A California wage-and-hour case nearly two decades in the making is headed back to the trial court after an appeals court in May reversed a $43 million judgment against an employer, offering HR professionals a stark reminder of both the complexity of employee classification and the extraordinary cost of getting drawn into prolonged class litigation.
In Cortina v. North American Title Co., the California Court of Appeal ordered the case decertified as a class action and remanded the named plaintiffs’ individual claims for retrial. The court said the trial court improperly rejected the employer’s exemption defenses on a classwide basis and committed other procedural errors, including conducting an unauthorized reference proceeding. The trial court may consider a new motion to certify the previously certified exempt class on remand.
The decision comes 19 years after the original complaint was filed in 2007. The litigation involved approximately 700 current and former employees of North American Title Company (NATC), divided into classes of workers the company had classified as exempt and nonexempt.
After years of proceedings — including testimony from more than 230 class members — the trial court entered a judgment of roughly $43.5 million against NATC in 2022. More than half of that amount consisted of prejudgment interest.
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