Labor & Employment Law

Maintaing Parallel Federal And State Overtime Class Actions: You Can't Do It (Maybe)

By Mark E. Tabakman, Esq.

Many times when an employee or group of employees files a FLSA class action, the plaintiffs will file a state action, making the same allegations, i.e. unpaid overtime, but under a state wage-hour statute.  There have been a host of cases exploring the issue of whether these parallel actions can be maintained simultaneously.  The tension is that a FLSA action is an opt-in action, meaning in order to join (whether for the good or bad) the employee must affirmatively opt in.  A "regular" class action, such as those brought under a parallel state statute, are opt out actions, meaning everyone similarly situated (as determined by the court) is in, unless they affirmatively opt out and decide not to be a part of the case.

I believe that dual maintenance of these actions is not proper and such dual actions undermine the validity of the Fair Labor Standards Act and the specific procedures Congress enacted for the enforcement of this federal law.  Many federal judges have agreed.  For example, in Woodard v FedEx Freight East, Inc., decided February 19, 2008, the federal judge in Pennsylvania agreed that a companion state class overtime action to a federal overtime action was the "antithesis" of the FLSA collective action and undermined the FLSA.

The court noted that Congressional intent was to limit the number of participants in such collective actions to people with similar interests.  The prosecution of the companion state action would frustrate that Congressional intent.  The court rejected the argument that dual maintenance was proper as it would facilitate judicial economy and convenience.  Such considerations, ruled the court, cannot override a Congressional mandate.

There have been other courts that have allowed dual suits to go forward in this context.  I believe those courts are dead wrong.  How, for example, would the procedure of identifying class participants be accomplished.  Under a FLSA opt-in process, there is a time limit set for people to opt in and if they do not, they are foreclosed from doing so.  Under the dual maintenance process, this would not matter as those that failed to opt in would, essentially, be in anyway unless they deliberately opted out.  This is too incongruous and contradictory to believe that it could be handled efficiently and it further highlights the contradictions inherent in allowing both actions to continue at once.

I believe this issue will need to be decided by federal appellate courts and/or the United States Supreme Court.  In the interim, the defendant/employer should always make a motion to dismiss the state law overtime claim, as such a motion stands a good chance of succeeding and then all the employer is fighting is federal FLSA claim, which is the more dangerous of the two, all things considered.

Full post as published by Wage & Hour - Development & Highlights on March 14, 2008 (boomark / email).