Gattuso v. Harte-Hanks Shoppers, Inc., 35 Cal. Rptr. 3d 260 (2005)

Frank Gattuso and Ernest Sigala brought a class action on behalf of themselves and other employees of Harte- Hanks, seeking indemnification for expenses they incurred in using their personal automobiles in the discharge of their employment duties as outside sales representatives (OSR’s). Harte-Hanks presented evidence that its OSR’s were paid a higher base salary and commission rates than inside sales representatives in order to compensate them for their automobile expenses. The Court of Appeal affirmed the trial court’s determination that an employer can pay increased salaries or commissions instead of reimbursing an employee for the actual automobile expenses incurred – so long as the after-tax compensation fully indemnifies the employees for their expenses. Furthermore, the Court affirmed the trial court’s order denying class certification on the grounds that common legal and factual issues did not predominate, that plaintiffs’ claims were not typical of the class and that a class action was not a superior procedure to resolve the case. Cf. Burdusis v. Superior Court, 133 Cal. App. 4th 88 (2005) (employee could not challenge trial court judge under Cal. Code Civ. Proc. § 170.6 following remand from appellate court and order requiring reconsideration of motion to certify class in light of recent case law).