Courts have long recognized that class actions are not available under the FLSA because it has its own collective action procedure contained in section 16(b) of the Act, 29 U.S.C. section 216(b). Section 16(b) permits a collective action to proceed if the members of the putative class are “similarly situated.” Among other differences from Rule 23, the FLSA’s collective action provisions require that claimants affirmatively “opt into” the litigation.
Many states, of course, have their own versions of the FLSA, but most do not echo its enforcement provisions. Thus, in most such jurisdictions, plaintiffs can assert a state law wage and hour claim through the vehicle of a Rule 23 class action. Any number of tactical decisions can drive the decision whether to assert state law claims, including the available damages, statute of limitations, or counsel’s preference for the Rule 23 or section 16(b) standards.
But what if the plaintiffs want to bring a section 16(b) collective action and a Rule 23 state law class action in the same case? Does that mean that the putative class members will receive confusing notices telling them that they must opt into the federal claims/do nothing on the state claims versus do nothing on the federal claims/opt out of the state?
Courts are divided, but a pair of recent cases holds that because the two procedures are incompatible, and because the state law claims would interfere with the federal scheme. These courts have found that state law Rule 23 class cannot be combined with a collective action claim and that, in fact, the differences are so vast that it may even be necessary to dismiss the state law claim outright. Most recently, in Pittman v. Westgate Planet Hollywood Las Vegas, LLC.pdf, the plaintiffs, who worked in various positions for the Planet Hollywood Towers in Las Vegas, contended that their employer did not pay them for overtime hours. The court conditionally certified the class under the FLSA, but following the filing of opt-ins, they sought to add a Rule 23 class action under Nevada state law. The court found that the plaintiffs could not pursue both class and collective action claims because it had already conditionally certified the class under the FLSA, and the state law claims were preempted. It found that the state enforcement scheme was incompatible with the federal and that, in any case, it appeared that individual issue might prevail.
Three days later, the Ninth Circuit refused review of a similar decision from the same court. In Daprizio v. Harrah’s Las Vegas, Inc.pdf a different judge for the District of Nevada also found that the FLSA preempted state law class actions for the same reasons. The Daprizio action involved casino staff who claimed that they were required to come in 10-15 minutes early each day for pre-shift meetings, but were not paid for the time. Importantly, the court had held that preemption required the actual dismissal of the state law claims. The Ninth Circuit refused to accept the appeal under Federal Rule 23(f) because the trial court’s order technically was not a decision refusing to certify the case, and thus did not fall within Rule 23’s ambit.
The Bottom Line: Class and collective actions make look alike in some respects, but the differences between the two are great. While some courts will permit them to proceed in tandem, others have found that the two are in fact incompatible, and that the state law claim should give way to the federal.
A Postscript: An astute reader alerted us that on December 7. 2010, the court in Daprizio reconsidered its order in light of the intervening Ninth Circuit decision in Wang v. Chinese Daily News, Inc.pdf 623 F.3d 743 (9th Cir. 2010). The Wang decision is not strictly on point in that it did not deal with the procedural conflict between FLSA collective actions and Rule 23 class actions, but rather reached the unremarkable result that the FLSA’s substantive provisions do not preempt similar state law requirements. While the district court noted that Wang did not address the same issues, still it concluded that reconsideration was appropriate, and directed the case to proceed as two separate classes, one under the FLSA, and one under state law.
A Second Bottom Line: Attempts to combine FLSA and state wage and hour law claims often lead to unpredictable results.