On December 20, 2012, NELA filed an amicus brief in the Fifth Circuit Court of Appeals in support of a group of Home Mortgage Consultants (HMC) who alleged they were misclassified by their employer and therefore unlawfully denied overtime payments in violation of the Fair Labor Standards Act (FLSA). This case is a part of a multi-district litigation that could involve as many as 15,000 HMCs nationwide.
After the district court judge granted conditional certification of the collective action – thereby allowing for notice to be sent to potential opt-in plaintiffs – the defendants petitioned the Fifth Circuit for a writ of mandamus. In their meandering petition, the defendants challenged not only the district court’s decision on conditional certification in this case, but also the two-step process for certifying collective actions that is currently used in every federal circuit. The defendants allege that the two-step conditional certification procedure currently used in collective actions arising under the FLSA, Age Discrimination in Employment Act (ADEA), and Equal Protection Act (EPA) is inconsistent with the Federal Rules of Civil Procedure (FRCP) and that such actions should be governed by Rule 23 of the FRCP as interpreted recently by the U.S. Supreme Court in Wal-Mart v. Dukes.
NELA’s amicus brief reviews the history and purposes of the FLSA, emphasizing that the statute was designed to be “remedial and humanitarian in purpose,” and was enacted to spur economic growth during the Great Depression by reducing unemployment (a fact that is important to keep in mind as the country slowly recovers from the worst economic downturn since the Great Depression). The brief also emphasizes that notwithstanding the FLSA’s express provision for bringing collective actions, wage theft continues to plague the American workplace, and that private enforcement through collective actions is vital to combat it.
The brief further reminds the court that fundamental differences between collective actions and class actions under Rule 23 support the need for the two-step certification procedure. While the statute of limitations is tolled upon the filing of a class action, it continues to run in a putative collective action for each worker until he or she affirmatively consents to joining the case. It is because of this fundamental difference that the U.S. Supreme Court in Hoffman-La Roche v. Sperling vested with district courts the authority and discretion to facilitate the notice process.
Eliminating the early notice procedure would make private enforcement of the FLSA practically unrealistic. As many workers are not aware that their rights are being violated until they receive notice of a pending collective action, the running of the statute of limitations alone would prevent many workers from bringing what would be valid claims. In addition, facilitating early notice is important to protecting individual workers from retaliation based on their decision to bring the action. The disparity in power between an individual worker and his or her employer is undeniable and, particularly for low-wage workers, there is strength and safety in numbers.
NELA’s amicus brief was drafted by Matthew C. Helland, Tim C. Selander, and Adam W. Hansen from Nichols Kaster, PLLP (San Francisco, CA and Minneapolis, MN), with help from J. Derek Braziel (Dallas, TX) and Richard J. (Rex) Burch (Houston, TX). Amicus briefs were also filed on behalf of the plaintiffs by the National Women’s Law Center and AARP.#5thCircuit #ClassandCollectiveActions #WageHour #WorkerMisclassification #FLSA