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Class and collective actions raise myriad ethical issues.&nbsp; Many of these issues&nbsp;center on class communication issues and determining who is a client.&nbsp;Some relate to settlement tactics.&nbsp; Others, relating to conflicts of interest,&nbsp;may&nbsp;be so serious that they result in the class not being certified under the&nbsp;Rule 23 requirements of&nbsp;commonality, typicality, adequacy of representation, or predominance. For strategic reasons, some plaintiffs' attorneys may try to maintain large wage and hour cases, or a series of&nbsp;cases against the same defendant.&nbsp; On the one hand, doing so helps counsel take advantage of what may be a steep learning curve regarding the employer's operations, and may also facilitate the sharing of information among various groups of employees.&nbsp;&nbsp;Plaintiffs' counsel may&nbsp;also do so to maximize the pressure on the defendant to settle, but in doing so, may create both problems holding the class together and potential ethical concerns. A recent case highlights the fine line that exists between the desire to assert multiple claims against the employer and potential ethical violations.&nbsp;(See&nbsp;<a href="https://employmentclassactionreport.bakerhostetlerblogs.com/wp-content/uploads/sites/8/2010/11/McCauley-v-Family-Dollar.pdf">McCauley v Family Dollar.pdf</a>).&nbsp; The Family Dollar Store chain has been the subject of several wage and hour class and collective actions, one of which resulted in a sizable verdict involving the alleged misclassification of&nbsp;its store managers.&nbsp; (See&nbsp;<a href="https://employmentclassactionreport.bakerhostetlerblogs.com/wp-content/uploads/sites/8/2010/11/Morgan-v.-Family-Dollar-Stores-Inc.pdf">Morgan v. Family Dollar Stores, Inc.pdf</a>, 551 F.3d 1233 (11th Cir. 2008)).&nbsp; Most recently, two putative class actions were brought against it in federal court in Kentucky under the Kentucky wage and hour laws.&nbsp; The first was a claim asserting the the company's store managers were misclassified as exempt for overtime purposes.&nbsp; The second, brought two months later by the same attorneys,&nbsp;was by a&nbsp;group of hourly employees&nbsp;claiming off-the-clock time.&nbsp; Family Dollar store sought to disqualify the attorneys on the second case on the grounds that their representation of both classes presented real or potential conflicts of interest. On November 1, 2010, the United States District Court for the Western District of Kentucky agreed&nbsp;(See&nbsp;<a href="https://employmentclassactionreport.bakerhostetlerblogs.com/wp-content/uploads/sites/8/2010/11/Order.pdf">McCauley Order.pdf</a>) that the same attorneys could not represent both classes, for largely common sense reasons.&nbsp; In the second case, because the store managers actually supervised the hourly employees, it was their decisions as to directing their workforces that were being challenged.&nbsp; Further, those same managers would be receiving privileged information and would be potentially the most important witnesses for the defense to say that they did not require hourly employees to work without pay.&nbsp; Thus, because of their representation of the managers in the first case, the plaintiffs' attorneys would have access to privileged information and to witnesses they would ordinarily have to depose.&nbsp; Further, the managers themselves would be in a conflict situation because they might perceive the need to help "their" lawyers in the second case, potentially affecting their testimony.&nbsp; The court emphasized the lack of any evidence that any collusion had already occurred, but recognized that the risk and the appearance of impropriety were simply too great.&nbsp; It therefore disqualified the plaintiffs' attorneys on the second case. The decision did not affect their representation of the managers in the first case, nor did it dismiss the second case, which can continue with different plaintiffs' counsel. The bottom line: The same plaintiffs' firm cannot&nbsp;represent both employees and the managers who supervise them in class or collective wage and hour litigation.

Plaintiffs’ Attorney Disqualified in Class Action Due to Representation in Second Suit