Proposed California Labor Law Class Action v. Nike to Remain in Federal Court

Los Angeles, CAA California labor lawsuit filed against Nike and other defendants alleging the retail chain violated California labor law over an alleged requirement by staff to purchase their own uniforms, will remain in federal court after a federal judge in US Court denied a motion to have the lawsuit returned to state court.

The California labor code lawsuit is Hamid v. Nike Retail Services Inc. et al., Case No. 8:17-cv-00600, in the US District Court for the Central District of California. Plaintiff Omran Hamid, the lead plaintiff in a proposed class action, asserts that a uniform policy maintained by Nike required store employees to wear Nike-branded attire during work hours. It is also alleged that employees were required to wear, and maintain “up-to-date apparel of each seasons’ product line.” The allegation is that employees were required to pay for this attire, by way of deductions from their wages.

According to California labor law, employers who require their employees to wear specific uniforms while on the job are required to provide, and maintain those uniforms. It is not to be the responsibility of the employee, and employees are not to assume the costs, according to language in California labor employment law.

The California labor lawsuit cites various claims against Nike Retail Services Inc. and a district director. Claims include illegal terms of employment and unlawful collection or receipt of wages due, amongst other alleged violations to the California labor code.

It is unclear as to why the defendants felt they could circumvent California labor laws, as they were alleged to have done with regard to the uniform issue. While Nike operates several retail outlets in the state, the company maintains headquarters and is based in the state of Oregon.

Hamid worked at a Nike retail location in San Clemente from October, 2015 until January of this year. He originally filed his California labor code lawsuit in California Superior Court, Orange County. Nike moved to remove the lawsuit to federal court in April, but Hamid wanted the lawsuit returned to state jurisdiction on grounds that, in his view most of the potential class members live in California – where the alleged harms are claimed to have occurred – and the district director named as a co-defendant in the lawsuit is also a resident of California.

However, last month US District Court Judge David O. Carter denied the remand, and has compelled the matter to remain in federal court. Amongst his reasoning is the fact that Nike Retail Services Inc. is based in Oregon, and the claims against the company are more numerous and compelling than the claims leveled at the California-based district manager.

Hamid had also referenced exceptions under the Class Action Fairness Act (CAFA) in support of his bid to have his California labor lawsuit moved back to state court. The plaintiff asserted exceptions identifying “local controversy” and “home state” under CAFA, applied to his case.

However, Judge Carter disagreed. “Plaintiff here is challenging a statewide policy, which strongly indicates to the court that the statewide management of Nike’s operations forms the basis of the allegations, and not the actions of any individual district director alone,” the order said, amongst other points supporting an order to retain the California labor lawsuit in federal court.