$15M Judgment Reversed Due To Flawed Statistical Sampling Approach To Class Action

In a significant victory for California employers, the California Supreme Court threw out a $15 million judgment in favor of allegedly misclassified employees. In Duran v. U.S. Bank National Association, a putative class of business banking officers sued U.S. Bank for unpaid overtime, claiming they had been improperly classified as outside salespersons. That exemption applies to employees who spend at least 50% of their time on offsite sales activities. Over U.S. Bank's objection, the trial court certified the class and proceeded to trial using statistical evidence based on 21 employees — 19 randomly selected employees and the 2 class representatives. On appeal, a unanimous supreme court rejected the established approach and reversed the $15 million judgment for the class. Employers can take away several key lessons from the decision: