An Overview of Federal Employment Class Actions and Collective Actions

• Publication year: 2004
• Pages: 97
• Citation: Vol. 33 No. 12 Pg. 97

33 Colo.Law. 97 Colorado Lawyer 2004.

2004, December, Pg. 97. An Overview of Federal Employment Class Actions and Collective Actions

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97

Vol. 33, No. 12, Pg. 97

The Colorado Lawyer
December 2004
Vol. 33, No. 12 [Page 97]

Specialty Law Columns
Labor and Employment Review
An Overview of Federal Employment Class Actions and Collective Actions
by John M. Husband

This column is sponsored by the CBA Labor Law Forum Committee to present current issues and topics of interest to attorneys, judges, and legal and judicial administrators on all aspects of labor and employment law in Colorado

Column Editor

John M. Husband of Holland & Hart LLP in Denver - (303) 295-8228, jhusband@hollandhart.com

John M. Husband
About The Author

This month's article was written by John M. Husband, Denver, a partner in Holland & Hart LLP, who specializes in labor and employment law and has defended employers in national class action litigation. John Husband is the editor of this column - (303) 295-8228, jhusband@ hollandhart.com.

Class action and collective action litigation in employment cases continue to be a major focus and a trend with no foreseeable end. This article provides an overview of employment class actions under Rule 23 of the Federal Rules of Civil Procedure, and of collective actions under the Fair Labor Standards Act § 216(b).

In recent years, high profile employment class actions have been filed against many of the largest companies in the United States, including Wal-Mart, Home Depot, Texaco, Microsoft, and Coca-Cola.1 Home Depot settled a sex discrimination class action for $65 million. Texaco settled a race discrimination class action for $176 million, including the payment of $29 million in attorney fees. Microsoft agreed to pay $96.9 million to settle two class action suits dealing with temporary employees.2 Coca-Cola settled a race discrimination case for $192.5 million, which included more than $20 million in attorney fees and an agreement to establish programs and policies to promote diversity.3

Consumer giant Wal-Mart is now facing a nationwide sex discrimination class action lawsuit.4 In June 2004, a federal judge in California ruled that six current and former Wal-Mart employees could represent a class of more than 1.6 million current and former female employees of Wal-Mart. The judge declared that the case is the largest civil rights class action ever certified against a private employer.5

Due to favorable federal law and the multi-state business operations of many employers, most class action and collective action claims are brought in federal court. Although subclasses under state laws may be pursued as well, given the state-specific nature of these claims, this article discusses class action and collective action claims with a focus on federal claims and issues.

Overview of Legal
Theories

Employers may be sued in federal court under a variety of legal theories. Employees commonly cite statutes that are intended to prevent employers from taking illegal action. However, not all employment class actions are analyzed under the same legal framework.

Certain claims are analyzed under Rule 23 of the Federal Rules of Civil Procedure ("F.R.C.P. 23") and others under the Fair Labor Standards Act ("FLSA") § 216(b). Which analysis is used depends on the laws under which the action is filed. (See "Distinguishing Between Class Actions and Collective Actions," below.)

F.R.C.P. 23 Class Actions

F.R.C.P. 23(a) and 23(b) promulgate certain requirements that must be met before a class action may be pursued. For plaintiffs to be certified as a class, both subsections must be satisfied.

F.R.C.P. 23(a) Requirements

Under F.R.C.P. 23(a), one or more members of a class may sue on behalf of all members in the class if four criteria are all met. These requirements generally are referred to as numerosity, typicality, commonality, and adequate representation. They are described as follows.

1. Numerosity: Joinder of all members is impractical because of the class size.

2. Typicality: The questions of law or fact are common to the class.

3. Commonality: The claims or defenses of the suing member of the class are typical of the claims or defenses of the entire class.

4. Adequate Representation: The suing member will fairly and adequately protect the interests of the class.6

The U.S. Supreme Court's 1982 decision in General Telephone Co. of Southwest v. Falcone7 stresses the necessity for strict compliance with the prerequisites of F.R.C.P. 23(a). In Falcone, the Court found that an employment discrimination class action, "like any other class action, may only be certified if the trial court is satisfied, after a rigorous analysis, that the prerequisites of F.R.C.P. 23(a) have been satisfied."8 The Court made clear that simply alleging a discriminatory practice of the employer does not meet the requirements of F.R.C.P. 23(a).9

F.R.C.P. 23(b) Requirements

Even if the plaintiffs meet the requirements of F.R.C.P. 23(a), the potential class representatives still must show that the class action fits into one of three categories under F.R.C.P. 23(b).

F.R.C.P. 23(b)(1): Under this subsection, a class action is permitted if there is a risk of inconsistent results for individual members of the class or an impaired ability for individual...