We’ve written many times in this blog about the two-step procedure used by many courts in Fair Labor Standards Act (FLSA) cases in collective actions. The first step is to provide notice to the proposed class and is typically decided under a lenient standard. If the court “conditionally certifies” the class, there is usually an opt-in period, followed by some measure of additional discovery, followed by a motion to decertify by the defendant. Although section 16(b) of the FLSA was passed to limit collective actions, Hoffman-La Roche v. Sperling, 493 U.S. 165 (1989), the use of this procedure by courts is now working to encourage and facilitate collective actions. Part of this stems from the fact that because Rule 23 does not apply to the FLSA, a defendant facing a successful motion for conditional certification has virtually no appeal rights until the case is over. For this reason, many employers settle not long after a case is conditionally certified and the opt-in period has closed.
But what if the defendant sticks it out and files the motion to decertify, and the motion is granted? Or what if the less common scenario occurs, where conditional certification is denied? The same rule applies, much to the frustration of unsuccessful plaintiffs’ counsel, as a recent case demonstrates.
In Halle v. West Penn Allegheny Health System, Inc., Case No. 15-3089 (3d Cir. Nov. 18, 2016), the plaintiffs sought to bring two separate collective actions against various hospitals for work they claimed they performed during their unpaid meal periods. In 2009, the district courts conditionally certified the two cases, and a total of nearly 3,800 employees opted in to the two cases. Following two years of discovery, the courts in both cases decertified the actions because of multiple differences among the class members relating to individual supervisors, job duties and experiences. In an effort to obtain an appeal, the individual plaintiffs dismissed their own claims under Rule 41(a) to create a final, appealable order, and then appealed. That effort failed because the Third Circuit found that the dismissal of the plaintiffs’ claims extinguished their right to represent the class as well. We blogged this initial decision here.
Was that the end? Not quite.
The same law firms then filed two brand-new cases with two of the former class members, with slightly different proposed class definitions. They again sought conditional certification and, while that motion was pending, submitted 250 opt-in forms in one of the cases, before the court concluded that the matter was essentially the same as the originals and should not proceed as a collective action. It dismissed the attempted opt-ins’ claims without prejudice. Three of the individuals who had tried to opt in to the first case appealed. (In the second action, the lead plaintiff accepted a Rule 68 offer of judgment and his claims were dismissed, so that case was effectively over.)
The Third Circuit was therefore left with the question of whether three attempted opt-ins whose claims were dismissed without prejudice had standing to appeal the denial of conditional certification. The court concluded that they did not. Instead, like unsuccessful defendants, they had to await the conclusion of the litigation and appeal then if they chose.
Cases like Halle stem from a fundamental difference in how some may view a class or collective action, and specifically whether the right to proceed in that fashion is itself a substantive right. These mechanisms, however, are not substantive rights but rather procedural vehicles. And while the inability to appeal conditional certification decisions overwhelmingly disadvantages employers, on occasion it can also work to the detriment of putative class representatives.
The bottom line: The rules limiting appeals of decisions regarding conditional certification or decertification of FLSA collective actions apply to plaintiffs, too.