Law Times

Page 8 September 1, 2014 • Law Times www.lawtimesnews.com How will Fulawka affect overtime cases? Courts may be more willing to certify following high-profile settlement By arshy mann Law Times er seven years of waiting, one of the high-profile overtime class actions has finally come to a resolution. In August, the Ontario Supe- rior Court of Justice approved what could be a $95-million set- tlement in Fulawka v. e Bank of Nova Scotia. e development makes it the first of a series of overtime class actions to reach a settlement. Fulawka began in 2007 and formed part of a trilogy of cases the Ontario Court of Appeal ruled on in 2012 in which it set out the ground rules for when the court would certify overtime class actions. e Supreme Court of Canada denied e Bank of Nova Scotia leave to appeal the certification decision in 2013, but the parties reached a settlement before a trial took place. e 16,000 class members will be able to make claims for unpaid overtime going back as far as 13 years. Monique Jilesen, a partner with Lenczner Slaght Royce Smith Griffin LLP, says that since none of the overtime cases has made it to trial, class ac- tion lawyers still don't have much in the way of guidance when it comes to rulings of fact. "ere's been no determination on the merits in any of them as to whether or not the companies are in com- pliance with the Em- ployment Standards Act because they're all certification cases," she says. "When you think about it, it's quite as- tounding, actually, that there's been litigation for all of these years and yet no determina- tion made on the mer- its with respect to any of them." e trend of over- time class actions began in the United States with a number of cases against large employ- ers, especially companies in the retail and food service indus- tries. In Canada, the cases have largely involved two categories of claims: misclassification and off-the-clock duties. e misclassification cases involved allegations that classes of people the company had deemed to be managers actu- ally did the work of employees and should therefore qualify for overtime. "It's one thing how an employ- er labels a group of employees and it's another what their du- ties and responsibilities actually consist of," says Gillian Hnatiw, a partner at Lerners LLP. e off-the-clock cases have to do with companies that have policies requiring employees to get permission from a manager to work overtime. "So plaintiffs said those poli- cies were not practical or fair and unlawful, and that was a common issue because if you had to stay another 15 minutes to finish helping a client, you couldn't seek preapproval from your manager on that but you ought to be entitled to the over- time," says Jilesen. e Ontario courts have generally been more willing to certify the off-the-clock cases because plaintiffs can point to a common policy that affected a group of employees. Along with Fulawka, which was pri- marily an off-the-clock case, the Court of Appeal also certified Fresco v. Canadian Imperial Bank of Commerce. e misclassification cases encounter more difficulty at the certification stage because the potential class members oen have a variety of job titles and re- sponsibilities, a fact that makes it more difficult to prove they share common characteristics. e courts have so far de- nied certification in two mis- classification cases: McCracken v. Canadian National Railway and Brown v. Canadian Imperial Bank of Commerce. In another, Rosen v. BMO Nesbitt Burns Inc., the court certified the action. "e evidence indicated that individualized assess- ments of the job duties and responsibilities of class members would be needed to deter- mine if they were prop- erly classified," wrote the then-Ontario chief justice Warren Winkler in ruling against the plaintiffs in McCracken. Hnatiw suspects de- fence lawyers may ap- proach overtime cases, especially the off-the- clock variety, with dif- ferent tactics in the future. "For a long time, the certification battle has been the seminal battle in any of these actions, and upon certification, the hope is that you'll move forward quickly to settlement," she says. "But I have heard rumblings that some corporations may be re-evalu- ating that strategy and instead of trying to resist certification with a scorched-earth approach, per- haps they'll be quicker to agree to certification on certain issues or on certain terms." e hope, she says, would be to reach better common is- sues by negotiation and then defend them on the merits since "it seems the court is more and more inclined to certify and at least allow these cases to clear that threshold test." e facts of the individual cases will still be a paramount consideration for the courts, but in matters where the circum- stances are similar to Fulawka, Hnatiw expects the courts to be more willing to certify. "If you have another case where a class of fairly homog- enous employees were the sub- ject of a fairly clear-cut policy, then you may see parties in the future spending less time fight- ing about certification and move on to the merits more expedi- tiously," she says. In light of the Fulaw- ka settlement, Hnatiw says com- panies should take a second look at their policies to avoid any pos- sible future litigation. "I think they need to think about how their overtime poli- cies work in practice and not just on paper," she says. "If your policy consists of a lot of red tape, you might want to re- evaluate that at this point because that red tape can act as an effec- tive deterrent to employees in obtaining what is their fair com- pensation for time worked." LT Companies should now take a second look at their overtime policies, says Gillian Hnatiw. Focus on class Actions www.kuretzkyvassos.com Tel: (416) 865-0504 w Kuretzky_LT_Apr7_14.indd 1 14-04-02 9:08 AM A

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