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Crab Addison Adds to Line of "Opt-Out" Class Action Privacy Notice Cases

The Second District Court of Appeal has further clarified the broad discovery rights that class action litigants enjoy. In Crab Addison v. Superior Court (2008) 169 Cal.App.4th 958, the employer's tactics, after a wage-and-hour class action was filed, included having employees sign forms indicating whether or not they wanted their personal information disclosed to third parties. Not surprisingly, many employees chose the privacy option. This, argued the employer, meant that the plaintiffs could not have access to such personal data as the putative class members' contact information, because the completion of those forms gave the employees a "heightened expectation of privacy as to their contact information."

The trial court weighed the privacy interests of potential class members against the compelling need for discovery of their names and contact information, and found that plaintiffs were entitled to the requested information subject to an ‘opt-out’ notice. The employer sought a writ of mandate directing the trial court to vacate the two discovery orders that pertained to the issue. The Court of Appeal denied the petition. The primary issue on appeal was whether Puerto v. Superior Court (2008) 158 Cal.App.4th 1242 applied to the case against Crab Addison (CAI).

There are two significant differences between Puerto and the instant case. First, in Puerto, the employer voluntarily disclosed the identities of the witnesses but sought to protect addresses and telephone numbers. Here, CAI seeks to protect identities as well as addresses and telephone numbers. Second, in Puerto there was no release form like the one utilized by CAI. We attach no great significance to the fact that CAI did not voluntarily disclose the identities of the witnesses whose contact information it sought to protect. As noted in Pioneer Electronics (USA), Inc. v. Superior Court [(2007) 40 Cal.4th 360], at page 373, “[c]ontact information regarding the identity of potential class members is generally discoverable, so that the lead plaintiff may learn the names of other persons who might assist in prosecuting the case. [Citations.]
...
This brings us to the key question in this case: the effect of the release forms. CAI argues that these forms gave their employees a heightened expectation of privacy in their contact information, requiring that the contact information be given greater protection and making an “opt in” notice procedure proper. We are unconvinced by this argument. ... Gentry also highlights the dangers of placing in the employer’s hands the responsibility for notifying employees of the pending litigation and requiring employees to opt in to the litigation. Current employees may decline to opt in to the litigation for fear of retaliation by their employer. This in turn could immunize the employer from liability for violation of statutory wage and overtime requirements. This would violate the public policy protecting employee rights. The public policy concerns expressed in Gentry weigh against enforcing a release form that may have the effect of waiving an employee’s right to notice of a pending class action lawsuit concerning the employer’s alleged violations of overtime and wage statutes. Gentry did not stop its analysis with public policy concerns, however. ... The language of the release forms was not sufficient to apprise employees that by checking the “no” box they were declining to have their contact information released to “plaintiffs seeking relief for violations of employment laws in the workplace that they shared.” (
Puerto v. Superior Court, supra, 158 Cal.App.4th at p. 1253.) The release forms stated that CAI “may be asked to provide such information in the context of legal proceedings, including class action lawsuits.” We do not believe that a lay employee reading this language would realize that the reference to “class action lawsuits” meant lawsuits intended to vindicate their rights, rather than lawsuits by third parties against CAI that would be of no benefit to the employees. In other words, any “heightened” expectation of privacy the employees may have does not extend to situations in which CAI is required by law to disclose their contact information, including in the course of litigation.

Furthermore, reading the note in the context of the release form as a whole, an employee reasonably would interpret the form to mean that checking the “no” box meant that CAI would not provide employee contact information to third parties seeking it for use “in the context of legal proceedings, including class action lawsuits,” unless compelled to do so by law. The trial court’s discovery order falls within this exception. Thus, the court followed Puerto and upheld the opt-out notice procedure.

The form, for what it's worth, reads as follows:

RELEASE OF CONTACT INFORMATION

From time to time, Joe’s Crab Shack (the “Company”) may be asked to provide your contact information, including your home address and telephone number, to third parties. The Company may be asked to provide such information in the context of legal proceedings, including class action lawsuits.

We understand that many employees may consider this information to be private and may not want it released. Accordingly, please indicate whether you consent to the disclosure of your contact information by marking the appropriate box.

‪___ No, I do not consent to the Company’s disclosure of my contact information to third parties.

___ Yes, I consent to the Company’s disclosure of my contact information to third parties.

___ I would like to be asked on a case-by-case basis whether I consent to the disclosure of my contact information to a particular third party, and my contact information should only be provided if I affirmatively consent in writing.

You can download the full text of Crab Addison here in PDF or Word format. A petition for rehearing is pending. A request for leave to seek a modification of the opinion was denied.

Unless we find something really interesting that we haven't seen before (perhaps a District Court or out-of-state decision), this is the last of the 2008 cases we'll be discussing. Next week, we'll start posting about the first half-dozen wage and hour cases of 2009.

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