Labor and Employment - Jerry C. Newsome and K. Alex Khoury

• Publication year: 2004

Labor and Employmentby Jerry C. Newsome^* and K. Alex Khoury^**

This Article surveys notable developments in labor and employment law in the Eleventh Circuit from January 1 to December 31, 2003. During the survey period, the United States Supreme Court handed down two notable decisions, one involving the Fair Labor Standards Act ("FLSA")¹ and the other involving the Family and Medical Leave Act ("FMLA").² The United States Court of Appeals for the Eleventh Circuit rendered several notable decisions involving the FLSA, the FMLA, the National Labor Relations Act ("NLRA"),³ and the Railway Labor Act ("RLA")⁴ during the survey period. The Eleventh Circuit also issued a significant opinion affecting restrictive covenants under Georgia law.⁵

I. The Fair Labor Standards Act

The FLSA continues to be an active area in federal employment litigation. During this survey period, the Supreme Court granted certiorari to a case from the Eleventh Circuit⁶ on the issue of removability of FLSA actions.⁷ The Eleventh Circuit focused primarily on collective actions under Sec. 216(b),⁸ but it also considered the joint employment of migrant workers and the applicability of the agriculture exemption to nonagricultural enterprises.

A. Removal

In Breuer v. Jim's Concrete of Brevard, Inc.,⁹ the Supreme Court resolved a long-standing split among the circuits over whether FLSA actions brought in state court are removable on "federal question" grounds.¹⁰ The controversy arose from the seemingly innocuous wording of 29 U.S.C. Sec. 216(b), which provides that "[a]n action to recover [for a violation of the Act] . . . may be maintained against any employer . . . in any Federal or State court of competent jurisdiction."¹¹ The issue was whether the words "may be maintained . . . in . . . State court" constituted Congress's express prohibition on removal.¹² Finding that the wording of Sec. 216(b) falls short of an express prohibition on removal, the Supreme Court unanimously held that FLSA claims are removable.¹³

B. Collective Actions

The hottest employment topic in the Eleventh Circuit during this survey period was the "collective action" procedure under Sec. 216(b). The court of appeals issued four opinions concerning collective actions under the FLSA, and many more collective action cases found their way into the district courts during this survey period.¹⁴

In Prickett v. Dekalb County,¹⁵ the Eleventh Circuit Court ofAppeals held that plaintiffs who opted into a collective action were opting into the entire action, including subsequently added claims.¹⁶ The named plaintiffs in Prickett originally filed two FLSA claims against their employer for overtime pay. Several hundred other employees opted into the action by filing consent forms with the district court. Subsequently, the named plaintiffs amended their complaint to add a third FLSA claim against the employer. The district court granted the employer's motion for summary judgment against the opt-in plaintiffs on the later-added FLSA claim, concluding that the opt-in plaintiffs were not parties to the new claim because they had not filed a separate consent form for that claim.¹⁷

The court of appeals examined the following statutory language of Sec. 216(b): "No employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party . . . ."¹⁸ According to the court, the "plain language [of Sec. 216(b)] indicates that plaintiffs do not opt in or consent to join an action as to specific claims, but as to the action as a whole."¹⁹ The court of appeals then vacated the district court's opinion and remanded the case for further proceedings.²⁰

In Cameron-Grant v. Maxim Healthcare Services, Inc.,²¹ a three-judge panel of the court of appeals stated that it was considering an issue of first impression in the Eleventh Circuit: "whether the mootness principles in the Rule 23[²² ] class action context apply to collective actions brought under Sec. 216(b) of the FLSA."²³ Although the opinion in Cameron-Grant may have been the first to discuss in detail the applicability of Rule 23 mootness principles in FLSA collective actions, another three-judge panel had already considered the issue twice during this survey period.²⁴ The question of which panel was first is relevant because the court in Cameron-Grant held that Rule 23 mootness principles do not apply to FLSA collective actions,²⁵ but the earlier panel applied the Rule 23 principles to vacate a district court's dismissal of two FLSA collective actions for mootness.²⁶

The named plaintiffs in Cameron-Grant were four nurses who sued their employer for failure to pay overtime, failure to pay minimum wage, and retaliation. After finding that plaintiffs had produced no evidence that other similarly situated employees wanted to opt in to the action, the district court denied plaintiffs' motion to allow notification to potential opt-in plaintiffs. By the time the district court's denial of that motion was appealed to the Eleventh Circuit, however, all four plaintiffs had dismissed with prejudice all of their claims against defendant.²⁷ on appeal the court noted that settlement of a plaintiff's claims generally moots a cause of action.²⁸ However, when a Rule 23 class action is involved, a plaintiff may retain a "personal stake" in class certification even after the plaintiff's substantive claims have become moot.²⁹ But, as the court observed, a Rule 23 class action is a "fundamentally different creature" than a Sec. 216(b) collective action.³⁰ In a Rule 23 class action, the named plaintiff can establish a class regardless of whether the class members participate in the action, and any judgment rendered in the case is binding on every member of the class who does not "opt out."³¹ on the other hand, under Sec. 216(b), class members must opt in to the action before they can benefit from, or be bound by, its outcome.³² Based upon this distinction, the court held that a Sec. 216(b) plaintiff does not have an independent right to represent the class.³³ Thus, a named plaintiff's interest in the action is limited to the plaintiff's individual claims on the merits.³⁴

The court's holding in Cameron-Grant calls into question its holdings in Martinez-Mendoza v. Champion International Corp.³⁵ and Gonzalez-Sanchez v. International Paper Co.,³⁶ decided earlier in the survey period. In Martinez-Mendoza and Gonzalez-Sanchez, migrant workers moved for class certification under Sec. 216(b) of the FLSA.³⁷ In both cases, the United States District Court for the Northern District of Florida declared the issue of class certification moot after granting summary judgment against the named plaintiffs.³⁸ The Eleventh Circuit vacated both district court opinions, citing Rule 23 class action precedent for the proposition that "a plaintiff's capacity to act as representative of the class is not ipso facto terminated when he loses his case on the merits."³⁹

Despite a thorough analysis of the issue in Cameron-Grant, and the absence of any analysis in Martinez-Mendoza and Gonzalez-Sanchez, the apparently conflicting holdings of these cases have left the issue of mootness and class representation in FLSA collective actions unsettled in the Eleventh Circuit.

C. Joint Employment

Martinez-Mendoza and Gonzalez-Sanchez addressed not only collective-action procedure, but also the issue of joint employment.⁴⁰ In these two cases, concerning nearly identical facts and conclusions of law, migrant employees of farm labor contractors ("FLCs") were contracted to plant tree seedlings for Champion International Corporation ("Champion") and International Paper Company ("International Paper"), respectively. The FLCs recruited the plaintiffs from Mexico, trained them, transported them to the work site, and paid their wages. When the work season was over, the FLCs transported plaintiffs back to Mexico. In addition to planting seedlings for Champion and International Paper, plaintiffs planted trees for other entities that had contracted with the FLCs for those services. Plaintiffs sued the FLCs and the paper manufacturers for minimum wage and overtime violations under the theory of joint employment. The United States District Court for the Northern District of Florida granted summary judgment in favor of the paper manufacturers in both cases.⁴¹

The court of appeals in Martinez-Mendoza identified seven factors for determining "as a matter of economic reality" whether a joint employment relationship exists.⁴² Those factors are:

(1) whether the agricultural employer has the power, either alone or through the FLC, to direct, control, or supervise the worker or the work performed (such control may be either direct or indirect, taking into account the nature of the work performed and a reasonable degree of contract performance oversight and coordination with third parties); (2) whether the agricultural employer has the power, either alone or in addition to another employer, directly or indirectly, to hire or fire, modify the employment conditions, or determine the pay rates or the methods of wage payment for the worker; (3) the degree of permanency and duration of the relationship of the parties, in the context of the agricultural activity at issue; (4) the extent to which the services rendered by the worker are repetitive, rote tasks requiring skills which are acquired with relatively little training; (5) whether the activities performed by the worker are an integral part of the overall business operation of the agricultural employer; (6) whether the work is performed on the agricultural employer's premises, rather than on premises owned or controlled by another business entity; and (7) whether the agricultural employer undertakes responsibilities in relation to the worker which are commonly performed by employers, such as preparing and/or making payroll records, preparing and/or issuing pay checks, paying FICA taxes, providing workers' compensation insurance...