Hubbard v. RCM Technologies, Inc.

Background

Rhonda Hubbard brought a proposed class action on behalf of non-exempt hourly employees employed by RCM Technologies (USA), Inc. in California. The asserted claims arose under California law and included unpaid overtime, unlawful business practices, and waiting-time penalties.

Hubbard challenged RCM’s policy of excluding weekly per diem payments from the regular rate used to calculate overtime. According to the complaint, the payments were based on hours worked rather than expenses incurred. Hubbard sought to represent employees who, during the relevant period, worked at least one workweek in which they received overtime and a weekly per diem or stipend.

RCM generally did not oppose class certification but reserved the right to seek decertification later. RCM did object to proposed notice language and asked that the notice disclose potential adverse tax consequences if the per diem payments were later treated as wages rather than expense payments.

Class Certification

The court applied Federal Rule of Civil Procedure 23. It found numerosity because the proposed class included more than 100 people who worked at locations across California and traveled to different areas for assignments.

The court found commonality because liability depended on common questions about RCM’s policies and practices for calculating overtime and whether California law required the per diem payments to be included in the regular rate. The related business-practices and waiting-time claims depended on the same central issues.

The court found Hubbard’s claims typical because she stated that she worked California travel-nurse assignments, received per diem payments conditioned on working a certain number of hours and prorated according to hours worked, worked overtime, and had the per diem value excluded from her overtime calculation.

The court also found adequacy of representation. Hubbard and her counsel represented that they had no conflicts with other class members and would prosecute the case vigorously. Finally, the court found that common questions predominated and that a class action was the superior method for resolving the dispute.

Class Notice

The court rejected RCM’s proposed wording referring to “harmful” or “adverse” tax consequences because that wording could discourage people with potentially valid claims from participating. The court also stated that any tax consequences might apply to employees paid on a per diem basis regardless of whether they opted out of the class.

The court denied RCM’s specific request for that wording but granted its more general request to modify the notice. The notice had to state that a successful lawsuit and the classification of any recovery might have tax implications, that recipients might wish to consult a tax professional, and that the court had made no findings about the topic.

Order

Judge Roger granted Hubbard’s motion for class certification. The certified class consists of all non-exempt hourly employees employed by RCM Technologies (USA), Inc. in California who, at any time within four years before the lawsuit was filed through the date of class certification, worked at least one workweek in which they were paid overtime and received a weekly per diem or stipend.

The court appointed Hubbard as class representative and Matthew B. Hayes and Kye D. Pawlenko of Hayes Pawlenko LLP as class counsel. The court denied in part and granted in part RCM’s objection to the proposed class notice. It approved the notice subject to specified revisions, required distribution by first-class U.S. mail, set a 60-day opt-out deadline from mailing, and ordered RCM to provide an agreed third-party administrator with class members’ contact information within 14 days. The order terminated Docket Number 30.