This post is intended to provide the reader with citations to the Supreme Court and Third Circuit Court of Appeals opinions addressing the FLSA’s collective action device. The opinions are listed in alphabetical order and are followed by my brief commentary.
Before summarizing the opinions, however, it seems useful to reference the statute underlying collective actions. Specifically, Section 216(b) of the Fair Labor Standards Act (‘FLSA”) provides:
Any employer who violates the provisions of section 6 or section 7 of this Act shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages. . . . An action to recover the liability prescribed in the preceding sentences may be maintained against any employer (including a public agency) in any Federal or State court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated. No employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought. The court in such action shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney’s fee to be paid by the defendant, and costs of the action.
29 U.S.C. § 216(b) (emphasis supplied; irrelevant text omitted).
- Supreme Court Opinions
Epic Systems Corp. v. Lewis, 584 U.S. 497 (2018)
Collective action waivers in arbitration agreements do not violate the National Labor Relations Act by limiting workers’ ability to engage in “concerted activities.” Because such waivers have become commonplace, this 5-4 opinion prevents millions of employees from commencing or participating in collective FLSA litigation.
Genesis HealthCare Corp. v. Symczyk, 569 U.S. 666 (2013)
Reversed Third Circuit and held that FLSA plaintiff’s lawsuit was rendered moot by Rule 68 offer of judgment served before the plaintiff had moved for conditional certification of the collective and before any other individuals had opted-in to the litigation. Without going into much detail, the opinion “note[s] that there are significant differences between certification under [Rule 23] and the joinder process under [FLSA] § 216(b).” Id. at 70 n.1. Also, in an often-quoted passage, the Court observes that FLSA conditional certification “does not produce a class with an independent legal status;” rather, “[t]he sole consequence of conditional certification is the sending of court-approved written notice to employees.” Id. at 75.
Hoffman-La Roche Inc. v. Sperling, 493 U.S. 165 (1989)
This seminal opinion established that district courts play an important role in overseeing the manner in which employees learn about collective action lawsuits. It is the foundation upon which the Third Circuit’s “conditional certification” jurisprudence is built and is filled with observations regarding the public policy underlying the collective action device and the importance of employees receiving accurate, timely, and neutral notice of collective litigation.
Tyson Foods, Inc. v. Bouaphakeo, 577 U.S.442 (2016)
While technically decided under Rule 23 due to the presence of both state wage claims and FLSA claims, this opinion is frequently cited by plaintiffs seeking to defeat “decertification” motions in FLSA collective actions. The opinion contains an excellent discussion of why, in many wage and hour cases, class/collective litigation can be appropriate notwithstanding purported differences between the unpaid wages owed (or not owed) to individual employees. The Court explains that, where the employer has failed to maintain time records, damages can be calculated “as a matter of just and reasonable inference” and, in appropriate cases, based upon representative testimony and statistical sampling.
- Third Circuit Opinions
Camesi v. West Penn Allegheny Health System, Inc., 729 F.3d 239 (3d Cir. 2013)
Originating plaintiffs who voluntarily dismissed their lawsuit were not permitted to appeal district court order denying their motion for final certification of FLSA collective; this decision also contains a concise summary of the “two-step process” applicable to determining whether an FLSA lawsuit may proceed to trial as a collective action.
In re Citizens Bank, N.A., 14 F.4th 607 (3d Cir. 2021)
District court erred in “hybrid” class/collective action by deferring Rule 23 class certification ruling until after completion of collective FLSA trial; very good discussion of the “marked differences” between FLSA collective actions and Rule 23 class actions.
De Asencio v. Tyson Foods, Inc., 342 F.3d 301 (3d Cir. 2003)
District court overseeing FLSA collective action erred by exercising supplemental jurisdiction over class action claims arising under Pennsylvania Wage Payment and Collection Law because the state law claims raised “novel and complex issues” that were distinct from the FLSA claim; this decision also contains an excellent discussion of the events that led Congress to create the collective action device via the 1947 Portal to Portal Act.
Fischer v. Federal Express Corp., 42 F.4th 366 (3d Cir. 2022)
In a “mass torts” lawsuit entitled Bristol-Myers Squibb Co. v. Superior Court, 582 U.S. 255 (2017), the Supreme Court held that a California district court lacked personal jurisdiction over claims against a nonresident company brought by out-of-state plaintiffs whose claims did not “arise out of or relate to” the defendant’s contacts with the forum state. In Fischer, the Third Circuit held that this rule applies to out-of-state workers who opt-in to FLSA collective actions. Thus, “nationwide” FLSA collective actions essentially must proceed in the state where the defendant company is headquartered. Otherwise, the collective is limited to those employees who worked in the particular state where the lawsuit is filed.
In addition to the above, Fischer: (i) contains an excellent and important discussion of the differences between FLSA collective actions and Rule 23 class actions, including the different procedures applicable to settlements and (ii) characterizes the FLSA’s “opt-in” mechanism as a “species of joinder” and “a kind of mass action.” This is the furthest the Third Circuit has gone in equating an FLSA “opt-in” plaintiff to a “party plaintiff.”
Halle v. West Penn Allegheny Health System Inc., 842 F.3d 215 (3d Cir. 2016)
Third Circuit lacked jurisdiction to hear appeal of opt-in plaintiff whose claims were dismissed without prejudice due to “decertification” of FLSA collective. Like Fischer, supra, this opinion contains an excellent overview of the FLSA’s collective action device, including: (i) public policy rationale underlying collective actions; (ii) summary of the two-step “certification” process; (iii) characterization of the initial “conditional certification” as merely notifying workers of the lawsuit’s existence and their right to join; and (iv) clarification that opt-in plaintiffs are free to pursue individual FLSA claims in wake of “decertification.”
Karlo v. Pittsburgh Glass Works, LLC, 849 F.3d 61 (3d Cir. 2017)
Affirming district court’s “decertification” of FLSA collective based on the multi-factor test established in Zavala, infra. Good example of the types of arguments made by parties at the post-discovery, “decertification” stage of collective litigation.
Knepper v. Rite Aid Corp., 675 F.3d 249 (3d Cir. 2012)
Reversed district court’s decision that FLSA collective actions and Rule 23 class actions alleging state law wage claims are “inherently incompatible.” In other words, this opinion permitted the types of “hybrid” collective/class actions that have become commonplace in wage and hour litigation. The opinion contains a good discussion of the legislative history underlying the collective action device.
Lockhart v. Westinghouse Credit Corp., 879 F.2d 43 (3d Cir. 1989)
Affirmed the district court’s decision that ADEA collective action could proceed to trial collectively (although reverses on other grounds).
Lusardi v. Xerox Corp., 747 F.2d 174 (3d Cir. 1984), 855 F.2d 1062 (3d Cir. 1988), and 975 F.2d 964 (3d Cir. 1992)
These three opinions all deal with relatively technical appellate jurisdiction issues that can arise in collective litigation.
Martin v. Selker Brothers, Inc., 949 F.2d 1286 (3d Cir. 1991)
This lawsuit – brought by the U.S. Department of Labor – is not a class or collective action. However, the opinion is relevant to collective litigation because it confirms that, where the employer fails to maintain accurate timekeeping records, employees are merely required to prove their collective work hours “as a matter of just and reasonable inference.” This basic principle is frequently relied upon by plaintiffs in collective litigation and provides the legal foundation for using sampling and other representative evidence to prove damages.
Opalinski v. Robert Half Int’l Inc., 761 F.3d 326 (3d Cir. 2014)
Availability of collective action waiver in an arbitration agreement is a substantive “question of arbitrability” to be decided by the district court – rather than the arbitrator – unless the parties “unmistakably” provide otherwise.
Reich v. Gateway Press, Inc., 13 F.3d 685 (3d Cir. 1994)
This lawsuit – brought by the U.S. Department of Labor – is not a class or collective action. However, the opinion has some relevance to collective litigation because it affirms the district court’s use of “representative testimony” (only 22 of 70 covered employees testified) in determining the damages owed to the entire workforce. The Court observes that “not all employees need to testify in order to prove the [FLSA] violations or recoup damages” and explains that “the Secretary can rely on testimony and evidence from representative employees.”
Reinig v. RBS Citizens, N.A., 912 F.3d 115 (3d Cir. 2018)
Reverses district court’s decision certifying Rule 23 class action claims arising under state wage laws but refuses to exercise appellate jurisdiction over district court’s holding that FLSA collective members are “similarly situated” and can proceed to trial collectively. Here – as in the previously discussed Fischer, Halle, and Citizens Bank opinions – the Circuit emphasized the significant differences between class and collective actions.
Ruehl v. Viacom, Inc., 500 F.3d 375 (3d Cir. 2007)
This opinion primarily addresses the “single filing rule’s” applicability to an ADEA collective action lawsuit. In this context, however, the Court discusses the differences between class and collective actions and the factors to be considered in deciding whether the opt-in plaintiffs are sufficiently “similarly situated” to proceed to trial collectively. In Zavala, infra, the Circuit further refines these factors.
Sperling v. Hoffman-La Roche Inc., 862 F.2d 439 (1988), aff’d, 493 U.S. 165 (1989)
This opinion was affirmed in the Supreme Court’s seminal Hoffman-La Roche opinion, discussed supra. The Third Circuit opinion contains an excellent discussion of the legislative history underlying the collective action device. Then, the Circuit upholds – for the first time – the district court’s authority to oversee a “notice” process under which employees covered by a collective action can learn about the lawsuit and decide whether to join the lawsuit. In other words, this opinion endorsed the process that we now refer to as “conditional certification.”
Stone v. Troy Construction, LLC, 935 F.3d 141 (3d Cir. 2019)
As noted earlier, the FLSA provides: “No employee shall be a party plaintiff to any [collective] action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought.” 29 U.S.C. § 216(b). In this opinion, the Court recites the well-established rule that the FLSA’s limitations period is not tolled until the worker “opts-in” to the collective by returning and filing a consent form. Crucially, even the originating plaintiff must file a consent form.
Symczyk v. Genesis Healthcare Corp., 656 F.3d 189 (3d Cir. 2011), reversed, 569 U.S. 66 (2013)
The Circuit held that a Rule 68 offer could not be used to terminate a putative FLSA collective action. The Supreme Court disagreed and reversed. See Genesis Healthcare, supra. Notwithstanding, this opinion still has some insightful passages concerning the purpose and nature of FLSA collective actions and the “two-step” process applicable to determining whether employees are sufficiently “similarly situated” to proceed to trial.
Zavala v. Wal-Mart Stores Inc., 691 F.3d 527 (3d Cir. 2012)
This important opinion describes the factors that district courts should consider in deciding whether to “decertify” a collective action at the “second-stage” (i.e. post-discovery stage) of the litigation. The Court holds that the plaintiff bears the burden of proving by a preponderance of the evidence that the opt-ins are sufficiently “similarly situated” to proceed to trial as a collective. The Court then identifies the following, non-exhaustive factors for district courts to consider: “whether the plaintiffs are employed in the same corporate department, division, and location; whether they advance similar claims; whether they seek substantially the same form of relief; and whether they have similar salaries and circumstances of employment.”