FLSA Collective Action Case Round-Up

By: Megan J. Muoio, March 9, 2015

The first quarter of 2015 has already seen a great deal of activity in the area of class action lawsuits brought by plaintiffs suing their employers under the Fair Labor Standards Act (FLSA). Three recent cases demonstrate the difficulties plaintiffs have faced under the collective action certification standard of the FLSA, which requires plaintiffs who opt in to the collective action to demonstrate they are similarly situated. Although there is no statutory test in the FLSA for determining whether plaintiffs are similarly situated, federal courts have developed a test for an initial determination that focuses on the plaintiffs’ factual claims such as job duties, geographic locations, employer supervision, compensation, and whether a common employer policy, practice, or plan allegedly violates the FLSA.

In Pullen et al. v. McDonald’s Corp. and Wilson et al. v. McDonald’s Corp., two companion cases both currently pending in federal district court in Michigan, the plaintiffs made an unsuccessful motion for conditional collective action certification under the FLSA, alleging that McDonald’s policies resulted in the employees receiving less than minimum wage for their hours worked. The employees alleged that McDonald’s had a nationwide policy to deduct the cost of employee uniforms from pay and to not pay workers for time spent waiting to clock in at the beginning of shifts or when coming back from breaks. The employees’ motion for conditional collective action under the FLSA was denied in September 2014. In February 2015, the plaintiffs resorted to making a motion for class certification under state law and sought discovery from McDonald’s in order to support their class certification allegations. Because FLSA collective action certification was denied, certification as a class is the employees’ final option for advancing their case. McDonald’s has opposed the class certification and resisted the production of discovery and the employees’ fight for class action certification continues to be an uphill battle.

In Goodman v. Burlington Coat Factory Warehouse Corp., the plaintiffs were conditionally certified as a collective class under the FLSA after the suit was filed in federal court in New Jersey in 2011. The plaintiffs had alleged that Burlington Coat Factory misclassified them as assistant store managers in a bid to exempt them from overtime wages to which they were entitled. Now that discovery has been completed, Burlington Coat Factory has filed a motion to deny final certification to the plaintiffs because Burlington Coat Factory argues that there is no similarity in the class of employees as to their job duties and whether they performed managerial functions. Although the employees claim that the more than 500 employees in the conditional class all had similar work experiences, the court may deny final class certification because of the lack of evidence of similarity between the employees identified by Burlington Coat Factory.

Finally, in Rouse v. Target Corporation, which was filed in federal district court in Texas on March 4, 2015, an employee who worked as an executive team leader in asset protection at Target has claimed that Target intentionally misclassified him as a managerial employee, thereby making him exempt from overtime pay in violation of the FLSA. The plaintiff claims that he was misclassified because non-managerial employees performed the same work, and seeks to have more than 1,800 similarly-situated employees opt in to the collective action under the FLSA. However, the plaintiff and the prospective class also face an uphill battle because Target was able to defeat a similar FLSA suit brought by an asset protection employee by convincing a federal district court in Illinois that the asset protection employees in question were managerial employees because they exercised independent judgment in strategizing and selecting cases for fraud investigations. Should the plaintiff be able to obtain conditional collective certification for opt-in plaintiffs under the FLSA in this case, there will undoubtedly be a final challenge to the collective certification after discovery has been completed.

Employers and employment law watchers will be tracking these cases and others that are filed in 2015 to see how collective action certifications under the FLSA are developing. Collective certification under the FLSA is important to plaintiff-employees who seek nationwide policy changes at large corporations and big damage awards on behalf of many employees. Employers faced with collective action claims, however, fight strongly against certification because of the potential for large damage verdicts and the massive legal fees associated with these cases. Whether the case is at the beginning stages as in the Rouse v. Target case, at the post-discovery final certification phase as in Goodman v. Burlington Coat Factory, or at a point where collective action has been denied but class certification under state law is sought as in the McDonald’s cases, the struggle over collective action under the FLSA can continue throughout the action and can be a costly situation for employers to manage.


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