Law Times

Law TiMes • May 7, 2012 NEWS Overtime class actions Certification denied in CIBC eligibility case E BY JULIUS MELNITZER For Law Times of the Ontario Superior Court of Justice has handed the plaintiffs' bar a major setback with his re- cent decision denying certifica- tion in Brown v. Canadian Impe- rial Bank of Commerce. The setback is particularly acute ven as the Ontario Court of Appeal ponders the fate of overtime class actions, Justice George Strathy conventional thinking in Brown. The test of whether employees were eligible for overtime, he not- ed, hinged on whether they were managers or supervisors. "The authorities support the But Strathy had little use for the conclusion that the determina- tion of whether a person exercises supervisory or managerial func- tions requires a fact-based analysis of the work actually performed by the employee, because Brown is an eligibility case, a category that many legal observ- ers regarded as more amenable to certification than so-called off-the- clock cases such as Fulawka v. Bank of Nova Scotia and Fresco v. Cana- dian Imperial Bank of Commerce. Both are currently on reserve by the Ontario Court of Appeal. Eligibility or misclassification cases are ones in which the class alleges the employer wrongly clas- sified it as ineligible for overtime. In off-the-clock cases, the primary issue isn't whether the employee is eligible for overtime but whether the employer recognized or paid for it. The conventional thinking has been that it's easier to establish com- monality, the primary battlefield of class action certification, in eligibil- ity cases. In 2010, Justice Paul Per- ell of the Ontario Superior Court certified such a case, McCracken v. Canadian National Railway Co. That matter involved supervisory personnel at the railroad. April 27 ruling. "The employee' sition in the management chain are not relevant considerations. What counts is what the employee actu- ally does, how they do it, and how much independence and authority they exercise in the environment in which they work." In other words, commonal- " wrote Strathy in his s job title and po- categorized in terms of their suitability for certification. "Even some courts have stated that the eligibil- ity actions are classic cases for certification, Brown demonstrates that this is true only where class members have the necessary de- gree of commonality, though says. courts, the Supreme Court of Canada, have all made it clear that categorical "Canadian including Patricia Jackson represented CIBC. she says. "Strathy went beyond the labels and job descriptions to the evidence and found that the com- monality wasn't there. " ity didn't necessarily exist merely because the employees shared similar titles. "Class members have little in class of analysts, investment advis- ers, and associate investment advis- ers employed by CIBC and CIBC World Markets who claimed to be eligible for overtime. But as Strathy saw it, deter- common but their names," he wrote. "The key issue of fact — namely, whether or not a person has managerial responsibilities — which is critical to the determina- tion of overtime eligibility, cannot be determined on a common basis. There is no suitable methodology to resolve that issue. The action simply will not work as a class action." Torys LLP' who represented CIBC in Brown, says the decision is important be- cause it debunks the notion that overtime class actions can be readily s Patricia Jackson, particular circumstances. The evidence simply didn't support the allegation that all members of the proposed class performed similar duties. Louis Sokolov of Toronto' mining whether the individuals in these categories had manage- rial responsibility required an examination of each employee' s Goldblatt Mitchell LLP, who's co- s Sack lead counsel in Fulawka, Fresco, and McCracken, says Brown emphasiz- es just how heavily fact-dependent all overtime class actions are. "The evidence on the certifica- " he ANNOUNCEMENT Brown involved a proposed " meet the preferable procedure re- quirement for certification. "The insurmountable impedi- Strathy also found that the case didn't minations of types of class proceedings should not be made in individual cases." As it turns out, deter- ment in this case, and the reason why the preferable procedure re- quirement has not been met, is that the issue of CIBC's liability to pay overtime to every class member is an individual issue, finding concerning the circum- stances of every class member and the individual application "It will require individual fact- " he wrote. of the relevant legal principles to those circumstances." Nor would case management resolve the shortcoming in the plaintiffs' litigation plan. "I agree with the defendants' submission that the plan provides no feasible method for dealing with the individual nature of the eligibility determinations that must be made for every member of the class," wrote Strathy. "The plaintiffs have failed to establish a realistic, efficient, and workable procedure for the resolu- tion of the central common issue of eligibility and the individual issues that will necessarily remain." But lawyer Kirk Baert, who acted for the plaintiffs, says the ruling doesn't represent the last word on Brown. "We will be appealing this de- cision on a number of grounds and have no further comment," he says. LT PAGE 3 tion motion will drive the result, which is entirely appropriate, THE DEFINITIVE RESOURCE FOR ABORIGINAL LAW IN CANADA NATIVE LAW JACK WOODWARD, Q.C. This landmark text offers the authoritative commentary of recognized Aboriginal law leader Jack Woodward, Q.C. 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