Wage & Hour Litigation Blog

Wage and Hour Division Seeks Information on Smartphones’ Impact on Hours Worked

Posted in DOL Enforcement

Authored by Alex Passantino

In the Department of Labor’s regulatory agenda for Spring 2015, the Wage & Hour Division announced a request for information (RFI) regarding “the use of technology, including portable electronic devices, by employees away from the workplace and outside of scheduled work hours outside of scheduled work outside of scheduled work hours.”  No formal rulemaking has been proposed; WHD simply is seeking information from stakeholders on how these issues impact hours worked under the Fair Labor Standards Act.  That information may—or may not—lead to a proposed rule.  The RFI is expected to be published in the Federal Register in August 2015.

Thanks to You, We’re Chambers USA’s Labor and Employment Team of the Year!

Posted in Uncategorized

We are thrilled to announce that thanks to the feedback of clients and friends like our loyal blog readers, Seyfarth’s Labor & Employment group has just been recognized for excellence with one of the most prestigious awards in the legal profession. Earlier this week, the team was named Labor & Employment Team of the Year at the 10th annual Chambers USA Awards for Excellence ceremony in New York. The Chambers Awards honor the achievements of leading law firms and lawyers across the country for pre-eminence in key practice areas and notable achievements during the past 12 months, including outstanding work, impressive strategic growth, and excellence in client service. Chambers described Seyfarth as “the market-leading labor & employment practice in the country with an expertise and track-record of successful, strategically effective defenses to complex, high-stakes  wage & hour litigation, employment discrimination class actions, and bet-the-company EEOC lawsuits.”

What means the most to us are the quotes from our clients, which included: “Aside from being legal experts in their fields, the firm’s attorneys are incredibly responsive and provide pragmatic, value-add legal advice,” and “I’ve had several occasions when they’ve given advice contrary to that of other firms—in every instance the lawyers at Seyfarth have been correct.”

At the end of the day, what motivates each and every L&E lawyer at Seyfarth is the goal of providing our clients with the level of service they deserve. It’s the driver of everything we do, and that’s why this award means so much to us.

THANK YOU to all our loyal blog readers for coming along on this ride with us. We appreciate it more than we can say.

Wage-Hour Audits: Lessons Learned From Chipotle’s Heartburn

Posted in Discovery

Co-authored by Dennis Clifford and Rachel Hoffer

Beloved burrito-maker Chipotle Mexican Grill has found itself in a situation messier than the finger foods that brought the company more than $4 billion in revenue last year. A magistrate judge in Scott v. Chipotle Mexican Grill, Inc. recently ordered that a report prepared by a human resources consultant, Cinda Daggett, is not protected by the attorney-client privilege because she wasn’t an agent of the law firm Chipotle hired back in 2011 to assess whether its Apprentices and Assistant Managers should be paid overtime. The report, or “job function analysis,” examines the work lives of a handful of Apprentices to, in the words of a Chipotle compensation analyst, “get a really good understanding of what Apprentices do in their day-to-day jobs” and provide the law firm “information on the ground so that they could give us an opinion on what we were asking.”

The plaintiffs in Scott—and there are almost 600 of them—claim that the quick-service giant misclassified its Apprentices and Assistant Managers as exempt from federal and state overtime laws. So, if that report helps them show that Chipotle willfully violated wage-hour laws by failing to pay these employees overtime, it could mean mucho dinero for the plaintiffs.

But why wasn’t that report—which was addressed to the lawyers, not Chipotle—privileged? After all, while the applicable standard varies, courts across the country have found that the attorney-client privilege can apply to communications with a non-lawyer hired by a law firm, as long as the communication is made confidentially for the purpose of providing legal advice. Well, for starters, the law firm that received the report had already offered its opinion on whether the position was exempt from overtime laws. In fact, by the time the report came out, Chipotle had already hired a second firm for a second opinion—and had received that second opinion.

Moreover, the court felt that the report didn’t tell the lawyers anything essential to their legal analysis that they couldn’t figure out on their own. Daggett was not, for instance, interpreting complicated scientific concepts beyond the realm of the lawyers’ expertise so that the lawyers could turn around and provide legal advice. No, at the end of the day, she was explaining job duties to employment lawyers, and that’s something the lawyers could have learned through direct communications with the client. Plus, Chipotle couldn’t point to any evidence that Daggett was in fact hired to assist the lawyers in providing legal advice. When Chipotle told the Apprentices it had hired a consultant, it explained the consultant was coming to their stores to “study what it is that really good Apprentices do at our restaurants.” There was no indication that communications with the consultant were confidential or for the purposes of obtaining legal advice. So, the magistrate judge ruled in March, the Daggett report was not privileged.

Still hoping to keep the report under wraps, Chipotle objected to the magistrate judge’s order, then asked her for permission to file a motion for post-judgment relief. After accepting short statements from both sides, the judge let Chipotle know that she wasn’t going to change her mind based on the additional information Chipotle provided. First, “newly discovered” emails Chipotle found between Daggett and the lawyer served only to show that Daggett was not sure whether her report was supposed to go to the attorney or straight to Chipotle. In other words, even Daggett was not certain she was hired to assist with providing legal advice. Similarly, the unsigned, undated confidentiality agreement Chipotle apparently sent to Daggett only underscored that she was working directly for the company, not its lawyers. After the court’s most recent ruling, it seems Chipotle will be forced to spill the refried beans about Daggett’s findings.

With the Department of Labor poised to issue new regulations on the Fair Labor Standards Act’s white-collar exemptions, proactive employers across the country, like Chipotle, soon will take a long, hard look at whether employees previously classified as exempt still qualify under the new rules. But if they hope to keep those reviews privileged, they’ll learn from Chipotle’s example and hire a lawyer, not a consultant.

Court Puts the Brakes on Overtime for Drivers—No Interstate Trips? No Problem!

Posted in Overtime

Court_of_Appeals_3rd_Circuit_SealCo-authored by Abad Lopez and Noah Finkel

The Third Circuit put a screeching halt to the contention that drivers must actually cross state lines to be exempt from overtime under the Motor Carrier Act (“MCA”). In Resch v. Krapf’s Coaches, Inc., the court ruled that drivers were exempt from overtime based on the mere possibility of driving across state lines. In a broad interpretation of “interstate commerce” under the MCA, the court ruled that it does not matter whether the driver in question actually makes an interstate run, so long as the driver is subject to being assigned to such a run at any time.

The case was filed as a collective action by drivers for Krapf’s Coaches Inc. (“KCI”) alleging that they had been improperly denied overtime wages.  KCI provided bus and shuttle services on set routes—out of thirty two set routes, only four crossed state lines. In fact, during the class period, the share of total revenue from KCI’s interstate routes fluctuated between 1.0% to 9.7%, and of the total trips that plaintiffs drove, only 1.3% required them to cross state lines. Indeed, several plaintiffs never made a single out-of-state run. Not surprisingly, plaintiffs argued that since the company derived such a small percentage of its revenue from interstate routes, they were not subject to the MCA exemption, and thus should be paid overtime.

Conceding that they were employed by a motor carrier and, as drivers of motor vehicles, were subject to U.S. Department of Transportation (“DOT”) regulation, the only dispute was whether plaintiffs—many of whom rarely or never crossed state lines—satisfied the requirement of engaging in activities “in interstate commerce” within the meaning of the MCA. In finding for KCI, the court ruled that, despite the small percentage of routes that crossed state lines, there only need be a “reasonable expectation” that the plaintiffs might have to cross state lines during the course of their duties. Further, since KCI retained the sole discretion to assign any driver to any route, including any interstate routes, those drivers could at all times reasonably expect to engage in interstate commerce. The character of their duties, which required drivers to be available to make interstate runs at any time, made them exempt from overtime under the MCA.

KCI’s involvement in interstate commerce, albeit relatively slight, allowed it to take advantage of a provision in the MCA which exempts workers subject to oversight by the DOT from overtime protections. The court made abundantly clear that the character of the duties—if such duties require interstate travel—are far more relevant  than the amount of time an employee may spend actually performing those duties. Indeed, many courts find drivers exempt under the MCA even without the possibility that they would cross state lines. In those cases, drivers are found to be exempt if their duties are part of a “practical continuity of movement of goods or people” in a larger interstate journey. Thus, even some drivers who would never be expected to cross state lines may qualify for the MCA exemption.

Genesis Healthcare May Be Merely the First Book in Bible on Mooting Class/Collective Actions

Posted in Conditional Certification, Rule 23 Certification

Authored by Steve Shardonofsky

In the beginning, the U.S. Supreme Court decided in Genesis Healthcare that an FLSA case is moot when the plaintiff accepts an offer of full relief. As we noted in our previous blog, the decision left open, however, the question of what happens when the plaintiff affirmatively declines the offer or when the offer expires, which is what happens in most cases (under Rule 68, an offer not accepted within 14 days is considered withdrawn). In addition, because Genesis Healthcare involved a collective action under the FLSA as opposed to a class action under Rule 23, the Supreme Court did not answer whether a Rule 68 offer of full relief to a class representative moots a wage-hour action that includes a Rule 23 claim under state law (or a case that involves only state law wage-hour claims). The Court may soon answer these questions and write the second, much-anticipated chapter in this legal saga.

On May 18, the U.S. Supreme Court agreed to review in Gomez v. Campbell-Ewald Company whether a potential Rule 23 class under the Telephone Consumer Protection Act may be mooted by an offer of complete relief. According to the class-action complaint filed by Jose Gomez in March 2010, Campbell-Ewald Company allegedly sent thousands of unsolicited text messages through a subcontractor in violation of the TCPA as part of the U.S. Navy’s recruitment efforts. While Gomez was still the only named plaintiff in the case and before the case was certified as a class action, the company offered to pay him (under Rule 68) for each unsolicited text message substantially more than the damages he could have recovered under the statute. In September 2014, the U.S. Ninth Circuit Court of Appeals reversed the lower court’s order granting summary judgment in favor of the company on grounds of derivative sovereign immunity and holding that the putative Rule 23 class action could continue even though the defendant offered full relief to the sole plaintiff before he moved for class certification. As the U.S. Chamber of Commerce noted in its amicus brief in support of the writ for certiorari, the 9th Circuit’s ruling harms employers and the judicial system because it encourages lawsuits and discourages settlements. More fundamentally, however, the ruling harms plaintiffs because it “allows putative class counsel to maintain federal lawsuits for their own benefit, even when their only client stands to gain nothing,” and there is no longer a live case or controversy.

In a reply petition for a writ of certiorari filed by Campbell-Ewald, the company emphasized that the case “presents a clean opportunity to decide the issue left open in Genesis Healthcare, as well as the related–and equally important–question of when an offer of complete relief moots a class claim.” The Court’s guidance on these issues is necessary for employers and wage-hour practitioners alike, because a Circuit split exists on whether a Rule 68 offer of full relief to a class representative moots a Rule 23 class action. Most recently, the 11th Circuit in Stein v. Buccaneers Limited Partnership joined the 3rd, 5th, 9th, and 10th Circuits in holding that it does not. By granting the writ, the Supreme Court may well be ready to answer this important question once and for all, and provide additional guidance on whether a court loses jurisdiction of an FLSA case and must dismiss it before it blossoms into a collective action after an unaccepted offer of judgment.

Like Genesis Healthcare, this the case is certain to prove to be a key precedent in wage-hour cases–under the FLSA and Rule 23. So stay tuned … we will keep our readers updated on any future developments.

Overtime Exemption Rule to OMB

Posted in DOL Enforcement, Misclassification/Exemptions

Authored by Alex Passantino

According to a blog post by Secretary Perez, the Department of Labor has submitted its proposed rule to OMB for review.  Typically, OMB review takes 30 to 60 days (or longer).  On this timetable, DOL still may hit its most recent target of “Spring” for publication of a proposed rule.

While at OMB, the public has no details on the particulars.  The specific provisions only will be revealed once the proposed rule clears OMB review and is published in the Federal Register.

We will, of course, keep you updated of further developments.

Whatcha Talkin’ Bout: Oral Complaints Made to Employer Constitute Protected Activity under FLSA, Says Second Circuit

Posted in Uncategorized

Co-authored by Steve Shardonofsky and Howard M. Wexler

In 2011, the U.S. Supreme Court held in Kasten v. Saint-Gobain Performance Plastics Corp., that oral complaints of a violation of the Fair Labor Standards Act can constitute protected activity under the FLSA’s anti-retaliation provision.  But the question whether an oral complaint made to a private employer rather than to the government qualifies as protected activity was not before the Court in Kasten, and the case did not resolve a split among the Courts of Appeals on this issue.

In Greathouse v. JHS Security Inc. et al., the Second Circuit Court of Appeals joined the First, Fourth, Fifth, Seventh, Eighth, Ninth, Tenth, and Eleventh Circuits and held that Section 215(a)(3) of the FLSA does not require an employee to complain to a government agency as a predicate for an FLSA retaliation claim.  The Court, however, took pains to emphasize that not every “oral complaint” will be enough to state an FLSA retaliation claim as the complaint must be “sufficiently clear and detailed for a reasonable employer to understand it, in light of both content and context, as an assertion of rights protected by the statute [FLSA] and a call for their protection.”

Second Circuit’s Decision

The Greathouse plaintiff complained to his boss that he had not been paid in several months. The plaintiff alleged that his employer responded by saying that he would pay the plaintiff when he felt like it and by then pointing a gun at the plaintiff.  Understanding this exchange as ending his employment, the plaintiff two weeks later filed a lawsuit for unpaid wages as well as retaliation.  He alleged that his employer constructively discharged him in retaliation for his complaint about unpaid wages, thereby violating the FLSA and New York Labor Law’s anti-retaliation provisions.  The district court entered a default judgment in favor of the plaintiff on his claim for unpaid wages, but rejected his retaliation claim because the Second Circuit previously held that informal oral complaints to supervisors did not amount to “filing a complaint” under the FLSA and therefore could not support a retaliation claim.

The Second Circuit, “[b]oth impelled and guided by Kasten,” examined the legislative history of the FLSA and reversed its prior stance, holding that the “FLSA’s remedial goals counsel in favor of construing the phrase ‘filed any complaint’ in section 215(a)(3) broadly, to include intra-company complaints to employers.”  But the Second Circuit emphasized that not all oral complaints constitute protect activity.  Whether an oral complaint constitutes protected activity is a “context-dependent inquiry” and not all “grumbles in the hallways about an employer’s payroll practice” will rise to the level of protected activity as “some degree of formality” is required.  This holding is consistent with other Courts of Appeals that have addressed the issue, such as the First Circuit and Ninth Circuit.

Implications for Employers

Employers are well advised to be attentive to their employees’ complaints.  Following Kasten, and now Greathouse, it is even more important for employers to be sensitive to employees’ intra-company oral as well as written complaints regarding wages, overtime, and hours worked.  Managers and supervisors should be trained to recognize complaints under the FLSA and corresponding state laws and to respond to them appropriately.  Whether an internal complaint rises to the level of protected activity is a context-specific inquiry.  While the courts continue to assert that there are no “magic words” that an employee must use to assert a complaint and that generalized statements or complaints regarding pay practices may not rise to the level of protected activity under the FLSA (or even under the National Labor Relations Act), this should not embolden employers to ignore vague complaints.  After all, although you may believe today that a particular complaint is mere “venting” or “blowing off steam,” a court or a jury may later disagree.  Of course, following an employee’s complaint, employers need to ensure that any adverse action is based on legitimate, non-retaliatory reasons and not in response to the complaint.

Tech Companies Targeted For On-Demand Independent Contractors

Posted in Independent Contractors

Co-authored by Rob Whitman and Adam Smiley

If you’re working late at the office tonight, chances are you’ll order food online. Trying to get home after a fun night out? A car is just an app away. If you’re having company over but haven’t had time to clean, maybe you’ll hire a house cleaner through the online service you just read about. Want to go grocery shopping without leaving your couch? A full fridge is available with just a few clicks or swipes. Snoop Dogg is even getting into the action with a delivery app for medical marijuana.

Welcome to the “on demand” economy.

This fast growing type of commerce—largely driven by tech startups—allows consumers to quickly and easily buy goods and services with their computers, tablets, and smartphones. The speed of delivery is possible because a fleet—literally or figuratively—of contract workers is available to provide these goods and services 24/7. These workers have the flexibility to accept many jobs per day as a primary source of income, or just a few per week as a secondary source. This model creates a fluid but deep pool of workers, who are classified under the law not as “employees” but as “independent contractors,” and who may freely pick and choose when and where they perform work for these online or app-based companies.

This blog has previously chronicled the difficulties of classifying workers as independent contractors in more traditional industries, such as janitors and cable installers. Lawsuits challenging the classification under the FLSA and state law are common, with plaintiffs seeking significant back wages and liquidated damages. We’ve also blogged extensively about litigation involving interns, another non-traditional job arrangement that shares many similarities with the independent contractor analysis. Interest groups for independent workers and freelancers are growing in strength and visibility, and these organizations may embolden workers to challenge their classification status. Compounding the risk are the increased efforts of the Department of Labor, IRS, and state agencies to crack down on worker misclassification.

The first wave of lawsuits has already arrived, with suits filed in California and New York against app-based firms that provide car rides, house cleaning and home repair, and personal assistant services.

In short, the “on demand” economy appears to be the newest front of wage and hour lawsuits targeting non-traditional and independent employment arrangements.

So how is a business supposed to know if a worker may be designated an independent contractor? The Supreme Court has never created a bright-line test. Rather, the Court supports a totality of the circumstances approach that evaluates the entirety of the economic relationship between the business and the worker. The Department of Labor summarizes those key factors as follow, and notes that no single one is regarded as controlling:

  1. The extent to which the work performed an integral part of the employer’s business;
  2. Whether the worker’s managerial skills affect his or her opportunity for profit and loss;
  3. The relative investments in facilities and equipment by the worker and the employer;
  4. The worker’s skill and initiative;
  5. The permanency of the worker’s relationship with the employer; and
  6. The nature and degree of control by the employer.

The challenge of evaluating independent contractor status in app-based companies can be even more difficult. In two recent cases against Uber and Lyft, the companies sought summary judgment on the drivers’ independent contractor status. The judge in the Lyft case evaluated the relevant factors and pointedly noted, “Lyft drivers don’t seem much like employees … [b]ut Lyft drivers don’t seem much like independent contractors either.”

Although the judge in that case did not decide the ultimate issue, his balancing test highlighted the application of these legal standards to “on-demand” jobs.  Facts in favor of employee status were: the company retained a good deal of control over drivers’ conduct once they accepted a job; it published guides and FAQs that governed drivers’ behavior and their decision to choose rides and reserved the right to penalize drivers who did not follow its guidelines; the company could terminate a driver at any time, without cause; and the work performed by the drivers was “wholly integrated” into Lyft’s business. Facts supporting independent contractor status were: the drivers’ flexibility in deciding when and how often they work; the parties’ mutual belief that they were entering into an independent contractor relationship; and the drivers’ use of their own cars. Ultimately, these factors led the judge to conclude that a dispute existed as to whether Lyft drivers were properly classified as independent contractors, and that only a jury could make that factual determination.

Start-ups seeking to become the next high-profile player in the on-demand economy need to carefully consider these important legal issues. Rather than follow the lead of the established names in this space, they must evaluate the tasks their workers are performing, the permanency of the relationships, and the level of control the business will have over these individuals, among other factors. Failure to do so could be the recipe for a lawsuit, and with litigation comes potential liability for minimum wage, overtime, and a myriad of other legal obligations.

New York AG Investigates Retailers’ Call-in Practices

Posted in Misclassification/Exemptions, State Laws/Claims

Authored by Robert Whitman and Caitlin Ladd

New York Attorney General Eric Schneiderman has sent investigative letters to at least 13 nationwide retailers requesting information about their scheduling practices for non-exempt employees. The effort is part of an inquiry conducted in response to reports about widespread use in the retail industry of unpredictable on-call shifts, which are subject to strict regulation under the New York Labor Law.

The letters, sent last week by the AG’s Labor Bureau, ask the retailers whether they use on-call shifts that require non-exempt workers to make themselves available on short notice. In addition to inquiring about the use of on-call shifts generally, the AG is interested in learning about computerized scheduling systems that allow retailers to forecast staffing needs.

While the investigative letters express concern about the overall negative impact of unpredictable schedules on employees, particularly low-wage workers, the AG cited only one applicable regulation: section 142.23 of the Minimum Wage Order for Miscellaneous Industries and Occupations (12 N.Y.C.R.R. § 142.23), which provides that “an employee who by request or permission of the employer reports for work on any day shall be paid for at least four hours, or the number of hours in the regularly scheduled shift, whichever is less, at the basic minimum wage.” The New York Department of Labor has interpreted this provision to require call-in pay whenever an employer sends an employee home or otherwise directs an employee to cease working before the end of his or her regularly scheduled shift. Call-in pay may be warranted where an employee is required to work a shift of fewer than four hours or to attend a meeting or training that is not held during the regularly scheduled shift. (Although the rule requires call-in pay at the applicable minimum wage rate, the DOL has stated that an additional payment is required only where an employee’s wages for the workweek are less than the minimum wage and overtime rate for all hours worked plus any call-in pay owed.)

Schneiderman’s intentions and future actions remain to be seen. The AG has broad authority under the New York Executive Law to investigate potential violations of State law, and the Labor Bureau (according to its website) “is principally charged with, and has been nationally recognized for, defending labor standards in low-wage industries by aggressively enforcing the laws protecting low-wage workers.” In the past, the AG’s office has sent similar letters with respect to the use of payroll debit cards to investigate potential violations of the Labor Law, and has followed up with subpoenas and settlement efforts. Likewise, the AG has published informative reports and corresponding proposed legislation based on its findings.

Here, despite the initial publicity blitz regarding the investigation, the AG may find that the retailers being investigated are fully compliant with the call-in pay regulations and take no further action at all. Unfortunately for the affected employers, the office does not always notify them when they are “in the clear,” and they may remain uncertain whether the AG ever intends to take follow-up action or has simply closed its file.

In the meantime, this investigation serves as a good reminder for employers to review their on-call practices to ensure compliance with the laws of the particular states in which they operate. New York is not alone in requiring call-in pay. Other such jurisdictions include California, Connecticut, D.C., Massachusetts, New Hampshire, New Jersey, Oregon, and Rhode Island, all of which have wage-payment requirements for instances in which an employee reports to work per the employer’s instruction and works fewer than the expected hours of work or statutory minimum.

Out of the Pizza Oven, Into the Fire: Any Way You Slice It, Lenient Standard at Conditional Certification Stage Doesn’t Cut It

Posted in Conditional Certification, Decertification

Arkansas-Co-authored by Abad Lopez and Noah Finkel

The two-step “send notice now/worry later” approach to FLSA collective actions — in which courts approve notice to potential collective action members under the lenient standard but comfort defendant-employers with the bromide of “don’t worry, we can revisit the issue at the decertification stage under a more rigorous standard” — continues to leave a bad taste.

Those who follow FLSA collective action litigation are familiar with the recipe. Motions for conditional certification usually are subject to a “lenient standard” under which a plaintiff need carry only a “low burden” in making a “modest showing.” These motions thus typically result in a notice of collective action being issued to all those meeting the collective action definition. Dozens, hundreds, or even thousands then opt in to the case and substantially increase a defendant-employer’s potential exposure. Substantial discovery then occurs, and then the defendant-employer files a motion for decertification. Viewing that motion under a far more rigorous standard, courts often undo conditional certification and find that the collective action members are not in fact similarly-situated to each other. The dozens, hundreds, or even thousands who opted in then are dismissed from the case without prejudice.

So damage repaired, right? Unfortunately, no. Those former opt-ins — who would not exist but for the conditional certification order — can remain a significant cost and potential liability for an employer. They may file new lawsuits separately or in smaller groups, or they may even find their way back into the current lawsuit.

In other words, by refusing to conduct a meaningful analysis at the conditional certification stage, courts invite numerous individuals to join litigation through the collective action mechanism, even when their claims do not belong in the same lawsuit. Defendants then bear the burden of defending multiple lawsuits that, but for the ease of the two-step approach, probably would not have been brought to begin with.

A recent case in Arkansas illustrates this point. In Conners v. Catfish Pies, Inc., et al., an Arkansas federal judge conditionally certified a lawsuit accusing Gusano’s Chicago-Style Pizzeria restaurant operators of using illegal tip pools to pay waiters less than the minimum wage. Conners, who worked as a server at the Gusano’s location in Conway, Arkansas, claimed she was forced to pool her tips with cooks and other kitchen employees, who typically do not receive gratuities, in violation of the FLSA. Conners argued that because Gusano’s tip-sharing agreement was invalid, the company was required to pay her a minimum wage of $7.25 per hour, rather than the $2.75 plus tips that she was given.

Following conditional certification under the “lenient standard,” more than a dozen current and former waiters joined the lawsuit. Later, the court purportedly undid the damage when it decertified the lawsuit using the more rigorous analysis in the second step of the two-step certification process typically utilized for collective actions under the FLSA. In its decertification order, the court found that the plaintiffs were in fact not “similarly situated” because different workers were employed by different entities that operated the restaurants, and thus were subject to different pay practices.

But what seemed like a victory for the defendants turned out to be a headache. A few months later, the judge reconsidered part of his decision to decertify the collective action and split the case into four separate trials. Although the court had previously dismissed the claims of all opt-in plaintiffs in its decertification order, it allowed each opt-in plaintiff to join the lawsuit as a named plaintiff against the respective restaurant where he or she was employed. Instead of a victory, the restaurants now have to defend against multiple lawsuits by plaintiffs who were not properly before the court in the first place. For these restaurants, decertification didn’t undo the damage of the conditional certification order. Ultimately, decertification compounded their problem. And to add insult to injury, that is only after these restaurants spent a lot of time and money after conditional certification to get to decertification.

The Conners v. Catfish Pies litigation is a reminder that conditional certification, though it can be undone, has long-term consequences for defendant-employers. Even if the case ceases being a collective action, it nevertheless can transform into a multi-named-plaintiff case, or it can morph into dozens or more separate cases. Defendants need to continue to make this clear to judges when they oppose conditional certification.