidentiary gap created by the employer’s failure to keep adequate records for purposes of class certification. In this case the players used a survey of minor league players as representative of hours worked.

Continuous workday rule. The continuous workday rule provides that once the workday is triggered, an employee performs compensable work throughout the rest of the day until the employee completes the last principle activity, whether or not the employee engages in work throughout that entire period. Thus, any activity which is “integral and indispensable” to principal activities, even if performed outside of a scheduled shift, triggers the beginning of the “workday.”

Inadequate survey? The defendants challenged the survey, arguing that it only asked about arrival and departure times at the ballpark and not what activities they performed; thus, they contended the continuous workday rule could not apply since the survey didn’t reveal when the workday began or ended. The defendants also asserted that variations in players’ arrival and departure times precluded a finding of predominance.

While recognizing some problems with the survey, the appeals court ultimately concluded that these problems were not enough to deny class certification. First, the court found, the defendants had a uniform corporate policy of not paying players for offseason duties or paying overtime to the California class, and that common corporate policies carry “great weight” for certification. In addition, the players put forth more than just the survey evidence to support the number of hours worked. Also, at the certification stage, the survey need not prove hours worked, but the standard is whether a reasonable jury could conclude that all of the evidence submitted was probative of hours worked.

FLSA collective certification. The court affirmed certification of the collective action for the minimum wage and overtime claims, finding that the members of the collective share a similar issue of law or fact material to the disposition of their FLSA claims—specifically, that they were not paid for work performed during spring training, extended spring training, or instructional training, and were not paid overtime.

Dissent. In dissent, Judge Ikuta disagreed with majority’s opinion on the Rule 23(b)(3) classes. Rather, the dissent agreed with the district court that consideration of plaintiffs’ claims on a classwide basis would be overwhelmed by individualized choice-of-law questions. She wrote that the majority’s rule, applying the law of the jurisdiction where the work took place, was contrary to the court’s precedent, burdened employees by removing the protection of the laws of their resident state while traveling for work, and would burden employers.

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