Court of Appeal to Revisit Overtime Class Action Certification

The Ontario Court of Appeal recently decided it will hear the appeal in Brown v. Canadian Imperial Bank of Commerce, the Divisional Court’s decision affirming Strathy J.’s denial of certification in a proposed “misclassification” overtime class action which we blogged about in the spring. The leave decision represents an unexpectedly quick return of overtime class actions to the Court of Appeal following last year’s “overtime trilogy” (Fulawka, Fresco, and McCracken). In the trilogy, the Court of Appeal upheld certification in two “off the clock” class actions, but refused certification in McCracken which, like Brown, concerned allegations that a class of employees had been misclassified as “managerial” and therefore not entitled to overtime compensation. Many observers felt that McCracken could mark the end of “misclassification” overtime class actions in Ontario.

Notably, however, the leave decision comes against the backdrop of Justice Belobaba’s recent precedent-setting certification decision in Rosen v. BMO Nesbitt Burns. That marked the first time a “misclassification” class action was certified in Ontario, and was arrived at notwithstanding the Divisional Court’s decision in Brown and the Court of Appeal’s decision in McCracken. Justice Belobaba found that while the Divisional Court in Brown had concluded (“incorrectly,” in his view) that the proposed class before it failed to exclude employees who exercised managerial duties, the proposed class in Rosen was different. He found support for the plaintiffs’ submission that the sub-issues of employee authority, autonomy, level of responsibility and control over hours were “the same or very similar” (para. 22) across the class as defined. Justice Belobaba determined that the class members therefore had “sufficiently similar” job functions to enable a court to assess the managerial exemption under the Employment Standards Act, 2000, as a common issue and permitting the class to be certified, unlike the proposed class in McCracken.

The proposed class in Brown was modified following the unsuccessful attempt at certification before Justice Strathy. The revised class definition before the Divisional Court ostensibly excluded those class members who performed supervisory or managerial functions. The Divisional Court nevertheless found that the definition could still capture such employees, undermining the integrity of the class and the proposed certification.

Importantly, the leave decision will give the Court of Appeal an opportunity to clarify the potential inconsistencies between the reasoning in Brown and Rosen and signal whether or not predictions about the demise of “misclassification” class actions in Ontario were unduly premature.

Fresco Fulawka McCracken Ontario Court of Appeal overtime class action

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