Over the past few years, federal courts have moved towards limiting the ways in which employees can join wage and hour lawsuits and inform one another of the existence of these lawsuits. For example, after Walmart Stores Inc. v. Dukes, 131 S. Ct. 2541 (2011), federal courts have become more hesitant to certify class actions in employment cases. Further, several courts have recently enforced the class action waivers imposed by employers and forced employees to seek to assert their rights in individual arbitration proceedings. However, the Fair Labor Standards Act’s opt-in mechanism is still alive and well, and employees are increasingly looking to social media for information on lawsuits and their rights as employees.
Class Actions More Difficult
After the U.S. Supreme Court’s ruling in Dukes, federal courts may be less inclined to grant class action status to employment cases. In Dukes, the Court held that employees claiming that they had been subjected to discrimination on the basis of their gender were not entitled to bring a class action lawsuit against Walmart because they could not show “that all their claims c[ould] productively be litigated at once.” Justice Antonin Scalia, writing for the majority, reasoned that “Title VII…can be violated in many ways — by intentional discrimination, or by hiring and promotion criteria that result in disparate impact, and by the use of these practices on the part of many different superiors in a single company.”
Since then, some courts have cited Dukes as a reason for denying class certification in employment cases. For example, in Casida v. Sears Holdings Corp., 2012 U.S. Dist. LEXIS 111599 (E.D. Cal. Aug. 8, 2012 ), a U.S. magistrate recommended against certification of a class of assistant managers at Sears locations alleging that they had been misclassified as exempt from the FLSA’s overtime provisions. The court reasoned that individualized issues in determining whether the employees were exempt from overtime — such as whether they could hire and fire subordinate employees independently — predominated over common issues in the case. However, since wage and hour cases tend to involve more easily identifiable policies common to all members of the putative class, the Dukes rationale is by no means as prevalent in wage and hour cases as it is in discrimination cases.
Courts Enforcing Waivers
Increasingly, employers are requiring employees to sign contracts agreeing to arbitrate any disputes arising out of their employment on an individual basis. These documents often include clauses known as “class action waivers” because the employee waives any and all rights he may have had to bring a suit on behalf of himself and others or to join a suit brought by another employee.
Plaintiffs typically argue that such agreements are unconscionable due to the disparity in bargaining power between employer and employee. In wage and hour cases, moreover, the cost of bringing an individual lawsuit can easily exceed the recovery of unpaid wages due to the employee. When a class action waiver is in force, an individual arbitrating his claim cannot invite other employees to join his action. In these situations, others in the same job may not learn of the case and their right to bring their own arbitration claim.
In Morvant v. P.F. Chang’s China Bistro Inc., 870 F. Supp. 2d 831 (N.D. Cal. May 7, 2012), the court rejected the plaintiff’s unconscionability arguments, and held that employees suing for violations of the California Labor Code — including failure to provide meal breaks — were required to individually arbitrate their claims. The Morvant court rejected the plaintiffs’ argument that “the modest size of the potential individual recovery, the potential for retaliation against members of the class, the fact that absent members of the class may be ill informed about their rights, and other real world obstacles to the vindication of class members’ rights to overtime pay through individual arbitration” made the waiver unconscionable.
Although employees’ ability to bring class action suits under Federal Rules of Civil Procedure 23 may be limited, courts (especially in the Second Circuit) still allow the use of the FLSA’s opt-in collective action provision. That is, when an employee can make the “modest factual showing” that he is “similarly situated” to other employees, the court will authorize a mailing to the proposed group of employees informing them of the suit and their right to join. When the employee signs a form indicating his consent to join, he becomes a party to the lawsuit.
This provision is invaluable to employees who may not otherwise be aware of their right to sue for unpaid wages. It does, however, require employees to sign up for the lawsuit, and many employees do not do so fearing retaliation. A Rule 23 “opt-out” class provides notice to employees informing them that they will be included in the lawsuit unless they affirmatively opt out of the case. For this reason, many more employees are included in Rule 23 actions.
Social Media Trend
Increasingly, plaintiffs and their attorneys are turning to social media to inform employees of pending lawsuits and investigations. These plaintiffs and firms encourage a dialogue among their followers and request that they contact them directly for specific questions. Facebook is a useful medium for reaching employees, as it allows direct contact with employees of a specific company with targeted announcements. Google also collects information from its users based on their search histories and enables employees and their attorneys to inform specific people of the pendency of a lawsuit. Twitter allows employees to ask questions and join a conversation about their rights and the details of a pending lawsuit.
For example, an employee searching “ct assistant manager” might find an advertisement alerting him of a pending lawsuit and contact information for that attorney. An employee checking his Facebook page might see an advertisement letting him know that assistant managers are often entitled to overtime and providing attorney contact information. These are all ways in which word can spread about employee rights under wage and hour laws that does not require expensive and time-consuming briefing and court approval. While the number of plaintiffs that can join a suit is still limited by the similarity of their claims, at least information is reaching people who might not otherwise be aware that their rights have been violated.
Thus, although courts are curtailing the use of the Rule 23 opt-out class action and enforcing class action waivers, more employees are receiving information about pending lawsuits through the use of social media. For employees, the news isn’t all bad. •