Litigation Trends Analysis
Courts May Be Turning the Tide on the Flood of FLSA Collective Actions
As employees continue to file large numbers of Fair Labor Standards Act (“FLSA”) collective actions and analogous class actions under state law, two federal appellate courts have issued recent decisions cautioning employees and their counsel to tread more carefully before filing such large lawsuits.
Recently, these FLSA claims are often brought as collective actions involving numerous employees and multiplying employers’ potential exposure on a rapid basis. The plaintiffs’ bar has increasingly has begun employing a shotgun approach when bringing these lawsuits—filing generic collective action complaints against as many employers as possible. However, recent decisions out of the United States Fifth and Sixth Circuit Courts of Appeals may cause the plaintiffs’ bar to rethink such “cookie cutter” filings.
In Forrester v. American Security and Protection Serv., LLC, a Sixth Circuit panel held that a former employee’s complaint did not describe the work she performed in sufficient detail to determine whether she should have received overtime pay. The former security guard alleged that she should she be paid for “shift-change duties” but provided no additional explanation as to what those duties were. The court held that, because the former security guard had not alleged that such work was an “intrinsic element” of her job, she failed to sufficiently plead her overtime claims and it dismissed her complaint. This decision suggests that, at least in the Sixth Circuit, certain FLSA claims may no longer be as likely to succeed on generic and conclusory allegations. Plaintiffs must provide some factual detail supporting their FLSA claims. Based on this precedent, employers may wish to consider engaging in early motion practice in advance of other proceedings when faced with an FLSA collective action.
In In re A&D Interests, Inc., a Fifth Circuit panel rejected collective action certification in a worker misclassification case because the workers had each agreed to arbitrate any dispute on an individual basis. In an FLSA collective action, notice to all other potential plaintiffs is sent out after conditional certification. Those potential plaintiffs can then “opt-in” to the collective action. Each potential plaintiff who opts in increases the employer’s potential exposure. However, the Fifth Circuit held that the district court should not have certified the collective action because each worker had agreed to arbitrate their claims on an individual basis. Even though the arbitration clause at issue only explicitly prohibited class actions, not collective actions, the clause still provided that all claims would be brought individually. Thus, such language precluded the workers’ participation in a collective action in federal court. The case illustrates how important it is to use carefully drafted arbitration clauses to reduce a company’s exposure to large class or collective actions.
In sum, as FLSA lawsuits continue to proliferate, some courts are starting to evaluate these claims more carefully. Employers should likewise take their preparations for, and defenses to, any eventual FLSA collective action equally seriously. Honigman’s Labor and Employment team is equipped to handle a variety of issues, including the types of cases identified here. Please reach out to us if we can be of assistance.
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