Publications

Understanding FLSA and the Collective Action Process

In-House Texas
07.04.05

In May 2005, the U.S. District Court for the District of Oregon entered a judgment in a collective action against Farmers Insurance Exchange for $54.5 million for unpaid overtime. Even more remarkable, the Judgment does not include $210 million Farmers paid to resolve overtime claims in California. Many times, companies ignore large judgments and settlements, because they often involve resolution of California state overtime claims.

The recent Farmers judgment proves this way of thinking is risky. To understand and manage risks associated with the Fair Labor Standards Act, corporate counsel need to understand the FLSA and the collective action process. Collective actions under the FLSA are very different from a traditional class action. The standard certification process for an FLSA collective action is lenient — generally that the potential members are "similarly situated." Based on this standard, courts will usually conditionally certify the class and order notice to all potential members of the action. Note that the FLSA does not follow the class action procedures in Federal Rule of Civil Procedure 23. In a Rule 23 class, patential members of the class are bound by the results unless they opt-out of the class. The end of the case generally means the end of potential liability with respect to the class certified unless someone specifically opted out of the class.

Not so with an FLSA collective action. Under §16(b) of the FLSA, a potential member must opt-in to the suit or will retain his or her rights to file an individual suit or separate collective action.

Read more.

 

The publications contained in this site do not constitute legal advice. Legal advice can only be given with knowledge of the client's specific facts. By putting these publications on our website we do not intend to create a lawyer-client relationship with the user. Materials may not reflect the most current legal developments, verdicts or settlements. This information should in no way be taken as an indication of future results.

Search Tips:

You may use the wildcard symbol (*) as a root expander.  A search for "anti*" will find not only "anti", but also "anti-trust", "antique", etc.

Entering two terms together in a search field will behave as though an "OR" is being used.  For example, entering "Antique Motorcars" as a Client Name search will find results with either word in the Client Name.

Operators

AND and OR may be used in a search.  Note: they must be capitalized, e.g., "Project AND Finance." 

The + and - sign operators may be used.  The + sign indicates that the term immediately following is required, while the - sign indicates to omit results that contain that term. E.g., "+real -estate" says results must have "real" but not "estate".

To perform an exact phrase search, surround your search phrase with quotation marks.  For example, "Project Finance".

Searches are not case sensitive.

back to top