Labor & Employment Law

Bad Records Are No Defense to Class Certification -- Harper v. 24 Hour Fitness

In opposing class certification employers frequently argue that identifying the class members will be prohibitively expensive or time consuming due to lack of records.  For example, it may be difficult to determine who was affected by certain commission terms, who worked overtime, or who did or did not take a full 30 minute meal break  on particular days.

In the recent case of Harper v. 24 Hour Fitness, the Second District Court of Appeal emphasized that difficulty in ascertaining class members is no defense where the problems stem from deficiencies in the employer's own recordkeeping.  

Harper involved a claim that 24 Hour's standard membership agrement violated certain consumer laws and was unconscionable.  The Defendant argued that many members had handwritten modifications to their form contracts and that it would be extremely difficult to determine who had such modifications and whther the changes should exclude them from the class.  The trial court found this persuasive and relied on this argument, in part, in deciding to decertify the class.  The Appellate Court reversed, however, found that this analysis was error.  The reviewing court noted in the process that a defendant "may not avoid class certification by comingl[ing] or fail[ing] to document" particular transactions.

Few businesses deliberately keep bad records to avoid a "paper trail" of potential misconduct.  But for those who might consider this a valid strategy, Harper v. 24 Hour Fitness serves as caveat that this may not be an effective strategy, at least not in the class action arena.             

Full post as published by California Labor & Employment Defense Blog on December 15, 2008 (boomark / email).