ASSESSING RISK IN FLSA COLLECTIVE ACTIONS
Corporate Counsel Section
69A?=; C%?89AB:C0CC-5B=?8A>C>;4=A>8BC=@41C*C69=?;C6A;1B=CC6A;1B=;C6@51A>7
Unlike a class brought
under Rule 23 of the Federal
Rules of Civil Procedure,
§ 216(b) classes proceed
on an “opt-in” basis.
B
usinesses — especially
those with enough
employees to warrant
attention from plaintiffs’
lawyers — are increasingly finding
themselves defending against
collective-action complaints alleging
violations of the Fair Labor
Standards Act (FLSA). Under
§ 216(b) of the FLSA, an employee
must give his consent in writing
to become a party to a lawsuit
alleging minimum wage or overtime
violations. Unlike a class brought
under Rule 23 of the Federal Rules
of Civil Procedure, in which all class
members remain part of the class
unless they opt out, § 216(b) classes
proceed on an “opt-in” basis.
It is important to consider several
factors when determining how
best to defend against a collective
action, as the procedural nuance
and variation in claims raised under
§ 216(b) do not lend themselves to
a one-size-fits-all approach.
The vast majority of courts have
adopted a two-step process for
deciding whether an action may
properly proceed as a collective
action under the FLSA. “Conditional
certification” — the first step in that
process — determines whether notice
will be sent by the court to potential
class members. A plaintiff ’s burden
at this stage is two-fold: (1) showing
that there is a factual nexus between
the manner in which an employer’s
policy affected the plaintiff and
the manner in which the policy
allegedly affected potential class
members, and (2) interest by
other potential class members
joining the lawsuit. Because of
the relatively lenient application
of this standard, conditional
certification is commonly granted.
Should the court grant
conditional certification, notice
of the lawsuit will be sent to all
potential class members offering
them a chance to opt in to the
litigation. Once the notice period
expires, the case enters the second
stage, known as “decertification.”
At the decertification stage, the
plaintiffs bear the burden of
showing that the opt-in plaintiffs
are similarly situated for purposes
of the FLSA and that the claims
present common issues of law and
fact worthy of trial collectively —
a much higher burden than what
is required at the first stage.
Because a motion for
conditional certification is often
difficult to defeat, the company
will need to have the ability to
tolerate the burdens (both financial
and time) of discovery and the
communication challenges created
by class-wide notice if it hopes
to have the case decertified at
the second stage. To evaluate
the likelihood of certification or
decertification, and to weigh the
Continued on page 39
1<2;?3?.>;??8697??,??4>5=?0=+/<-