Class Action Lawsuit Against Major League Baseball, Ninth Circuit Decision
Ellis & Winters
In the past five years, approximately two-thirds of companies faced at least one labor and employment class action, and within this category, companies overwhelmingly reported that wage and hour matters were of top concern. To defeat class certification by employees, companies commonly utilize two strategies. The first is showing that the employees’ claims are too distinct to be brought as a class. The second is arguing that the employees submitted inadequate evidence in support of class certification. Major League Baseball (MLB) recently employed these strategies in a claim brought against it by minor league players, and the Ninth Circuit was asked to call balls and strikes.
In Senne v. Kansas City Royals Baseball Corp., 934 F.3d 918 (9th Cir. 2019), thousands of minor league baseball players brought minimum wage and overtime claims against the MLB as a class. The minor leaguers were paid a total of $3,000 to $7,500 during the five-month season, during which they worked between fifty and seventy hours per week. For the remaining seven months of the year, the MLB effectively required attendance at spring training, extended spring training, and instructional leagues. However, players were not compensated for attendance. In their class action lawsuit, the minor league players argued that they should have received overtime pay during the season, and minimum wage for hours worked during training and instructional leagues.
The district court denied certification of two out of four proposed classes of minor league players for failure to meet the predominance requirement of Rule 23(b)(3). The parties cross-appealed the decision to the Ninth Circuit. A divided Ninth Circuit panel held that all four classes should have been certified. As a threshold matter, the court agreed with the district court that each class satisfied the four familiar elements required for class certification under Rule 23(a): (1) numerosity; (2) commonality; (3) typicality; and (4) adequacy of representation.
The court next analyzed whether the district court erred in finding that the classes did not satisfy Rule 23(b)(3)’s predominance requirement, under which the players must show that “questions of law or fact common to the class members predominate over any questions affecting only individual class members.” The Ninth Circuit observed that for the players’ minimum wage claims, the common issues in the case were: (1) whether the players qualified as “employees” of the MLB; and (2) whether the activities performed during training and instructional leagues constituted “compensable work.” The issue in the case was whether these questions predominated over individual issues, such as what activities each player actually performed while at the ballpark, and variations in the players’ arrival and departure times.
As evidence of predominance, the players submitted a survey in which they reported the average time they arrived at and departed from the ballpark. This survey, they claimed, served as representative evidence of hours worked and established that the issue predominated over individual questions. On the other hand, the MLB argued that the survey was not reliable and thus did not demonstrate a common issue concerning hours worked. Because players often spent time at the ballpark without working, the survey’s failure to ask which activities the players preformed at the ballpark rendered it useless. Moreover, the survey revealed significant variations in the players’ average arrival and departure times, and therefore required individualized inquiries.
The Ninth Circuit agreed with the players that the survey established predominance. It held that the survey could be admitted to prove the wage an hour claims on a class basis so long as a jury could conclude that the survey, in combination with other evidence, was probative of the amount of time the players spent performing compensable work at the ballpark. Moreover, while the survey demonstrated meaningful variations in players’ arrival and departure times, this did not preclude certification.
Before Senne, it was unclear what standard applied to evidence submitted in support of class certification in the Ninth Circuit. Under Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 131 S. Ct. 2541 (2011), district courts are required to “rigorously analyze” evidence submitted in support of class certification. However, Tyson Foods, Inc. v. Bouaphakeo, ___ U.S. ___, 136 S. Ct. 1036 (2016), held that in wage and hour claims, where the evidence would be “sufficient to sustain a jury finding as to hours worked if it were introduced in an individual action,” it should be admitted in support of class certification. The MLB argued that the Tyson exception did not apply, and Wal-Mart’s “rigorous analysis” requirement excluded the survey.
In Senne, the Ninth Circuit broadened the Tyson exception, creating a relaxed rule for the admissibility of class certification evidence in wage and hour class actions. Under Tyson, held the court, the district court must admit evidence unless “no reasonable juror could find it probative of whether an element of liability is met.”
Hoping for a comeback in the bottom of the ninth inning, the MLB petitioned for certiorari to the United States Supreme Court, arguing that the lower court’s decision would “make it radically easier to certify wage-and-hour classes—the single most prevalent kind of class action—in the Ninth Circuit than anywhere else in the country.” However, on October 5, 2020, the Supreme Court denied the MLB’s petition for certiorari, cementing the Ninth Circuit decision.
So, what does this decision mean for other companies facing wage and hour claims by employees? First, the Ninth Circuit’s decision, undisturbed by the Supreme Court, established a low standard for the admission of evidence to certify a class of employees in wage and hour claims. Whereas an employer might have previously argued that the evidence presented must withstand “rigorous analysis,” now, the evidence must simply be relevant. Second, the decision prevents companies from arguing, as did the MLB, that variations in employee’s arrival and departure times defeat the predominance requirement of class certification under Rule 23(b)(3). Ultimately, the decision has made it somewhat easier for employees to get on base in their wage and hour claims against employers.
Author: Carson Lane