Facts

Michelle Lou was a former employee of Ma Laboratories Inc. Ma Labs was a distributor of PC systems and components, owned by Abraham Ma.

Lou filed suit against Ma Labs on behalf of herself and similarly situated employees, claiming that Ma Labs violated the Fair Labor Standards Act.

Defendants moved to disqualify class counsel. At the time, plaintiff's counsel was also representing 553 employees in another case involving the same defendants, and substantially similar claims.

PLAINTIFF'S CONTENTIONS:
Lou asserted that Ma Labs violated wage and hour provisions of the FLSA by not paying its employees their lawfully required overtime wages. Ma Labs did this by improperly classifying its sales employees as exempt employees, despite their actual duties and responsibilities. Lou argued that the class was actually made up of nonexempt employees, meaning they were paid improperly.

She asserted causes of action for denial of overtime compensation, unlawful failure to provide off-duty meal periods, unlawful failure to provide off-duty rest periods, failure to furnish wage statements, unlawful failure to timely pay wages upon separation from employment, and unfair competition.

Plaintiff's counsel contended that it was fairly and adequately represent the interests of the putative Rule 23 and FLSA classes. Plaintiff's counsel contended that there would be no overlap.

DEFENDANT'S CONTENTIONS:
Ma Labs denied Lou's allegations, and asserted various affirmative defenses. They argued that Lou had failed to state a cause of action, was barred by the statute of limitations, lacked jurisdiction, and had already been paid all amounts she was due.

Defendants also argued that Lou's class counsel, Sanford Heisler LLP, could not fairly and adequately protect the interests of the class, and moved to disqualify them.

Result

The court denied Lou's motion for class certification, finding that class counsel could not fairly and adequately represent the interests of both he putative Rule 23 and FLSA classes. The court determined that the risk of counsel compromising one class for another would be intensified. As a result, the court left room for Lou to refile her claims after finding adequate replacement counsel.