FLSA collective action and Rule 23 state-law class action can proceed in same suit
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Friday, September 30, 2016

FLSA collective action and Rule 23 state-law class action can proceed in same suit

By Lorene D. Park, J.D. On interlocutory appeal, the Eleventh Circuit joined sister circuits in holding that an FLSA Section 216(b) collective action and a state-law Rule 23(b)(3) class action may be maintained in the same proceeding. It therefore reversed a lower court’s conclusion that the two types of actions were "mutually exclusive and irreconcilable" and remanded for further proceedings (Calderone v. Scott, September 28, 2016, Martin, B.). The plaintiffs filed suit against the county sheriff in his official capacity, alleging minimum wage and overtime violations of the FLSA and Florida Minimum Wage Act (FMWA). They claimed that they and other similarly situated employees performed off-the-clock work for which they were not paid. The district court granted conditional certification of a collective action under Section 216(b) for the FLSA claims but denied conditional Rule 23(b)(3) class certification for the FMWA claims. Because Section 216(b) requires plaintiffs to "opt in" to be class members; while Rule 23(b)(3) requires that plaintiffs "opt out" if they do not wish to be bound a judgment, the court concluded that the two types of actions were "mutually exclusive and irreconcilable." Section 216(b) and Rule 23(b)(3) are not "irreconcilable." Reversing, the Eleventh Circuit joined the D.C., Second, Third, Seventh, and Ninth Circuits in holding that an FLSA collective action and Rule 23(b)(3) state-law class action may be maintained in the same proceeding. Though the procedural rules governing the two types of actions are distinct, Section 216(b) and Rule 23(b)(3) are animated by similar concerns about the efficient resolution of common claims and they were not "irreconcilable." For one thing, the plain text of the FLSA does not indicate that a collective action and a state-law class action cannot be maintained at the same time. Indeed, Section 216(b) makes it clear that a collective action cannot coexist with an action brought by the Secretary of Labor, so Congress clearly knew how to separate FLSA collective actions from other types of actions, but there was nothing in the statute which would cause an FLSA collective action to preempt a Rule 23(b)(3) class action based on state law or vice versa. To the contrary, the FLSA has a savings clause stating that "No provision of this chapter . . . shall excuse noncompliance with any Federal or State law or municipal ordinance establishing [a higher minimum wage or a shorter maximum work week]." The appeals court also noted that, even if it had found the statutory text unclear (which it wasn’t), the FLSA’s legislative history indicated no congressional intent to disfavor state-law Rule 23(b)(3) class actions. Case relied on by lower court was distinguishable. The defendant’s remaining arguments were rejected. In reaching its decision, the district court did not look to statutory text, instead relying on a case that involved a different statute. Perhaps recognizing that, the defendant tried to "recast" the lower court’s reasoning as a fact-based inquiry. The appeals court was not swayed, though, because the district court explicitly relied on that inapposite case clearly concluded that "an FMWA class action is not superior to other available methods" for adjudicating the claims because "overlapping FLSA and FMWA class actions are ‘mutually exclusive and irreconcilable.’" Practical concerns no help to defendant either. The appellate court also rejected the defendant’s assertion that confusion over the two types of actions, including a notice listing both "opt-in" and "opt-out" claims, made them irreconcilable. As explained by the Seventh Circuit, it "does not seem like too much to require potential participants to make two binary choices: (1) decide whether to opt in and participate in the federal action; (2) decide whether to opt out and not participate in the state-law claims."

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