Tuesday, May 8, 2012

3d Cir.: Simultaneous State and Federal Wage and Hour Class Actions A-OK

Welcome to an employer's worst nightmare. Does it get much worse than wage and hour litigation under the Fair Labor Standards Act (FLSA)? Well sure, it could be an FLSA collective action. Now, imagine that it gets even worse than that . . . an FLSA collective action and a state statute wage and hour class action at the same time! [Cue the thunder and lightning].

The two claims have inconsistent procedural provisions, which some have argued make simultaneous claims "inherently incompatible." The state claims would proceed under the Fed. R. Civ. P. 23 "opt-out" provisions, while the FLSA collective action proceeds under the statute's "opt-in" provisions. Some people also argue that the FLSA preempts the state provisions.

Well, Knepper v. Rite AidCorp., No. 11-1684 (3d. Cir. Mar. 27, 2012) (opinion here) was a double-whammy for employers. First:
We join the Second, Seventh, Ninth, and D.C. Circuits in ruling that this purported “inherent incompatibility” does not defeat otherwise available federal jurisdiction.
Second, the Court also held that the state laws are not preempted.

The end result? Employers here in Pennsylvania (and the rest of the Third Circuit) may face "hybrid" wage and hour class/collective actions under the FLSA and state laws. Doesn't that sound like fun?

Image: We had a flood at Lawffice Space headquarters - no one survived. By "Lawffice Space headquarters," I mean my laptop. And by "flood" I mean a glass of water.