Some Quick Notes About the Differences Between Rule 23 Class Actions and Flsa Collective Actions

I just read the Second Circuit Court of Appeals' important decision in Scott v. Chipotle Mexican Grill, Inc., 954 F.3d 502 (2d Cir. 2020), which held, among other things, “that the requirements for certifying a class under Rule 23 are unrelated to and more stringent than the requirements for ‘similarly situated’ employees to proceed in a collective action under [FLSA] § 216(b).” Id. at 520. I think Scott certainly is going to be one of 2020’s ten most important FLSA decisions. Hopefully, the decision will help bring an end to employers’ misguided (but persistent) attempts to graft Rule 23 principles onto FLSA collective actions.

Reading Scott brings to mind another area in which FLSA collective actions are met with less stringent judicial oversight than Rule 23 class actions: Settlement Approval. Specifically, various courts have observed that “[t]he requirements for approval of a FLSA collective action settlement are less stringent . . . because persons who do not opt-in as parties to the FLSA collective action are not bound by the settlement.”  Acuna v. So. Nev. T.B.A. Supply Co., 324 F.R.D. 367, 379 (D. Nev. 2018); accord Bozak v. FedEx Ground Package System, Inc., 2014 U.S. Dist. LEXIS 106042, *7 (D. Conn. (July 31, 2014) (“the exacting standards for approval of a class action settlement under Rule 23 do not apply to an FLSA settlement under the collective action provisions of 29 U.S.C. § 216(b)”); Willix v. Healthfirst, Inc., 2011 U.S. Dist. LEXIS 21102, *13 (E.D.N.Y. Feb. 18, 2011) (“The standard for approval of an FLSA settlement is lower than for a Rule 23 settlement because an FLSA settlement does not implicate the same due process concerns as does a Rule 23 settlement.”); see also Prena v. BMO Financial Corp., 2015 U.S. Dist. LEXIS 65474, *1-2 (N.D. Ill. May 15, 2015) (explaining that approval of FLSA collective settlement does not entail Rule 23’s “two-step” process of preliminary approval followed by notice and final approval); Collins v. Sanderson Farms, Inc., 568 F. Supp. 2d 714, 719 (E.D. La. 2008) (“The primary focus of the Court’s inquiry in determining whether to approve the settlement of a FLSA collective action is not, as it would be for a Rule 23 class action, on due process concerns, . . . but rather on ensuring that an employer does not take advantage of its employees in settling their claim for wages.”).  Perhaps you will find these citations useful next time you seek approval of a “pure” FLSA collective settlement.  -PW

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