Alvarez v. May Dep’t Stores Co., 143 Cal. App. 4th 1223 (2006)

Plaintiffs in this case are 56 current and former Area Sales Managers employed by May Department Stores who alleged that they were improperly classified as exempt administrative employees and that they were not paid statutory overtime that was owed to them. The trial court sustained without leave to amend May’s demurrer based on the doctrine of collateral estoppel. (This was the third class action filed by plaintiffs’ attorneys against May; in the two prior actions, filed in 1997 and 1999, the trial courts denied plaintiffs’ motions for class certification.) The issue here was whether collateral estoppel could bar this latest case since the other lawsuits were brought by other Area Store Managers who were not named plaintiffs in this particular action. The Court of Appeal agreed with the trial court and affirmed dismissal of the action based on collateral estoppel, holding the prior denial of class certification did not bar plaintiffs’ substantive right to bring a lawsuit, it simply precluded them from serving as representatives of other litigants in a class action such as this one. To hold otherwise would mean that “the losing class plaintiff could merely insert the name of a different individual to be the class representative, subject[ing] the employer to a revolving door of endless litigation.” Compare Aguiar v. Cintas Corp., 144 Cal. App. 4th 121 (2006) (trial court should have used subclasses rather than deny plaintiffs’ motion for certification of class action for violation of the Los Angeles Living Wage Ordinance).