Appeals Courts Limit Scope of FLSA Collective Actions

• Author: William H. Newman
• Pages: 4-5

Published in Litigation News Volume 47, Number 2, Winter 2022. © 20 22 by the American Bar A ssociation. Repro duced with permissio n. All rights reser ved. This informati on or any portion the reof may not be copie d or disseminated in any

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Appeals Courts Limit Scope

of FLSA Collective Actions

wo federal appellate courts

have effectively limited the

scope of collective actions under

the Fair Labor Standards Act

(FLSA) to employees who worked in the

forum state unless the defendant hap-

pens to reside there. Both the U.S. Court

of Appeals for the Sixth Circuit and the

U.S. Court of Appeals for the Eighth

Circuit extended the 2017 U.S. Supreme

Court decision in Bristol-Myers Squibb

Co. v. Superior Court of California

regarding state law “mass actions” to

the context of federal collective actions.

In doing so, they held that even employ-

ees opting in to collective actions must

separately establish personal jurisdiction

to support their claims.

According to ABA Litigation Section

leaders, these holdings should inform

FLSA plaintiffs when choosing a forum

and discourage shopping for favorable

venues. But they believe these hold-

ings may complicate FLSA enforcement

with inefciencies.

BY WILLIAM H. N EWMAN, LITIGATION NEWS CONTRIBUTING EDITOR

FLSA Procedural Rules for

Certain Wage Claims

Congress enacted the FLSA in 1938 to,

among other things, provide remedies

for employees who seek unpaid wages.

Recognizing the power imbalance

between workers and employers, it

allows prevailing employees to recover

legal fees and to band together to liti-

gate similar claims.

Although the statute does not permit

class action lawsuits, it expressly pro-

vides a vehicle through which similarly

situated plaintiffs may maintain claims

in a “collective action.” The primary

difference between these lawsuits and

class actions is that they require indi-

vidual plaintiffs to opt in to a collective

instead of opting out of a class.

Despite this different procedure, fed-

eral courts historically applied the same

personal jurisdiction analysis to class

actions and FLSA collective actions.

Under that standard, once one plaintiff

properly asserts personal jurisdiction

over a defendant, the entire class or col-

lective does as well. But in 2017, Bristol-

Myers inspired litigants to argue that a

different standard was appropriate.

Bristol- Myers Inspires a

Change to Group Claim Rules

Bristol-Myers was not a class action or a

collective action. Instead, it concerned a

California state court tort action brought

by 600 individual plaintiffs who alleged

injuries arising from the defendant’s phar-

maceuticals. Not all the plaintiffs resided

in the state, nor was the defendant subject

to general jurisdiction there.

The defendant moved to dismiss the

claims brought by non-California plain-

tiffs for lack of specic personal juris-

diction because its in-state conduct was

connected only to the in-state plaintiffs’

claims but was irrelevant to the claims

brought by the out-of-state plaintiffs.

A divided California Supreme Court

afrmed the denial of that motion. It

applied a “sliding scale” approach that

Must Show

State ID

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