Labor & Employment Law Daily FLSA collective action conditionally certified, but only for in-state opt-ins
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Monday, August 17, 2020

FLSA collective action conditionally certified, but only for in-state opt-ins

By Brandi O. Brown, J.D.

Choosing sides in a question that has created a split among district courts around the U.S., district court concludes it cannot exercise personal jurisdiction over out-of-state opt-in plaintiffs.

In conditionally certifying a collective action by employees of a cellphone retailer under the FLSA, a federal district court in Pennsylvania has ruled that opt-in plaintiffs outside of the state will not be included in the action under Bristol-Myers Squibb. In so doing, the court joined other courts who have applied that decision, and its limitations with regards to specific personal jurisdiction, to claims under the FLSA. The court granted the plaintiffs’ motion for conditional certification of a collective action, but only for those employees who live or work in Pennsylvania (Weirbach v. The Cellular Connection, LLC, August 12, 2020, Wolson, J.).

Collective action filed. According to claims made by employees of the cellphone retailer under the FLSA, their managers regularly required them and similarly situated sales reps to participate in off-the-clock meetings, conferences, and group messages. They also had to complete work-related paperwork off-hours, as well as make bank deposits on behalf of the retailer. They estimated that they worked between five and ten unpaid overtime hours each workweek and that the employee did not provide a method by which they could record that time. Since the original complaint was filed, one plaintiff was added and 22 other individuals have filed opt-in notices. Those opt-in plaintiffs have come from different states around the country. The plaintiff moved for conditional certification of a collective action consisting of retail associates at any retail store throughout the U.S. who were not paid for overtime. Over arguments made by the employer, the court concluded that the employees made the modest factual showing required for conditional certification of a collective. However, it did so with one major scope-related caveat relating to personal jurisdiction.

BMS decision regarding personal jurisdiction. Noting that the conditional certification stage was the best time to tackle this scope-related question, the court considered whether a 2017 U.S. Supreme Court decision regarding personal jurisdiction should limit the potential pool of opt-in plaintiffs. The parties agreed that the court had specific jurisdiction over the employer with regards to the claims of the two named plaintiffs. They also agreed that it would not have specific personal jurisdiction over the employer to hear claims asserted only by out-of-state plaintiffs. But would it have specific jurisdiction over the employer to hear those out-of-state plaintiffs’ claims if they were joined with the in-state plaintiffs’ claims? In Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco Cty., the U.S. Supreme Court considered whether a California state court could exercise specific personal jurisdiction over a company when in-state and out-of-state plaintiffs joined to assert products liability claims and held that it could not, at least not with regards to the out-of-state plaintiffs’ claims.

Courts divided, but this one says it applies to FLSA collectives. Since the “BMS” decision, the court explained, district courts have split on what that decision means for nationwide FLSA class actions. Some courts have distinguished FLSA collective actions from the mass action that was at issue in BMS. However, this court found that no distinction existed. “Opt-in plaintiffs under the FLSA are no different from the out-of-state plaintiffs who joined the cases at issue in BMS,” the court opined. “They are real parties in interest who have joined with an in-state plaintiff to pursue claims based on similar conduct that occurred somewhere else.” The court rejected the idea that plaintiffs in mass actions, such as the one in BMS, and opt-ins were different in terms of their status as a “party” to the suit. Under the FLSA, employees become parties to the lawsuit once they opt-in, the court explained.

Congressional intent. The court likewise rejected other distinctions courts had drawn between the mass action involved in BMS and collective actions, as well as the argument that imposing a territorial limit on such cases would be at odds with Congress’s purpose in enacting the statute. It also contended that it was “significant” that Congress chose not to include a nationwide service of process provision in the FLSA, which it had done decades before in the Clayton Act. “The lack of a similar provision in the FLSA” the court explained “suggests that Congress intended to limit where nationwide actions can be brought.” Thus, the court concluded that Congress “did not intend to subject employers to nationwide collective actions wherever they had employees.” While the court acknowledged concerns expressed in BMS regarding states impinging on the sovereignty of other states with an interest in regulating the dispute, the court found it did not tip the scales. In this case the concern was not present, the court explained, because the only sovereign was the United States.

The court conditionally certified the collective action, but only for those employees who live or work in Pennsylvania.

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