The Most Feared Battle Waged in Litigation

As a result of decades of confusion over the certification methods employed in Section 216(b) actions, and with a paucity of consistent judicial precedent to guide them, state court practitioners have come to view federal court as tantamount to a forum non conveniens, due largely to the paradoxical result of attempting to litigate class issues (normally governed by the opt-out procedures of FRCP Rule 23) under the procedural opt-in scheme mandated by the FLSA and/or confusion over the degree to which district courts will apply the Rule 23 standards. This article seeks to summarize the development of district court opinions with regard to the requisite showing of commonality for imposition of court-sponsored notice in FLSA collective/class actions, with an emphasis upon the strategic use of plaintiff affidavits.

The FLSA's Opt-in Burden

The FLSA's Opt-in burden compels a lenient standard for certification. Unquestionably, 29 U.S.C. ' 216(b) is a powerful tool for curbing unlawful wage and hour practices. The successful claimant in such actions may recover unpaid regular and overtime wages, and an additional amount of liquidated damages equaling the amount of the wages recovered, legal or equitable relief, costs and mandatory attorneys' fees. Section 216(b) further provides that employees may seek reinstatement, promotion or other relief as the court deems proper for any violation of Section 215(a)(3) of that title. Notably, private rights of action may be maintained in such circumstances against any employer (including a public agency) in any federal or state court of competent jurisdiction. These forms of relief may be sought by any number of employees on behalf of other persons “similarly situated” (opt-ins) who file written consents to participate in the action.

Unlike FRCP Rule 23 actions seeking predominantly monetary damages or California state court actions (California Code of Civil Procedure ' 382), “similarly situated” persons are not bound by the outcome of FLSA actions (nor are the limitations periods on the filing of their actions tolled) unless and until they file written consents with the court (29 U.S.C. ' 256). Indeed, the filing of a consent to participate in an FLSA action is a jurisdictional matter. “[A] member of the class who is not named in the complaint is not a party unless he affirmatively “opts in” by filing a written consent-to-join with the court.” (Kinney Shoe Corp. v. Vorhes, 564 F.2d 859, 862 [1977], overruled on other grounds; Hoffmann-La Roche, Inc. v. Sperling, 493 U.S. 165 [1989]).

Liberal Standard

The unique burden of would-be litigants to affect their own joinder in FLSA collective/class actions, and the provision that the tolling of any particular plaintiff's limitations period does not occur until a consent is filed thereby, have led federal courts to adopt a liberal standard for granting certification motions. Since Section 216(b) does not provide guidance as to the meaning of “similarly situated,” and although there is yet to emerge any consistent standard from the various circuits on this point, district courts have justified adoption of a low threshold for certification on the basis that it will allow plaintiffs to achieve certification status earlier in the prosecution, if not immediately after filing of the complaint, thereby permitting unwitting plaintiffs discovery of the pendency of the action and the opportunity to toll their actions through filing of consents. Once having done so, these opt-ins do not participate fully in the case as the named plaintiffs do. As a representative action, the named plaintiffs prosecute the case on behalf of all claimants who have filed consents with the court.

In order to obtain FLSA class certification status, the plaintiff bears the burden of proving that an adequate number of class members will ultimately opt-in to the action, and that these class members are likely to satisfy the “similarly situated” standard of the particular federal tribunal. Despite a lack of consistent direction on this standard, it is now fairly clear to district court practitioners that even a de minimus amount of evidence will incline the court to permit issuance of notice of the action to potential class members, in turn producing an even more robust sized class. As was stated in Bonilla v. Las Vegas Cigar Co., “[w]hether the claims have general effect, and whether named plaintiffs can affirmatively demonstrate that there are other similarly situated potential plaintiffs who would opt in, are [superior factors] in determining whether the court should issue notice to potential plaintiffs, or permit the discovery of a list of potential plaintiffs” (Bonilla, 61 F.Supp.2d at 1139, n. 6.). As wage and hour practitioners look for new tools to redress broad-scale wage violations, the leniency of this recently developed FLSA standard will offer some refreshing clarity.

Conclusion

The seemingly irreconcilable approaches taken by some courts to whether Section 216(b) certification analysis should be tied to Rule 23 standards and the practical result of evidentiary leniency at the time of certification and decertification will each be addressed as this article continues in next month's issue of the Employment Law Strategist.

Part One of a Two-Part Article

The following is a primer on the “leniency” standard for FLSA actions, and its interplay with Rule 23 guidelines. Why do we need a primer? Well, if one were so disposed as to survey a sufficient number of well-regarded class action practitioners, the result of that inquiry would most assuredly be a virtual consensus that the quest for class certification is, to a targeted defendant, the most feared battle waged in litigation. This is particularly true in actions alleging overtime exemption misclassifications where, post-certification, the primary remaining issue of liability teeters on the defendant's ability to prove the exemption as an affirmative defense.

In California state courts, where we have litigated many such wage and hour class actions, the certification process is well established, as partly evidenced by a flurry of recent state trial court certifications. Yet while California State court opinions, such as the First District's decision in Bell v. Farmers Ins. Exchange , 87 Cal. App. 4th 805, 105 Cal.Rptr.2d 59 (2001), purported to look fondly toward the federal class action procedures articulated in FRCP Rule 23 for guidance, the certification prerequisites of near-identical wage and hour claims under the federal Fair Labor Standards Act (29 U.S.C ' 216) and the opt-in scheme for claims brought there under vary significantly between federal circuits and even among their respective district courts. Moreover, even those Rule 23 and state court practitioners who are comfortable navigating the waters of these varied legal standards may be disenchanted with the notion of pursuing wage and hour actions under Section 216(b) procedures once they grasp the enormous risk associated with pursuing costly and time-consuming class litigation, only to learn that few putative class members wish to join the action and/or that the victory of “certification” may quickly be hollowed by the near-assured subsequent filing by the defendant of a more-factually comprehensive, and frequently successful, motion for decertification.

As a result of decades of confusion over the certification methods employed in Section 216(b) actions, and with a paucity of consistent judicial precedent to guide them, state court practitioners have come to view federal court as tantamount to a forum non conveniens, due largely to the paradoxical result of attempting to litigate class issues (normally governed by the opt-out procedures of FRCP Rule 23) under the procedural opt-in scheme mandated by the FLSA and/or confusion over the degree to which district courts will apply the Rule 23 standards. This article seeks to summarize the development of district court opinions with regard to the requisite showing of commonality for imposition of court-sponsored notice in FLSA collective/class actions, with an emphasis upon the strategic use of plaintiff affidavits.

The FLSA's Opt-in Burden

The FLSA's Opt-in burden compels a lenient standard for certification. Unquestionably, 29 U.S.C. ' 216(b) is a powerful tool for curbing unlawful wage and hour practices. The successful claimant in such actions may recover unpaid regular and overtime wages, and an additional amount of liquidated damages equaling the amount of the wages recovered, legal or equitable relief, costs and mandatory attorneys' fees. Section 216(b) further provides that employees may seek reinstatement, promotion or other relief as the court deems proper for any violation of Section 215(a)(3) of that title. Notably, private rights of action may be maintained in such circumstances against any employer (including a public agency) in any federal or state court of competent jurisdiction. These forms of relief may be sought by any number of employees on behalf of other persons “similarly situated” (opt-ins) who file written consents to participate in the action.

Unlike FRCP Rule 23 actions seeking predominantly monetary damages or California state court actions (California Code of Civil Procedure ' 382), “similarly situated” persons are not bound by the outcome of FLSA actions (nor are the limitations periods on the filing of their actions tolled) unless and until they file written consents with the court (29 U.S.C. ' 256). Indeed, the filing of a consent to participate in an FLSA action is a jurisdictional matter. “[A] member of the class who is not named in the complaint is not a party unless he affirmatively “opts in” by filing a written consent-to-join with the court.” ( Kinney Shoe Corp. v. Vorhes , 564 F.2d 859, 862 [1977], overruled on other grounds; Hoffmann-La Roche, Inc. v. Sperling , 493 U.S. 165 [1989]).

Liberal Standard

The unique burden of would-be litigants to affect their own joinder in FLSA collective/class actions, and the provision that the tolling of any particular plaintiff's limitations period does not occur until a consent is filed thereby, have led federal courts to adopt a liberal standard for granting certification motions. Since Section 216(b) does not provide guidance as to the meaning of “similarly situated,” and although there is yet to emerge any consistent standard from the various circuits on this point, district courts have justified adoption of a low threshold for certification on the basis that it will allow plaintiffs to achieve certification status earlier in the prosecution, if not immediately after filing of the complaint, thereby permitting unwitting plaintiffs discovery of the pendency of the action and the opportunity to toll their actions through filing of consents. Once having done so, these opt-ins do not participate fully in the case as the named plaintiffs do. As a representative action, the named plaintiffs prosecute the case on behalf of all claimants who have filed consents with the court.

In order to obtain FLSA class certification status, the plaintiff bears the burden of proving that an adequate number of class members will ultimately opt-in to the action, and that these class members are likely to satisfy the “similarly situated” standard of the particular federal tribunal. Despite a lack of consistent direction on this standard, it is now fairly clear to district court practitioners that even a de minimus amount of evidence will incline the court to permit issuance of notice of the action to potential class members, in turn producing an even more robust sized class. As was stated in Bonilla v. Las Vegas Cigar Co., “[w]hether the claims have general effect, and whether named plaintiffs can affirmatively demonstrate that there are other similarly situated potential plaintiffs who would opt in, are [superior factors] in determining whether the court should issue notice to potential plaintiffs, or permit the discovery of a list of potential plaintiffs” (Bonilla, 61 F.Supp.2d at 1139, n. 6.). As wage and hour practitioners look for new tools to redress broad-scale wage violations, the leniency of this recently developed FLSA standard will offer some refreshing clarity.

Conclusion

The seemingly irreconcilable approaches taken by some courts to whether Section 216(b) certification analysis should be tied to Rule 23 standards and the practical result of evidentiary leniency at the time of certification and decertification will each be addressed as this article continues in next month's issue of the Employment Law Strategist.