DLSE may pursue a group misclassification action without investigating each employee individually

STATE OF CALIFORNIA PETE WILSON, Governor
DEPARTMENT OF INDUSTRIAL RELATIONS
DIVISION OF LABOR STANDARDS ENFORCEMENT
LEGAL SECTION
45 Fremont Street, Suite 3220
San Francisco, CA 94105
(415) 975-2060

H. THOMAS CADELL, JR., Chief Counsel

January 12, 1998

Re: Similarly Situated Employees

This is intended to respond to your letter of December 29,
1997, wherein you ask what the Division enforcement policy would be
in a situation where our investigation reveals that an employer has
erroneously placed a group of similarly situated employees in an
exempt classification.

Most of the opinion letters this agency sends contain language
to the effect that each exemption situation must be determined on
an individual basis and make clear that the Division does not offer
blanket opinions finding a group of employees exempt or non-exempt.

This is not to say, however, that in a situation where the
evidence shows that a large group of employees is being
misclassified that the Division would not bring an action on behalf of
all of the employees who are similarly situated without
specifically investigating the status of each individual employee.
Investigation of the status of each employee would be neither
prudent nor necessary and the limited resources of the Division
would not allow for such a waste of time and effort.

As with the view of the federal courts regarding the
application of exemptions to the Fair Labor Standards Act, it must
be remembered that it is the employer who must prove that the
exemption is applicable as an affirmative defense.1

1 See A. H. Phillips, Inc. v. Walling, 324 U.S. 490, 493, 65 S.Ct. 807, 808,
89 L.Ed. 1095 (1945); Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392, 80 S.Ct.
453, 456, 4 L.Ed.2d 393 (1960); Walling v. General Industries Co., 330 U.S. 545,
547-548, 67 S.Ct. 883, 884, 91 L.Ed. 1088 (1947); Mitchell v. Kentucky Finance
Co., 359 U.S. 290, 295, 79 S.Ct. 756, 759, 3 L.Ed.2d 815 (1959).

January 12, 1998
Page 2

The Division is not mandated to investigate every claim that
is filed nor is it mandated to bring an action to enforce every
violation it finds; however, assuming that the Division agreed that
a particular action were appropriate and the investigation reveals
that a substantial number of the employees allege that they are
subject to work rules or practices which clearly make them non-
exempt, the Division would bring an action in the name of all of
the employees in the classification. Of course, the action by the
Division, while it would inure to the benefit of the affected
employees, would be in the nature of a law enforcement effort
designed to insure that the employer did not gain an unfair
competitive advantage over other businesses as a result of the
misclassification.

The affirmative defense that these are exempt employees may be
raised by the employer regarding any of the employees, but this
would be a defense which the employer would have the burden of
proving.

I hope this adequately addresses the questions you raised in
your letter of December 29th. If I may be of further assistance,
please feel free to call.

Yours truly,

H. THOMAS CADELL, JR.
Chief Counsel