Avery v. TEKsystems, Inc.

Background

A certified class of TEKSYSTEMS, INC. recruiters alleged that TEKSYSTEMS improperly classified them as exempt from California wage-and-hour laws and therefore failed to pay overtime. The complaint also alleged violations involving timely payment of wages, wage statements, meal breaks, rest breaks, California’s Private Attorneys General Act, and California’s Unfair Competition Law (UCL).

The plaintiffs filed the action in California state court. TEKSYSTEMS removed it to federal court under the Class Action Fairness Act. The court previously certified a class of current and former California recruiters employed from January 28, 2018, through the final date of judgment. The plaintiffs then moved to sever the UCL claim and remand it to state court.

UCL Claim and Remand

The court explained that a federal court must have equitable jurisdiction—authority to decide an equitable claim—before it can reach the merits of such a claim. That authority exists only when the plaintiff lacks an adequate legal remedy for the same harm. The court concluded that the plaintiffs’ California Labor Code claims provided an adequate legal remedy for their unpaid-overtime allegations, even though those claims had a shorter limitations period than the UCL claim.

TEKSYSTEMS argued that the plaintiffs’ request for appropriate injunctive and equitable relief showed that they sought an injunction under the UCL. The plaintiffs denied pursuing UCL injunctive relief and agreed at oral argument to dismiss any such claims, if they existed, without prejudice and without leave to amend. TEKSYSTEMS did not waive its argument concerning the availability of an adequate legal remedy. Because TEKSYSTEMS did not argue for dismissal, the court granted the plaintiffs’ request to sever and remand the UCL claim to the San Francisco Superior Court.

Class Definition and Prior Orders

TEKSYSTEMS argued that the court’s lack of equitable jurisdiction also undermined its earlier orders certifying the class and granting the plaintiffs’ motion for partial summary judgment. The court noted that TEKSYSTEMS had not sought permission to file a reconsideration motion and had not raised equitable jurisdiction during briefing or argument on those earlier motions. The court stated that TEKSYSTEMS likely waived that objection.

The court nevertheless amended the class definition. It changed the class period’s starting date from January 28, 2018, to January 28, 2019, because recruiters whose employment ended before January 28, 2019, could rely only on the UCL’s longer limitations period for restitution. The amended class covers current and former TEKSYSTEMS recruiters employed in California from January 28, 2019, through the final date of judgment. The amended subclass covers class members who worked as recruiters on or after January 28, 2019, are no longer employed by TEKSYSTEMS, and have not been employed by TEKSYSTEMS for more than 72 hours.

The court stated that 52 of the 542 recruiters in the previously certified class would no longer be included. It ordered the parties to notify those 52 recruiters that their employment dates were no longer covered by the class and that the UCL claim, which might provide them a recovery, had been sent to the San Francisco Superior Court.

Disposition

The court GRANTED the plaintiffs’ motion to remand the UCL claim. It also amended the certified class definition and ordered supplemental notice. The order disposed of Docket No. 154.