Class action defense counsel, at least, have argued for a long time that there is a basic incompatibility between collective action claims under the FLSA, which require individual plaintiffs to opt in to the litigation, and wage claims brought under state law, which generally are opt -out cases — meaning that everyone in the job classification at issue is part of the class unless they affirmatively choose not to be.

That argument has gained some traction in some districts, and has been rejected in others, but has not had the attention of a federal circuit court until now.  In Ervin v. OS Restaurant Services — the Outback Steakhouse chain — the Seventh Circuit ruled yesterday that opt-in and opt-out classes can happily coexist in the same litigation.  The court found indications in the FLSA’s text that it was not intended to override state law.  The court also brushed off the inevitable confusion of class members — who will be invited to opt in to one claim in order to participate, but to opt out of a different claim to avoid participation — as a “case management” matter that district courts should think about but can manage.  (Specific suggestions on this point, however, were not presented).

In Hoffman-LaRoche Inc. v. Sperling, a 1989 case, the Supreme Court noted that Congress intended to limit employers’ exposure to representative litigation under the FLSA, by the 1947 Portal-to-Portal Act:

In part responding to excessive litigation spawned by plaintiffs lacking a personal interest in the outcome, the representative action by plaintiffs not themselves possessing claims was abolished, and the requirement that an employee file a written consent was added. . . . The relevant amendment was for the purpose of limiting private FLSA plaintiffs to employees who asserted claims in their own right and freeing employers of the burden of representative actions.

Courts that have differed from the Seventh Circuit’s view have argued that combining state-law opt-out claims in the same case as a collective action undermines the intent of Congress, because the trial of opt-in and opt-out cases together effectively wipes out the limitations of the opt-in mechanism.  The Seventh Circuit was not impressed, refusing even to consider Congressional intent because it found the text of the statute itself clear enough as to what Congress meant to do.  It will be interesting to see whether other circuits will follow the Seventh.

 

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Photo of Mark W. Batten Mark W. Batten

Mark W. Batten is a partner in the Labor & Employment Law Department and co-head of the Class & Collective Actions Group.

Mark represents employers nationwide at all stages of complex employment litigation, including class and collective actions on wage and hour matters…

Mark W. Batten is a partner in the Labor & Employment Law Department and co-head of the Class & Collective Actions Group.

Mark represents employers nationwide at all stages of complex employment litigation, including class and collective actions on wage and hour matters and discrimination claims. Ranked by Chambers USA, Mark is hailed as “a fabulous lawyer, handling interesting and complex cases.” Clients “highly recommend him to anyone seeking litigation counsel in the Boston area,” as well as note “he is responsive, pragmatic and team-oriented, and offers excellent legal advice.”

He assists clients with all aspects of employment policies and practices, including hiring, termination, leaves, accommodation of disabilities, and other matters. Mark also handles diverse civil litigation, including litigation of noncompetition agreements, ERISA matters, discrimination and wrongful termination litigation in federal and state courts; proceedings before the Massachusetts Commission Against Discrimination; wage and hour matters; and labor arbitrations. He is also an experienced appellate attorney both in employment cases and other civil litigation, handling appeals at all levels in the state courts and in the United States Courts of Appeals.

Mark also has substantial experience with traditional labor matters. He regularly represents employers in a variety of industries, including a number of newspaper and media companies, in collective bargaining, practice before the NLRB, labor arbitrations, union organizing campaigns, and day-to-day advice on administration of collective bargaining agreements. He regularly advises clients in both union and non-union settings on diligence matters in corporate acquisitions and financings. He also has experience on behalf of securities firms in arbitrations before the NASD and NYSE of customer and employee complaints.

Mark also practices on behalf of newspapers and other media in newsroom litigation, including libel defense and representation of reporters under subpoena, and has substantial experience in litigation involving access to sealed records and judicial proceedings on behalf of media companies.

Before joining Proskauer, Mark was a trial attorney in the Civil Division of the U.S. Department of Justice in Washington, where he was lead counsel in major litigation for over two dozen federal agencies, ranging from the U.S. Air Force, the CIA, and the U.S. Secret Service to the Department of Housing and Urban Development and the National Endowment for the Arts.

Mark regularly writes and lectures on employment-related matters, including, for instance, MCLE’s Representing Clients Before the Massachusetts Commission Against Discrimination.

In his spare time, Mark is an experienced computer programmer, conversant in C, C++, and other languages. He has ported software between computer operating systems and has published several commercial computer games.