Hunton Employment & Labor Perspectives

The Ninth Circuit recently overturned a district court’s grant of class certification on a wage statement claim under California Labor Code §226 because there were no “real-world consequences” stemming from the alleged misidentification of the employer’s name on the wage statement. Lerna Mays, a former Wal-Mart employee, brought a putative wage and hour class action alleging various claims, including a claim that Wal-Mart violated Section 226 because her employer was Wal-Mart Stores, Inc., but her pay stubs listed “Wal-Mart Associates, Inc.” The district court granted certification of plaintiff’s wage statement claim, and Wal-Mart appealed.

The Ninth Circuit determined that plaintiff failed to demonstrate that she had Article III standing to bring her wage statement claim. In so holding, the court reasoned that Section 226 was established to protect concrete interests, such as ensuring that the employees are informed of their wages and are not short changed. In other words, it was not created to “[establish] procedural requirements as an end unto themselves.” Plaintiff argued that the alleged misidentification caused her confusion, but otherwise did not argue any “real-world consequences.” Moreover, there was no clear threat of harm from the alleged inaccuracy.

The Ninth Circuit’s decision is a welcome one for California employers, especially considering that Section 226 claims are nearly always included in most California wage and hour class actions. The Ninth Circuit noted that, although plaintiff’s claim might be successfully brought in state court, the burden of Article III standing blocked her from succeeding on the claim in federal court. California employers who are facing a California wage and hour class action in California state court should add this decision to the factors that they consider when deciding whether to remove a case to federal court.