Class Actions and Collective Actions Under the FLSA

Class actions and collective actions can be an effective way to proceed with claims on behalf of a large number of individuals and can be an effective method to aggregate individuals’ small claims into one action. Whether to bring a class or collective action is a matter that should be discussed with an attorney. This article discusses what Class and FLSA Collective Actions are, as well as the benefits and disadvantages of Class and FLSA Collective Actions.

1. What are Class Actions?
Class action lawsuits are actions where one person sues on behalf of others who have been harmed under similar circumstances. In order for the person who brings the lawsuit, the plaintiff, to recover on behalf of others who have been wronged, the plaintiff must get the class he or she seeks to recover on behalf of certified as a “class.” In California class actions, a plaintiff usually obtains a list of all of the potential class members prior to class certification through an “opt-out” notice. An “opt-out” notice is a notice that is mailed to the prospective class members enabling them to return a postcard if they do not want their contact information disclosed to the plaintiff.

For cases in both state and federal court, class actions must be certified under Rule 23. The plaintiff must establish “(1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class.”[1]  In addition to satisfying Rule 23(a), the plaintiff must also satisfy one of the three Rule 23(b) categories. [2] If the plaintiff fails to certify the class, only the plaintiff will only be able to proceed and be able to recover their individual damages.

2. What are FLSA Collective Actions?
Instead of bringing a class action, a plaintiff can bring a collective action under the Fair Labor Standards Act (“FLSA”), to recover on behalf themselves and for employees who have been harmed. “A FLSA collective action is more accurately described as a kind of mass action, in which aggrieved workers act as a collective of individual plaintiffs with individual cases — capitalizing on efficiencies of scale, but without necessarily permitting a specific, named representative to control the litigation.”[3]

FLSA collective actions differ in the certification process. A FLSA collective action usually proceeds through a two-step certification process. First, the court decides whether to grant preliminary certification where as a result, a court determines whether to send out a notice to other potential collective action members. The standard is usually relatively easy to meet as the plaintiff is only required to show that, on its face, the complaint advances “substantial allegations” for preliminary certification.[4] In other words, the plaintiff must show that there are reasonable bases for concluding that his or her claims can be decided on a class wide basis.

If the court grants the first step of preliminary certification, the court will send out a court-approved notice to the potential collective action members. This notice notifies the potential collective action that they must actively opt-in in order to participate in the collective action.[5]  Those potential collective action members who opt-in to the collective action become parties to the action.[6] If a potential collective action member does not opt-in, he or she does not become part of the collective action.

After the plaintiff has had time to investigate and interview the putative collective action members, the defendant may move to decertify the FLSA collective action through the second step in certification process. There is presently a split in opinion in the Federal Courts on the standard for decertifying a collective action. There are two approaches to decertify a collective action.
Under the minority approach, the Court would see if the plaintiffs could satisfy the predominance requirements of Rule 23(b)(3). The Ninth Circuit (California’s Appeals Court) has refused to adopt this test.[7]

The majority approach, which the Ninth Circuit has adopted, is the “similarly situated” requirement. Many Courts use the “ad hoc” test in determining whether opt-in plaintiffs are similarly situated, thus whether to decertify a FLSA collective action. Under the ad hoc test, a court “applies a three-prong test that focuses on points of potential factual or legal dissimilarity between party plaintiffs.”[8]  Under the ad hoc test, a court looks at the “(1) disparate factual and employment settings of the individual plaintiffs; (2) the various defenses available to defendant which appear to be individual to each plaintiff; (3) fairness and procedural considerations”[9]

However, the Ninth Circuit has criticized the “ad hoc” test as focusing on the differences of the collective action plaintiffs rather than their similarities. Thus, the Ninth Circuit has clarified the ad hoc test and made it easier for a plaintiff to prevail if a defendant seeks decertification. Thus, under the ad hoc test the Ninth Circuit stated that a collective action could not be decertified “unless the collective mechanism is truly infeasible.”[10]

Thus, for example, in a wage and hour action, the collective action plaintiffs would be able to satisfy the “similarly situated” requirement, if the defendant had a uniform wage and hour policy that applied to all of the plaintiffs and caused the harm.[11]

3. The Pros and Cons of Class Actions and FLSA Collective Actions
Both, class actions and FLSA collective actions have their pros and cons. Because a class action usually requires potential class members to opt-out of it, a class action will likely be larger group of potential individuals, which could result in a larger judgment against the defendant. A class action, however, must meet Rule 23’s rigid requirements and if the action is not certified, the plaintiff will have spent significant resources in a losing battle at class certification and will only be able to pursue individual claims on behalf of himself/herself.

While FLSA collective actions have a less rigid standard to meet, the only people that can participate in them are those potential collective action members who opt-in to join the action. In order to opt in, the plaintiff must affirmatively consent to joining the action. Therefore, in FLSA collective actions, the plaintiffs must have diligent counsel to ensure as many additional plaintiffs affirmatively opt-in to the action. As a result of this, FLSA collective actions usually have a lower number of participants than a certified class action, which means the defendant will be exposed to liability but for a smaller amount. If the FLSA collective action is decertified, all of the opt-in plaintiffs could still bring all of their individual actions, which would be costly for the defendant to defend.

In many cases, there are overlapping federal and state law claims, so the plaintiffs will choose to proceed with a FLSA action for the federal claims and a class action for the state law claims. If you or someone you know believe you have a potential class action case, contact our experienced attorneys at Hogue & Belong today for a free and confidential consultation. [ai_phone href=”+1.619.238.4720″]619.238.4720[/ai_phone].



[1]           Rule 23(a)(1-4)

[2]           Rule 23(b)

[3]           Campbell v. City of Los Angeles, 903 F.3d 1090, 1105 (9th Cir. 2018)

[4]           Id. at 1109.

[5]           Id.

[6]               Id. at 1104.

[7]               Id. at 1111.

[8]               Id. at 1113.

[9]               Thiessen v. GE Capital Corp., 267 F.3d 1095, 1103 (10th Cir. 2001)

[10]               Campbell v. City of Los Angeles, supra at 1116

[11]              Id.

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