FLSA Collective Actions and Rule 23 Class Actions Not Incompatible: Eleventh Circuit

Practical Law Legal Update w-003-6955 (Approx. 5 pages)

FLSA Collective Actions and Rule 23 Class Actions Not Incompatible: Eleventh Circuit

by Practical Law Labor & Employment

Background

Several employees, on behalf of themselves and others similarly situated, brought minimum wage and overtime claims against the Sheriff of Lee County, Florida, under the FLSA and the Florida Minimum Wage Act (FMWA). The district court granted conditional certification of the collective action under § 216(b) of the FLSA, but denied conditional FRCP Rule 23(b)(3) class certification on their FWMA claims. The employees appealed.

Outcome

The Eleventh Circuit reversed the district court and:

Held that an FLSA collective action under § 216(b) and a Rule 23(b)(3) state law class action can be maintained in the same proceeding (29 U.S.C. § 216(b); Fed. R. Civ. P. 23).
Joined the Second, Third, Seventh, Ninth, and DC Circuits in this holding.

The Eleventh Circuit noted that:

FLSA collective actions and Rule 23 class actions differ in meaningful ways, including that:
- an FLSA § 216(b) collective action involves an opt-in procedure, requiring members to actively consent in writing to join the action, while a Rule 23(b)(3) class action relies on an opt-out procedure, and all qualifying class members are automatically included unless they affirmatively take action to exist; and
- Rule 23's class certification standards are more demanding (FRCP 23)).
The plain text and legislative history of § 216(b), however, do not suggest that the two procedures are mutually exclusive or irreconcilable.
The Second, Third, Seventh, Ninth, and DC Circuits have held that hybrid actions can be maintained in the same proceeding (see Busk v. Integrity Staffing Sols., Inc., 713 F.3d 525, 528–30 (9th Cir. 2013), Integrity Staffing Sols., Inc. v. Busk, 135 S. Ct. 513 (2014); Knepper v. Rite Aid Corp., 675 F.3d 249, 259–62 (3d Cir. 2012); Shahriar v. Smith & Wollensky Rest.Grp., Inc., 659 F.3d 234, 247–49 (2d Cir. 2011); Ervin v. OS Rest. Servs., Inc., 632 F.3d 971, 973–74 (7th Cir. 2011); Lindsay v. Gov't Emps. Ins. Co., 448 F.3d 416, 424 (D.C. Cir. 2006)).

The Eleventh Circuit:

Found that contrary to the district court's conclusion, the former Fifth Circuit's decision, LaChapelle v. Owens-Illinois, Inc.:
- did not establish that overlapping FLSA and FMWA actions were "mutually exclusive and irreconcilable";
- was distinguishable from Calderone because it ruled on whether a party can pursue a class action under Rule 23 for an ADEA violation. The court held that it could not, because the ADEA must be enforced in accordance with § 216(b) of the FLSA, and since § 216(b) only authorizes opt-in collective actions, only opt-in type class actions may be used in age discrimination cases; and
- did not address whether a party can simultaneously pursue an FLSA collective action and a Rule 23(b)(3) state law class action.
(513 F.2d 286, 287-89 (5th Cir. 1975).)
Rejected the employer's logistical arguments about potentially confusing class notices and the advanced procedural posture of the FLSA collective action.

Practical Implications

In Calderone, the Eleventh Circuit resolved a conflict among its district courts in favor of parties seeking to maintain an FLSA collective action and a Rule 23(b)(3) state law class action in the same proceeding. Employers should be aware of the status of hybrid cases in the Eleventh Circuit and the increasing trend among circuit courts to reach the same conclusion.

FLSA Collective Actions and Rule 23 Class Actions Not Incompatible: Eleventh Circuit | Practical Law