How To Win Collective Action Certification In FLSA Suits

Posted August 27th, 2018.

As It Appeared On
Law360

By Vin Gurrieri

Law360 (August 27, 2018, 5:37 PM EDT) — Big-ticket Fair Labor Standards Act collective actions often hinge on whether plaintiffs’ lawyers can convince a judge to let their suits move ahead on behalf of a large group of workers and fend off the employer’s subsequent decertification bid.

When workers lodge wage-hour suits, they can lodge either an FLSA collective action, a class action under state laws, or a combination of the two.

In a collective action, workers must file for conditional certification early in a case, and if a judge grants the request, they can notify potential collective members of their claims and give them a chance to opt in to the suit. Businesses can later move to decertify the collective.

Wage claims brought under state law, however, proceed as class actions under Rule 23 of the Federal Rules of Civil Procedure, which require members of a certified class to affirmatively opt out if they don’t want to be included in the class. Hybrid cases are those that include both class and collective action claims.

A recent report by legal analytics firm Lex Machina called FLSA cases a “hotbed” of litigation, with nearly 7,700 FLSA cases filed last year. The Southern Districts of Florida and New York led the way with 932 and 813 FLSA cases filed respectively, with New York’s Eastern District, Florida’s Middle District and Texas’ Southern District being the next three busiest jurisdictions, according to Lex Machina.

Here, attorneys who represent workers share strategies for obtaining and defending certification in FLSA cases.

Be Diligent With Discovery

Even before workers file a class or collective action, their lawyers should have already conducted a preliminary investigation of their claims and compiled evidence to support it. But such investigations — both before and after the suit is filed — shouldn’t be conducted in lax fashion, plaintiffs’ attorneys say.

James Finberg of Altshuler Berzon LLP, whose practice focuses on class and collective actions and wage-hour cases in particular, noted that the key to winning certification is being able to point to an illegal policy or practice that the employer applies to all members of a proposed collective.

To have enough evidence that such a policy exists and that it affects all workers in a similar way, Finberg said workers’ counsel must undertake meticulous and rigorous investigation and discovery to make sure they have enough to convince a court that a case should proceed on a classwide basis.

Finberg said he generally collects three types of evidence: depositions of management, payroll and human resources data, and declarations from people who opted in to the collective.

“That’s the key to getting a class certified: showing the court that you’re going to be able to try the case using common evidence for everybody … not evidence that’s specific to any individual,” Finberg said. “So, if you have testimony from management and management documents about a uniform practice, that’s the type of evidence that forms the basis for class certification.”

Outten & Golden LLP partner Sally Abrahamson, leader of the class action practice group in the firm’s Washington, D.C., office, also highlighted the importance of obtaining discovery of the employers’ electronically stored information, or ESI, such as emails and other corporate communications that offer a glimpse into the company’s budget requirements and other practices.

Those documents, which can offer broad looks at labor cost requirements a company makes managers follow, can often provide context for purportedly illegal actions taken by managers.

“The most important thing is figuring out what the corporate policies are; judges find that most persuasive, and so targeting your discovery to what was communicated from the corporate office or the headquarters,” Abrahamson said. “Looking at the bigger picture at what the funding is — this is also why it’s really important to get ESI because it’s important to see why that manager is doing what they’re doing — a lot of times you see that there is communication that may be a little bit more coded or sophisticated coming from corporate. But it’s not generally just one bad actor in one location.”

Abrahamson also noted that plaintiff-side attorneys often don’t have a lot of information at the outset of a case and “as we get some ESI, we learn more about what we’re going to need moving forward.”

Get Moving on Conditional Cert.

One element of FLSA wage cases that lies almost entirely in the hands of plaintiffs’ counsel is the timing of a motion for conditional certification; if approved, it gives lawyers the right to notify potential members of the collective of the existence of the suit and offers them an opportunity to join the case. Such motions carry a fairly low standard of proof, so employers in some cases don’t contest those motions and many courts simply rubber-stamp them.

Finberg said that it generally behooves plaintiffs to file for conditional certification as quickly as possible since the statute of limitations for FLSA collective action claims, unlike class claims brought under Rule 23, continues to run until people have opted in. The longer it takes for the conditional certification motion to be filed, the likelier it is that some plaintiffs will end up having claims that exceed the limitations period, he said.

“So unless the defendant has agreed to tolling [of the statute of limitations], I’m going to make that motion right away,” Finberg said.

Abrahamson similarly said that while the optimal timing of a conditional certification motion can vary depending on the case, her firm likes to file one as quickly as possible after filing a complaint, but she acknowledged that in some cases more documentary evidence is needed about the corporate policy at issue.

While Michael Palmer, co-chair of Sanford Heisler Sharp’s LLP’s wage-and-hour practice, doesn’t adhere to a specific time frame for filing a conditional certification motion, he said it should typically occur within the first six months of a case in part because of the statute of limitation.

“You should be thinking about class and collective certification right at the time you are contacted by a client prior to filing a complaint,” Palmer said.

“There are situations in which you have a fairly straightforward claim and you have a lot of facts from your clients, you have multiple people that have come forward to you and provided you documents. You have everything that you need to file a motion for conditional certification right at the beginning,” Palmer added. “There are other cases in which it’s a little bit more of a complex claim, you don’t have as complete of a record, and you are only representing one individual and you need to get some documents from defense … in order to have enough information. You do not want to sit on this for a long time.”

Palmer also said that if plaintiffs’ lawyers wait until after extensive discovery has been conducted to move for conditional certification, some courts see it as a reason to raise the plaintiffs’ legal burden.

“They will then demand to see more because you have more information,” Palmer said. “You potentially could be actually making it more challenging for yourself the more information you get.”

Prep Workers for Depositions

One of the key methods used by the defense bar to decertify a collective is to try to depose as many individual workers as possible and highlight differences in their experiences to show they aren’t similarly situated, plaintiffs’ lawyers say.

As a result, Palmer said it’s important for workers’ attorneys to prepare those who serve as witnesses for questions they will face from employers’ lawyers during depositions.

“They’re going to be trying … to get collective members to suggest that their experiences differ,” Palmer said. “Throughout, keep in mind what your claims are and always being prepared. Being prepared also means spending time preparing your opt-in witnesses so that they understand the case, so they can be deposed and that they understand what the goals of defense counsel are: to try to say that there are individual differences.”

When it comes to fighting employers’ bid for decertification during the second stage of the FLSA certification process, Palmer said, depositions by plaintiffs’ counsel will also play a key role in showing that any individualized issues aren’t enough to block a group of workers from litigating their claims collectively.

“Your job is going to have to be to take depositions of managers, take depositions of current and former employees and show that there was a larger issue, that there was some policy or plan or practice that was companywide,” Palmer said. “Even if it didn’t affect everyone in exactly the same way, it did apply to everyone.”

Abrahamson, for her part, said that preparing to fight an employers’ decertification motion is essentially the same as filing for certification in Rule 23 class actions since the standards are essentially the same.

“The decert is very similar to what we do when we prepare the class certification motion under Rule 23 — just making sure that we’ve gathered enough evidence that there is a corporate policy and there’s uniform implementation of the corporate policy,” she said.

Have Experts in the Fold

Another way defense lawyers can try to highlight individual issues is to show that damages can’t be calculated for all the workers in a collective since they worked different hours at different pay rates.

But in 2016 in Tyson Foods v. Bouaphakeo https://www.law360.com/images/lexis_advance/kb-icon-red.png, the U.S. Supreme Court ruled that certification was properly awarded to Tyson Foods workers in a don-doff class action, and that the workers could use averages and other statistical analyses derived from expert testimony to show similarities between disparate class members.

Consequently, experts can play a key role in convincing a court that damages for a class can be calculated using a formula that applies to all members of a collective without it being necessary for each worker to testify individually, plaintiffs’ lawyers say.

“Some issues like the number of hours that individuals worked are going to be individualized, but what we try to show the court is that you can determine liability based on common evidence,” Finberg said, noting that employers’ liability and damages can be split into separate phases of a potential trial.

Palmer added that when it comes to individual differences between members of a collective that are based on damages, there “is a consensus by the courts that is not something that should defeat certification.”

“The fact that each class member’s damages will have to be separately calculated doesn’t mean that it shouldn’t be a class action,” Palmer said. “If it did, there would be few wage-and-hour cases that could ever be certified because people work different hours and [get paid] different rates.”

But he said it’s still “important to be able to show a court that there is a way that you’re going to be able to prove damages for everyone,” and that expert witnesses are important for achieving that goal.

“You need to always be thinking about this, working with experts early on,” Palmer said.

Cast Wary Eye on ‘Happy Campers’

One tactic employers use during initial investigations when challenging conditional certification is to obtain sworn statements from workers not represented by counsel that rebut the lawsuit’s allegations.

For example, if a suit alleges that a company has a policy of making employees work off the clock without pay, defense counsel may try to find workers who will attest that they aren’t required to work off the clock.

While defense attorneys refer to those sworn statements as declarations lists, lawyers on the plaintiffs’ side instead call them “happy-campers declarations,” which, Abrahamson said, “courts generally don’t give that much weight to.”

She noted that employees — even if they aren’t explicitly told they have to sign such declarations — often feel pressured into doing so, feeling obligated to paint their employers in a good light for fear of losing their jobs, and that they don’t necessarily understand how the interviews affect their legal rights.

“Obviously, these interviews are not being targeted in an objective investigative way; they’re being targeted to get supportive evidence, and so they’re generally pretty easy to attack,” Abrahamson said. “If you think about it — these are low-wage workers and there are attorneys coming in, there’s not a lot of bargaining power between them. It’s not surprising people feel like they have to even if they aren’t explicitly told they have to.”

Palmer said that workers’ attorneys should “review the declarations closely” and see if it was made clear to workers that they knew they didn’t have to speak to the defense attorney and that courts have thrown out declarations that were obtained without proper disclosures.

“Along those same lines, you’ll want to explain to the court the concerns that you have that people who are giving declarations because they are current employees and they’re beholden to the company for their livelihood that they’re not going to be giving a declaration that isn’t influenced by that,” Palmer said. “It is simply understandable that if your employer comes to you and makes a demand that you help the company out with this issue, you’re going to try to do your best to satisfy your boss.”

Palmer noted as well though that in some cases declarations “are not nearly as problematic as one would initially think” since they may show that workers did in fact have similar experiences and that any differences are only trivial.

“Yes, the company or [its] attorneys were able to sign off on some statement that looks bad,” Palmer said. “But if you look at the declaration as a whole, it actually fits together with what you’re presenting, and the fact that there are minor differences between people doesn’t defeat certification.”

–Editing by Brian Baresch and Aaron Pelc.

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