A lawsuit, seeking class action certification for violations of the Fair Labor Standards Act (FLSA) and California law, made it to the U.S. Supreme Court and is now headed back to district court.

What happened. Three employees of Chinese Daily News, Inc. (CDN) filed suit against the company on behalf of themselves and similarly situated employees working at CDN’s San Francisco and Monterey Park (Los Angeles) locations, maintaining that they were required to work more than 8 hours per day and more than 40 hours per week. In addition, they argued that they were wrongfully denied overtime pay, meal and rest breaks, accurate and itemized wage statements, and penalties for wages due but not promptly paid upon their termination.

After the employees narrowed their class to about 200 nonexempt employees at CDN’s Monterey Park, California, location, the district court certified their FLSA claim as a collective action. Their state law claims were certified as a class action under Federal Rule of Civil Procedure 23(b)(2)—or, alternatively, under Rule 23(b)(3).

Next, the court held that CDN’s reporters were eligible for overtime under the FLSA, saying that they did not fall within the “creative professional exemption.” A jury awarded the employees more than $2.5 million in damages, and the district court entered summary judgment in favor of the employees.

The U.S. Court of Appeals for the 9th Circuit, which includes Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington, affirmed. However, the Supreme Court vacated the decision and sent the case back to the 9th Circuit for reconsideration in light of the Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), in which a class of about 1.5 million current and former female Wal-Mart employees alleged that they were discriminated against in pay and promotions.

What the court said. Based on the Wal-Mart decision, the 9th Circuit reversed the district court’s class certification under Rule 23(b)(2) regarding claims for monetary relief. The appeals court also vacated certain other findings, saying the district court must reconsider its analysis under Rule 23(a) to determine if “there are questions of law or fact common to the class” and under Rule 23(b)(3) to see if class certification was proper. Wang, et al. v. Chinese Daily News, Inc., U.S. Court of Appeals, 9th Cir., No. 08-55483 (3/4/13).

Point to remember: Employers must understand their obligations under federal and state wage and hour laws. In cases where federal and state laws conflict, the law most beneficial to the employee prevails.