CLAUDIA WILKEN, District Judge.
Plaintiffs Gopi Vedachalam and Kangana Beri charge Defendants Tata Consultancy Services, Ltd. (TCS) and Tata Sons, Ltd., with breach of contract and violations of California's Labor Code and Unfair Competition Law (UCL). Plaintiffs now move for class certification and appointment of class counsel. Defendants oppose the motion for class certification, but do not oppose the motion for appointment of class counsel. Having considered the papers filed by the parties and their oral arguments at the hearing, the Court GRANTS in part Plaintiffs' motion for class certification, GRANTS Plaintiffs' motion for appointment of class counsel, and GRANTS Defendants' motion for leave to file a second sur-reply.
Tata Sons and TCS, a division of Tata Sons, are Indian corporations headquartered in Mumbai, India. TCS offers information technology services to clients located worldwide.
To serve its clients, TCS deploys its employees to client sites worldwide on temporary assignments, known as "deputations." Before an employee departs on a deputation, TCS and the employee undertake several steps. TCS first files a petition for a United States non-immigrant visa on behalf of the employee; in this visa petition, TCS provides a sworn statement to the United States government stating the amount of compensation to be paid to the employee in the United States. After a visa is obtained, it is TCS's policy that TCS and the employee enter into a deputation agreement (DA) and deputation terms agreement (DTA). According to Defendants, TCS has a "standard guideline" DTA, which they describe as a form with blanks that TCS was supposed to complete and have each deputed employee sign.
The standard DTA states in part,
According to Defendants, the blank space in section C was completed in one of four different manners: (1) $______; (2) $50,000; (3) $_______ ($50,000); or (4) $45,000 ($50,000).
Some deputed employees also signed another form referred to as the Authorization for Payroll Deductions (APDs). The APD contains an overall gross wage, as well as wages to be paid in India and in the United States. The APD also states certain deductions that the deputed employees authorized from their United States wages. For example, one APD executed within the class period states in part,
Smith Decl., Ex. BW.
Various policies and procedures governed deputations, several of which changed in July 2005. Before July 2005, TCS handled employees' federal and state income tax obligations, including setting the number of tax withholding exemptions claimed by employees and filing tax returns on employees' behalf. The number of tax withholding exemptions changed periodically for some employees. When TCS received a tax refund check for a deputed employee, TCS placed a stamp on the back of the check that read, "Pay to the order of Tata Consultancy Services, Limited," and sent the check to the employee with an "urgent memo" directing the employee to endorse it and return it to TCS. In July 2005, TCS changed its handling of employees' income taxes. It now requires its employees to file their own federal and state tax returns.
Before July 2005, TCS compensated deputed employees in the United States both by depositing funds into their accounts in India and by issuing them paychecks in the United States. When issuing paychecks in the United States, TCS deducted the amount of the deputed employees' Indian wages from their United States wages. TCS changed this compensation scheme in July 2005. TCS employees now earn only a gross salary, paid in the United States.
Plaintiffs initiated this lawsuit on February 14, 2006. On April 25, 2011, Plaintiffs filed this motion for class certification, in which they sought certification of two classes and one subclass. To prosecute their breach of contract claim, Plaintiffs sought to certify under Rule 23(b)(3) a national class defined as, "All non-U.S. citizens who were employed by Tata in the United States at any time from February 14, 2002 through June 30, 2005." Mot. at 2. In their reply, Plaintiffs further limit the national class definition to include only those "who were deputed to the United States after January 1, 2002." Reply, at 3. To prosecute their claims under California law alleging improper recoupment of wages, waiting time penalties, and inaccurate wage statements,
On July 13, 2011, this Court granted in part and denied in part Defendants' motion for partial summary judgment. The Court held,
On September 16, 2011, Defendants filed their opposition to Plaintiffs' motion for class certification.
On September 20, 2011, Plaintiffs filed a second amended complaint (2AC). In the 2AC, Plaintiffs remedied the deficiency as to their section 221 claim based on the deduction of Indian salary.
On November 3, 2011, Plaintiffs filed a revised reply. In their reply, Plaintiffs make clear that they are seeking certification to prosecute on a class-wide basis their claim that Defendants' deduction of deputed employees' Indian salaries from their American salaries violated California Labor Code section 221.
On December 2, 2011, Defendants filed a motion for leave to file a second sur-reply to address certification of the class to prosecute Plaintiffs' section 221 claim for deducting class members' Indian salary from their United States compensation. With their motion, Defendants submitted a proposed eight-page sur-reply.
The Court GRANTS Defendants' motion for leave to file a sur-reply. However, the Court will consider only those arguments in the proposed sur-reply that address certification of the California class to prosecute Plaintiffs' section 221 claim based on the deduction of Indian salary and that Defendants could not have previously made in opposition to certification of the national class to prosecute Plaintiffs' breach of contract claim based on the deduction of Indian salary.
Defendants seek to strike the declarations Plaintiffs submitted from putative class members, on the grounds that they are "cookie cutter" declarations made without the declarants' personal knowledge, that they contradict the declarants' deposition testimony, and that eight declarants were not produced for depositions.
"On a motion for class certification, the Court makes no findings of fact and announces no ultimate conclusions on Plaintiffs' claims" and therefore "the Court may consider evidence that may not be admissible at trial."
Defendants also seek to strike eight specific declarations on the basis that Plaintiffs did not make the declarants available for depositions. In support of their argument, Defendants only cite
Accordingly, Defendants' request to strike is DENIED.
Plaintiffs object to the report and supplemental report of Defendants' expert witness Bernard Siskin and to Defendants' 2006 internal audit examining DTAs executed between 2000 and 2005. Defendants have addressed Plaintiffs' objections in their first sur-reply.
Plaintiffs object to Dr. Siskin's initial report on the basis that it required no expert skill and contains errors and legal conclusions unhelpful to the Court and which the expert is not qualified to make. Defendants respond that Dr. Siskin's report contains statistical analysis for which he is qualified and that his statistical summary is helpful to the Court. In his report, Dr. Siskin reviews a sample of DTAs that Defendants provided to Plaintiffs and provides an opinion that the typed $50,000 figure was a "sample figure" and there was "no common, consistent or reliable information about what U.S. compensation was promised to a TCS employee." The report also has data tables where Dr. Siskin displays how frequently the blanks in DTAs were completed in various ways and how the compensation amount compares to the amount of compensation stated in visa applications.
The Court SUSTAINS in part and OVERRULES in part Plaintiffs' objections to Dr. Siskin's report. The Court will consider the data summaries that Dr. Siskin created, and will take into account the purported mistakes that Plaintiffs point out in determining how much weight to accord them, and in comparing them to the corresponding data summaries prepared by Plaintiffs. However, the Court excludes Dr. Siskin's opinions. In his report, Dr. Siskin does not explain the basis for his opinions. He does not demonstrate that he is an expert in contract interpretation or determining whether a particular contract term was a sample or intended term. He appears to base his opinions on several factors: that the figure is "in parentheses,"
Plaintiffs also object to Dr. Siskin's supplemental report, filed on October 26, 2011, two days before Plaintiffs' reply deadline. In this report, Dr. Siskin attempts to reconcile some of his data summaries with those created by Plaintiffs, using an Excel document that Plaintiffs provided to him on October 17, 2011. The Court SUSTAINS Plaintiffs' objection to the supplemental report to the extent Dr. Siskin puts forward the same opinions as in his original report and DENIES Plaintiffs' objection to the extent it pertains to the data summaries themselves.
Plaintiffs also object to the 2006 Internal Audit of DTAs and other documents, on which Defendants rely to argue that many class members did not enter into DTAs. Plaintiffs state that Defendants cannot locate seventy-five percent of the DTAs that were examined in the audit and, thus, Plaintiffs cannot verify or challenge its findings. Plaintiffs also assert that Defendants have "improperly concealed and withheld the audit from discovery for years," by disclosing it for the first time with their opposition and not turning it over in initial or revised disclosures or in response to document requests and Court orders. The Court DENIES Plaintiffs' objection to the 2006 Internal Audit but will consider Plaintiffs' arguments in determining the amount of weight to accord this evidence.
Plaintiffs seeking to represent a class must satisfy the threshold requirements of Rule 23(a) as well as the requirements for certification under one of the subsections of Rule 23(b). Rule 23(a) provides that a case is appropriate for certification as a class action if
Fed. R. Civ. P. 23(a). Rule 23(b) further provides that a case may be certified as a class action only if one of the following is true:
Fed. R. Civ. P. 23(b). Plaintiffs assert that the national and California classes qualify for certification under subdivision (b)(3).
Plaintiffs seeking class certification bear the burden of demonstrating that each element of Rule 23 is satisfied, and a district court may certify a class only if it determines that the plaintiffs have borne their burden.
Defendants concede that they deputed 13,121 employees to the United States between February 14, 2002 and June 30, 2005. Opp. at 2. Plaintiffs have submitted evidence that there were at least 6,244 California class members as of March 2010. Hutchinson Decl. ¶ 77, Ex. 19, 5. Defendants do not dispute that both the national and California classes meet the numerosity requirement. Accordingly, the Court finds that Plaintiffs have satisfied this requirement.
Rule 23 contains two related commonality provisions. Rule 23(a)(2) requires that there be "questions of law or fact common to the class." Fed. R. Civ. P. 23(a)(2). Rule 23(b)(3), in turn, requires that such common questions predominate over individual ones.
The Ninth Circuit has explained that Rule 23(a)(2) does not preclude class certification if fewer than all questions of law or fact are common to the class:
Plaintiffs contend that there are numerous common questions of fact and law concerning Defendants' alleged illegal employment practices, including the interpretation of the standard compensation clauses in the form DTA entered into by all class members, whether Defendants had a policy or practice of requiring deputed employees to sign over their tax refund checks to Defendants, and whether Defendants had a policy or practice of deducting the Indian salary of deputed employees from their American salaries, rather than paying deputed employees both salaries. Plaintiffs cite a number of cases involving form contracts, in which courts have found that the commonality requirement was met.
Plaintiffs present evidence that, in all of the earnings statements Defendants produced for the class period, Defendants deducted the Indian salary from the American salary, Shaver Decl. ¶ 8, and Defendants do not argue that they did not have a policy and practice of deducting class members' Indian salary from their United States salary. Instead, Defendants assert that this case does not meet Rule 23(b)(3)'s commonality provision, because no form contract exists, there is no policy or practice of requiring class members to sign over their tax refund checks, and there is no policy or practice of providing inaccurate wage statements. Defendants also argue that there is no common interpretation of the purportedly ambiguous contract language. Because Defendants repeat many of their arguments in disputing that the predominance requirement is met, the Court will address those arguments in its discussion of predominance.
Defendants argue that, even though their own policies required that Defendants enter into a DTA with each employee prior to a deputation, many putative members of the national class did not enter into any "form contract" and, thus, they do not share common questions as to whether such a contract was breached. Defendants point to several sources to support their contention that some class members did not enter into the form DTA contracts.
First, Defendants point to a 2006 internal audit, which they say demonstrates that they did not consistently use DTAs, because between 2000 and 2006, only "62% of TCS employees deputed to the United States entered into complete DTAs." Mukherjee Decl. ¶ 9. The Court finds that this audit does not provide persuasive evidence that Defendants did not consistently use DTAs during the class period. The audit encompasses substantial time periods both before and after the class period for the national class, and Defendants provide no evidence which would support that the thirty-eight percent of TCS employees without "complete DTAs" were deputed within the class period. Instead, Plaintiffs offer evidence that, of the small fraction of files that Defendants can now locate from the audit, over forty percent were from 2006, after the end of the national class period. Furthermore, for the time period in the audit before the start of the class period, which was approximately one-third of the time covered by the audit in total, Defendants did not yet use DTAs for deputed employees. Further, the audit summary does not state that the thirty-eight percent of deputed employees without complete DTAs did not enter into a DTA with Defendants at all; instead, it indicates that thirty-eight percent of the deputed employees entered into a DTA that was not in "total compliance." Mukherjee Decl. ¶ 9, Ex. A. This included, for example, a DTA missing the date or the employee number.
Defendants also assert that documentary evidence proves that many of the putative class members who submitted declarations did not have DTAs. They state that, "out of the 35 declarants made available by Plaintiffs for deposition, only 12 of them had DTAs" that can now be located, even though Defendants acknowledge that additional declarants testified that they had signed DTAs. Opp. at 16. Defendants appear to base their arguments on the number of DTAs that they were able to locate in their own records, excluding those of the two named Plaintiffs.
Finally, Defendants assert that the deposition testimony of six declarants establishes that they did not sign DTAs and imply that the testimony contradicts information in some of their declarations. The Court is not persuaded that the deposition testimony establishes that the putative class member declarants did not sign DTAs during the class period.
Defendants also argue that the DTA was not a form contract because of variation in how the blank was completed in the section of the DTA entitled, "Compensation in the United States," quoted above, and because the interpretation of the agreement could require consideration of extrinsic evidence. However, the DTA is a form contract drafted by Defendants and the executed DTAs are identical in regards to almost every material term, including the provision stating that the employees would be paid a United States salary "in addition to" the amount they are paid in India and the reference to "gross compensation."
Defendants rely heavily on
Thus, the Court finds that Plaintiffs have satisfied their burden to meet the commonality requirement.
Rule 23(a)(3)'s typicality requirement provides that a "class representative must be part of the class and possess the same interest and suffer the same injury as the class members."
Defendants' arguments against typicality overlap substantially with their arguments against commonality and predominance. Defendants do not dispute that they acted in the same way toward Plaintiffs and the other putative class members or that Defendants applied common policies to both. Instead, they argue that named Plaintiffs and the DTAs that they signed are not typical of the class because there are no form contracts shared by all class members. The Court addresses this argument in discussing the commonality and predominance requirements.
Defendants also argue that Plaintiff Beri is not typical of the class, because Defendants may be able to develop a mutual mistake affirmative defense against her regarding the amount of compensation proven. However, this does not defeat typicality. First, the availability of this defense is speculative at this point; Defendants do not assert that they have any evidence in support of this defense, but rather state that they will develop the defense through additional discovery. Opp. at 21. Plaintiff Beri maintains that she herself was not mistaken about the additional compensation amount. Defendants have not argued that they will be able to prove a unilateral mistake defense. This defense would not be unique to Plaintiff Beri; Defendants claim that they will assert the mutual mistake defense against other class members, though again they make this claim in a speculative way. Further, even if mutual mistake rendered the compensation term ambiguous, Defendants drafted the contract, so the ambiguous term would be construed in favor of Plaintiff Beri and the other class members.
Thus, the Court finds that the interests of the named Plaintiffs are reasonably co-extensive with the absent class members and that the typicality requirement has been met.
Rule 23(a)(4) establishes as a prerequisite for class certification that "the representative parties will fairly and adequately protect the interests of the class." Fed. R. Civ. P. 23(a)(4). Defendants do not dispute Plaintiffs' assertion that they satisfy the adequacy requirement, and the Court finds that Plaintiffs have met their burden on this prong.
"The predominance inquiry of Rule 23(b)(3) asks whether proposed classes are sufficiently cohesive to warrant adjudication by representation. The focus is on the relationship between the common and individual issues."
To assert a cause of action for breach of contract, a plaintiff must plead: (1) the existence of a contract; (2) the plaintiff's performance or excuse for non-performance; (3) the defendant's breach; and (4) damages to the plaintiff as a result of the breach.
Plaintiffs argue that common issues will predominate, because the issue central to this claim is the interpretation of specific provisions in a form contract applicable to all class members. Plaintiffs' breach of contract claim is premised on three separate types of violations: (1) that Defendants deducted class members' Indian salaries from their American salaries, even though the contract stated that the American salary would be "in addition to" the Indian salary; (2) that Defendants required class members to sign over their tax refunds; and (3) that Defendants did not pay class members the specific amount of additional United States compensation that they were contractually obliged to pay.
Defendants argue that individual issues would predominate in determining their liability under the first type of violation, because some class members authorized Defendants to deduct their Indian wage from their gross wage. Under California law, any deductions not otherwise authorized by state or federal law must be "expressly authorized in writing by the employee." Cal. Lab. Code § 224. Thus, Defendants must have written authorization of such a deduction. Defendants argue that some class members signed APDs in which they authorized the deduction of their Indian salaries from their United States wages. However, these APDs do not demonstrate that individual issues will predominate for several reasons. First, while the specific monetary amounts and formatting of the forms differ, the APDs are uniform in their material terms and, thus, the determination of whether class members who signed the APDs authorized the deduction of their Indian salary from their United States salary can be made on a class-wide basis.
Second, contrary to Defendants' contentions, neither the two APDs produced by Defendants from within the class period, nor the APDs from outside the class period that they proffered, demonstrate that class members authorized this deduction. Defendants argue that, because the APDs show that wages paid in the United States are calculated by subtracting the Indian salary from the deputed employee's "Gross Wages," the employees authorized the deduction of their Indian salary from their United States compensation amount.
Defendants also argue that individual issues predominate as to the second type of violation, because "there is no uniform policy or practice regarding tax refunds." Opp. at 24-25. Defendants claim that the Court would have to hold mini-trials to determine whether each individual employee signed a tax refund check over to Defendants in a given year. However, Defendants' Rule 30(b)(6) witness, Ramakrishnan Venkataraman, testified that, during the class period, Defendants' policy and practice was that "when the tax refunds are received, they have been sent to the employee with a request that the tax refunds are signed and sent back to the company." Hutchinson Decl. ¶ 7, Ex. E, Tr. 223:9-12. He also agreed that Defendants' "practice" was to mark "the back of deputed employees' tax refund checks with a stamp that read, "Pay to the order of [Defendants]."
Defendants argue that individual issues will predominate as to the third type of violation, because there is no form contract in that there were variations in how the blank in the "Compensation in the United States" section was or was not filled in. Defendants argue that these variations create ambiguity and mean that individual inquiries will need to be conducted to ascertain how much additional compensation Defendants had promised to each class member in order to determine if Defendants breached this obligation.
Defendants rely primarily on
For the remaining DTAs, Defendants argue that there is ambiguity in the amount of compensation promised, which would necessitate individualized inquiries into the intent of the parties to ascertain the intended amount. These DTAs have compensation fields completed in the following three manners: (1) ______;
Extrinsic evidence is only admissible if contract terms are ambiguous. Under California law, the interpretation of a contract involves a two-step process.
Defendants argue that all contracts that fall into the second and third category (approximately forty-two percent of the sampled DTAs) are ambiguous, because the typed $50,000 is a sample amount, not the amount that the parties intended as compensation. Defendants do not proffer persuasive evidence that $50,000, when typed, is a sample amount. Defendants cite only Dr. Siskin's conclusory declaration. However, neither Defendants nor Dr. Siskin demonstrate that he is an expert in contract interpretation or in determining whether a particular contract term was a sample or intended term. Neither has offered evidence of any scientific methodology at all, let alone a reliable and valid one, that would allow a statistician to determine that a compensation amount entered on a contract did not accurately reflect what was promised in that contract, even though it appeared there. Dr. Siskin also substantially reduced any persuasive force that his declaration may have had by testifying in his deposition that, for a particular DTA with which he was presented, he did not believe $50,000 was a sample amount.
Defendants also argue that some unknown fraction of contracts in the second and third category may be rendered ambiguous because they may present evidence that class members signed other documents stating a different compensation amount. The only such documents that Defendants allude to are APDs. However, Defendants do not present evidence that the compensation amounts in the APDs ever differed from those in the corresponding DTAs. Defendants also argue that they may present evidence that some class members did not believe that $50,000 was the correct amount of their additional compensation, even though this was the only figure shown in the DTA. In support, Defendants assert that some class members' visa petitions had a different compensation amount than that on their DTAs and that certain class members testified that they thought they would be compensated the amount in their visa petitions. However, this argument does not demonstrate that individual issues will predominate for a variety of reasons. First, Defendants do not offer credible evidence that the terms in the deponents' visa petitions differed from those in their DTAs.
Further, as previously recognized, the Court will construe ambiguous terms against Defendants, as the drafting parties. Thus, if there were evidence of ambiguity in the DTAs in the second and third categories, the Court must take into account that Defendants drafted all the documents signed by the class members, introduced any ambiguity into the documents, and were in a superior bargaining position to the class members at the time that the documents were signed.
Plaintiffs concede that there is ambiguity as to the compensation term for the class members with DTAs that are completely missing a number—less than fifteen percent of the sample of DTAs produced, according to the data summaries prepared by both parties—and for class members without an DTA that can be currently located. It is not clear what percentage of the putative class falls into the latter category. Defendants point only to two specific sources of extrinsic proof, both documents that contain some figure for the amount of gross salary: an APD, which some class members signed, and the visa petitions, which Defendants filed on behalf of each deputed employee. Opp. at 9, 23-24.
Accordingly, the Court finds that Plaintiffs have met their burden to demonstrate that issues for the breach of contract claim common to the national class predominate over issues affecting only individual members.
California Labor Code section 221 provides, "It shall be unlawful for any employer to collect or receive from an employee any part of wages theretofore paid by said employer to said employee." "`Wages' for this purpose `includes all amounts for labor performed by employees of every description, whether the amount is fixed or ascertained by the standard of time, task, piece, commission basis, or other method of calculation.'"
Defendants argue that Plaintiffs cannot prove the intended compensation amount on a class-wide basis. However, proof of total compensation is not relevant to this claim, which simply requires proof that Defendants deducted their Indian salary from their United States salary, that Defendants required class members to sign over their tax refund checks and that class members did not give express authorization for these deductions.
Defendants contend that some declarants signed APDs in which they gave Defendants express authorization to take deductions from their wages. Opp. at 28. While this may be true, these declarants did not expressly authorize Defendants to keep the over-withheld tax deductions or to deduct their Indian salary from their United States salary. Thus, the APDs do not provide proof that individual issues will predominate.
Accordingly, Plaintiffs have met the predominance requirement for their section 221 claim predicated on unlawful collection of tax refunds and deduction of Indian salary.
California Labor Code section 226(a) mandates, in pertinent part, "Every employer shall furnish each of his or her employees. . . an accurate itemized statement in writing showing (1) gross wages earned, . . . (4) all deductions, provided that all deductions made on written orders of the employee may be aggregated and shown as one item, (5) net wages earned . . . ." Section 226(e) provides, "An employee suffering injury as a result of a knowing and intentional failure by an employer to comply with subdivision (a)" is entitled to certain statutory compensation for each pay period in which the violation occurred and an award of costs and attorneys' fees.
Plaintiffs argue that Defendants violated section 226 by (1) inaccurately reporting the number of tax exemptions for class members; and (2) inaccurately reporting the gross and net incomes of class members by failing to disclose class members' payments to the company in tax refund checks and the money that Defendants deducted for class members' Indian salary.
Defendants contend that section 226 does not require them to list tax exemptions on the wage statements. Opp. at 29. In their reply, Plaintiffs do not contend that section 226 requires that exemptions be accurately reported on wage statements, and instead argue that "inaccurately reporting tax exemptions . . . resulted in inaccurate deductions of Class members' salary for federal and state taxes," which is a violation of section 226. Reply, at 23. However, while Plaintiffs have alleged that Defendants commonly changed class members' exemptions, Plaintiffs have not submitted proof that these changes were incorrect or resulted in inaccurate withholding that was common to the California class. Plaintiffs primarily rely on the declaration of Anne Shaver, in which she summarizes changes in exemptions found in a small number of sets of earnings statements produced by Defendants.
However, to the extent that Plaintiffs' section 226 claim is predicated on Defendants' failure accurately to report gross and net wages and deductions, by failing to reflect class members' payments to the company in tax refund checks and the money that Defendants deducted for Indian salaries, the predominance requirement has been met. Plaintiffs argue that this can be shown through the same common proof as the breach of contract and section 221 claims, addressed above. Defendants respond that the wage statements accurately show the net pay to the class members; however, the fact that wage statements showed the amount on the pay checks is irrelevant to Plaintiffs' arguments that Defendants paid deputed employees an incorrect amount. Defendants also argue that Plaintiffs cannot show the proper gross compensation through common proof; this is also irrelevant, because if Plaintiffs prove that deputed employees were improperly required to pay Defendants back their wages, the wage shown on the statements would be inaccurate regardless of amount. Finally, relying on
Accordingly, the Court finds that Plaintiffs have met their burden to establish predominance for their section 226 claim predicated on Defendants' failure to account for class members' payments to the company in tax refund checks or the Indian salary deduction, but not for Defendants' inaccurate reporting of the number of tax exemptions.
California Labor Code section 201(a) provides, "If an employer discharges an employee, the wages earned and unpaid at the time of discharge are due and payable immediately." California Labor Code section 203 provides that employees "not having a written contract for a definite period of time" who quit employment are entitled to payment of wages either at time of quitting if they have given seventy-two hours previous notice or within seventy-two hours thereafter if they have not given such notice. Section 203 further provides, "If an employer willfully fails to pay . . . in accordance with Sections 201, 201.5, 202, and 205.5, any wages of an employee who is discharged or quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the wages shall not continue for more than 30 days."
Plaintiffs allege that Defendants have violated Labor Code sections 201 through 203 by failing properly to compensate deputed employees at the time of discharge for: (1) the Indian wages that Defendants deducted from their United States wages; (2) the wages that Defendants required deputed employees to sign over to them through the tax refund checks; and (3) the amount of unpaid additional compensation promised in the DTAs. Because these violations are predicated on the breach of contract and section 221 claims, Plaintiffs assert that common questions predominate over individual questions for the same reasons.
In response, Defendants again argue that Plaintiffs cannot establish the amount of compensation that class members were promised through common proof. This is addressed above, and is not relevant to all of the theories of liability. Defendants also argue that common questions do not predominate, because Defendants may be able to file counter-claims against some class members who "absconded from TCS and did not fulfill their post-deputation obligations." Opp. at 30.
However, "the existence of counterclaims . . . will not usually bar a finding of predominance of common issues." 2 Newberg § 4:26. Defendants have not filed any counter-claims, have not identified any actual putative class members who have absconded and have not provided an estimate of how many class members may have done so. As Plaintiffs point out, counter-claims against most class members would be barred by the four year statute of limitations. Defendants have not cited any cases to support the proposition that mere speculation about possible counter-claims will bar certification.
Thus, Plaintiffs have satisfied their burden as to predominance of common issues in their waiting period penalties claim to the same extent as with the underlying violations.
California's Unfair Competition Law (UCL) prohibits any unlawful, unfair or fraudulent business act or practice." Cal. Bus. & Prof. Code § 17200. The UCL incorporates other laws and treats violations of those laws as unlawful business practices independently actionable under state law.
Defendants' only argument that class action treatment is not superior is that class members "who were deputed to the U.S. in multiple years" would likely have claims worth "tens of thousands of dollars" and, thus, class members have sufficient monetary incentive to bring individual suits. Opp. at 31. Notably, Defendants do not argue that all putative class members would have what they characterize as "large" claims. There is evidence in the record that some class members were deputed to the United States for less than a year during the class period.
Further, Plaintiffs have argued that many class members fear retaliation from Defendants if they file individual suits and that many class members currently reside in India, which would pose substantial barriers to bringing individual actions. Defendants have not disputed these arguments.
Thus, the Court finds that Plaintiffs have demonstrated that class treatment is superior to litigating individual cases.
Rule 23(g)(1) of the Federal Rules of Civil Procedure provides in part:
Fed. R. Civ. P. 23(g)(1).
Plaintiffs represent that their counsel, the law firms of Rukin, Hyland, Doria & Tindall, LLP (RHDT) and Lieff, Cabraser, Heimann & Bernstein, LLP (LCHB), have invested significant time and resources to investigating and developing the legal claims in this case thus far, that they are seasoned and experienced in handling class actions of this nature, that they are knowledgeable of the relevant law, and that they will continue to commit ample resources to representing the class. Plaintiffs have submitted declarations and other evidence in support thereof.
Accordingly, the Court GRANTS Plaintiffs' motion for appointment of their counsel as class counsel.
For the foregoing reasons, Plaintiffs' motion for class certification (Docket No. 185) is GRANTED IN PART and DENIED IN PART. The Court certifies a national class, defined as "all non-U.S. citizens who were employed by Tata in the United States at any time from February 14, 2002 through June 30, 2005 and who were deputed to the United States after January 1, 2002." This class may prosecute Plaintiffs' breach of contract claims. The Court certifies a California class, defined as "all non-U.S. citizens who were employed by Tata in California at any time from February 14, 2002 through June 30, 2005 and who were deputed to California after January 1, 2002."
The parties shall appear for a case management conference to set future deadlines in this case on Wednesday, April 25, 2012 at 2:00 p.m. The parties shall submit a joint case management statement by April 18, 2012.
IT IS SO ORDERED.
In his supplemental declaration, Dr. Siskin corrected the percentage obtained by dividing eighty-two by 194 from fifty-nine percent to fifty-eight percent. Siskin Suppl. Decl. ¶ 3. He also reassigned two DTAs to a different category and assigned eleven DTAs to categories, which he stated he had previously been unable to do.
In their analysis of the same sample, Plaintiffs calculated that thirty-three percent of the 172 DTAs executed within the class period had a compensation term other than $50,000 in the relevant blank. Shaver Decl. ¶ 11.
Thus, the parties agree that approximately a third or more of the DTAs contain an unambiguous additional compensation amount.
