By Meriel Kim, Gerald L. Maatman, Jr., and Jennifer A. Riley
Duane Morris Takeaways: In Raines, et al. v. U.S. Healthworks Medical Group, Case No. 19-CV-1539 (S.D. Cal. Aug. 16, 2024), Judge Dana M. Sabraw of the U.S. District Court for Southern District of California recently certified a class consisting of every applicant for a paid position who underwent a post-offer, pre-placement examination and allegedly received the employer’s health history questionnaire pursuant to Rule 23(a) and (b)(3). This case gives a warning to businesses acting as agents for employers in the on-boarding process.
Case Background
Under California’s Fair Employment and Housing Act (“FEHA”), Cal. Gov’t. Code § 12900, et seq, an employer can condition an employment offer upon the job application passing a pre-placement examination (“PPE”) only if the examinations are related to the job and consistent with business necessity. Gov’t Code 12940(e). In this case, Plaintiffs Kristina Raines and Darrick Figg, two applicants for jobs, filed a class action lawsuit alleging that the PPE involved “intrusive, highly offensive, overbroad, and unrelated” medical questions on a standardized health history questionnaire (“HHQ”), used by Defendant U.S. Healthwors Medical Group (“USHW”), an occupational health provider that acted on behalf of employers. Id. at 1.
After applying for a food service position, Plaintiff Raines allegedly answered all of the 150 questions on the HHQ and save for one she thought completely unrelated to her job duties. Id. The employer then allegedly revoked its employment offer to Raines because she refused to complete the medical examination. Id. at 3. Plaintiff Figg alleged that, like Raines, USHW directed him to complete the same HHQ for a volunteer position. Id. Figg answered all of the questions, and his employer ultimately hired him as an unpaid volunteer. Id.
In their complaint, Plaintiffs Raines and Figg claimed, individually and on behalf of putative class members, that USHW’s medical examinations: (1) violated the FEHA; (2) violated the Unruh Civil Rights Act, Cal. Civ. Code § 51, et seq.; (3) intruded on Plaintiffs’ right to seclusion; and (4) violated California’s Unfair Competition Law, Cal. Business & Professions Code § 17200, et seq. Id. Plaintiffs sought to certify a class under the FEHA against USHW consisting of 370,000 job applicants for both paid and unpaid positions who underwent a PPE and were subjected to USHW’s standardized HHQ at one of its approximately 78 facilities in California between October 23, 2017, and December 31, 2018. Id. at *4.
The Court’s Class Certification Ruling
The Court examined all prerequisites under Rule 23(a), including numerosity, commonality, typicality, and adequacy of representation. Id. at 6. The Court held that Plaintiff Raines met all of the prerequisites under Rule 23(a) but that Plaintiff Figg failed to satisfy the typicality requirement because he was not an applicant for a paid position and therefore did not attain employee status under the FEHA. Id. at 8.
The Court then examined the requirements under Rule 23(b)(3), which calls for two separate inquiries, including: (1) whether the issues of fact or law common to the class “predominate” over issues unique to individual class members; and (2) whether the proposed class action is “superior” to other methods available for adjudicating the controversy. Id. at 9. The Court found that Plaintiffs’ proposed class met both requirements and certified the class. Id. at 18.
In reaching its conclusion, the Court determined that: (1) USHW “administered the PPEs on behalf of and at the direction of employers;” (2) all class members received the same HHQ from USHW regardless of the duties or functions of the job conditionality offered; and (3) at least one question on the HHQ was not relevant to any job. Id. at 14-15. The Court held that, given such evidence, whether USHW acted on behalf of referring employers and engaged FEHA-related activities by administering a medical questionnaire could be adjudicated on a class-wide basis. Id. at *15.
The Court further ruled that Plaintiffs’ common evidence also addressed injury, causation, and damages because the alleged injury to class members was caused by their being subjected to overbroad and offensive medical inquiries from a standing HHQ in violation of § 12940(e). Id. Because Plaintiffs were pursuing only nominal and punitive damages, the Court disagreed that it would need to engage in thousands of individualized inquiries among class members to properly assess damages. Id.
Key Takeaways
This class certification ruling shows how a court can use the workers’ common evidence to resolve class-wide agency issue. Additionally, the massive number of potential class members pursuing only nominal and punitive damages convinced the Court to certify the class. The decision further implicates the potential hurdles faced by businesses acting as “agents” of referring employers in challenging putative class actions under the FEHA. Businesses acting as agents should carefully evaluate whether their practices are in compliance with FEHA as this ruling confirms that the FEHA’s definition of “employer” may include employer’s agents.