Legal Updates

Tactical Options For Employers Facing Wage-And-Hour Class Actions

Workers who believe that their employers have cheated them out of earned pay, such as overtime, accrued vacation time, or work allegedly performed “off the clock,” often bring wage claims under federal and state statutes, such as the federal Fair Labor Standards Act (“FLSA”) and the Massachusetts Wage Act. Wage claims are often brought on behalf of multiple employees simultaneously, in what are known as “class actions” or “collective actions.” Such lawsuits can have a significant impact on an employer’s bottom line.

Federal and state procedural rules govern class actions. In particular, four threshold requirements for class certification must be met: (i) the class is so numerous that adjudication of individual claims would be impracticable (numerosity); (ii) there are questions of law common to the class (commonality); (iii) the class representatives’ claims and defenses are typical of those in the class (typicality); and (iv) the class representatives will fairly and adequately protect the interests of the class (adequacy).

While class-action wage-and-hour claims can be time-consuming and expensive for employers, there are a number of tactical steps that can be taken to help ease the burden and expense of such lawsuits.

Summary Judgment Before Class Certification

Generally, the first step in bringing a class-action suit is for the named plaintiffs to ask the court to “certify” the class, by showing that multiple plaintiffs share the same essential claims for relief. Employers, however, may wish to try to avoid the cost and expense of litigating whether the plaintiff class has met the requirements for class certification by seeking summary judgment before the class is certified.

This can be accomplished by attacking the merits of a named plaintiff’s claims. For example, an employer may be able to show that the claims of one of the named plaintiffs are barred by the statute of limitations.

In an effort to stave off summary judgment, plaintiffs’ counsel may proffer individualized evidence relating to the specific employment of that named plaintiff. Accordingly, even if the motion for summary judgment is unsuccessful, the employer may have generated good ammunition for a subsequent motion to decertify the class.

Moving for summary judgment at the outset of a class-action wage-and-hour case also can send a strong message to opposing counsel that the employer intends to strongly contest the proposed class claims. Strategically, the employer can also educate the judge about the various individualized issues in advance of class certification. The prospect of early dismissal of named plaintiffs’ claims also may force plaintiffs’ counsel to think twice about investing the time and energy entailed by proceeding on a class-action basis.

Oppose Class Certification

As noted above, class-action plaintiffs often resist dismissal by citing individualized issues related to their employment. This is especially true in wage-and-hour cases in which, for example, a plaintiff alleges that the employer inconsistently applies its pay and benefits policies. Such alleged inconsistencies can defeat claims of typicality or commonality.

There is no per se prohibition against pre-class certification discovery. As such, defense counsel should consider deposing the named plaintiff(s) as soon as practicable. This serves two purposes. First, it allows the employer to attack the plaintiffs’ claims on the merits. It also allows the employer to ascertain whether the named plaintiff is capable of fairly representing the class and thereby satisfying the adequacy requirement.

For example, discovery may reveal that a named plaintiff in an overtime wage case is actually an exempt employee for overtime purposes. If so, the employer will have a strong argument that that employee cannot possibly represent the interests of non-exempt employees. Picking off named plaintiffs can create havoc for plaintiffs’ counsel, who may then be forced to scramble to try to locate a suitable class representative.

Summary Judgment After Class Certification

In many cases, it is not possible to move for summary judgment until after the class has been certified because the record is not fully developed. With a more fully developed record, the employer has a better chance to succeed at summary judgment. For example, the employer may be able to prove that a previously executed release applies to the class plaintiffs’ claims, or that their claims conflict with the provisions of the employer’s employee handbook.

Summary judgment after class certification provides an effective way for an employer to resolve a legal issue across the entire certified class. If the employer seeks to achieve conclusive resolution of the claims of the entire class, it may be better served by moving for summary judgment after certification of the entire class. Summary judgment also may force the plaintiffs to present evidence that ultimately undermines class certification, thereby setting up a motion to decertify the class.

Move To Decertify Class

Discovery and summary judgment practice sometimes reveal that the class never should have been certified in the first place. The requirements for class certification remain in place throughout the life of the case, and it remains the class plaintiffs’ burden to establish that certification is proper.

Class-action plaintiffs’ vigorous opposition to summary judgment can provide fertile ground for decertification. Employers often serve decertification motions simultaneously with motions for summary judgment or upon receipt of the class plaintiffs’ summary judgment opposition. Plaintiffs’ response to a summary judgment motion is often replete with individualized evidence demonstrating that decertification is proper.

Conclusions

There are a wide range of tactical steps an employer can take to stop a class-action wage-and-hour lawsuit dead in its tracks. Depending on the strength of the employer’s defenses to the class representative’s claims, the employer may seek dismissal before the case gathers any steam, i.e., at the pre-certification stage.

Alternatively, once the record is more fully developed after class certification, the employer may be able to muster evidence sufficient to eliminate the claims of the entire class. Plaintiffs’ opposition to a motion for summary judgment in a wage-and-hour class-action case may well provide “individualized” evidence demonstrating that class certification is not warranted.

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Schwartz Hannum’s employment lawyers have extensive experience litigating class-action wage-and-hour cases in both state and federal court. We would be happy to assist your organization in connection with such claims or any related issues.