Seyfarth Synopsis: Two recent decisions by federal courts in Massachusetts highlight barriers to litigating FLSA cases on a nationwide basis — including a personal jurisdiction defense that could preclude a nationwide collective in many FLSA cases.
The defendant in the first case was a Fortune 100 company that conducts business pervasively throughout the country. Yet the defendant defeated conditional certification of a nationwide FLSA collective action by showing that the court lacked personal jurisdiction as to claims by non-Massachusetts workers.
In denying a motion to allow workers nationwide to join the suit, the United States District Court for the District of Massachusetts noted that defendant isn’t incorporated in and doesn’t have its principal place of business in Massachusetts. Therefore, under the Supreme Court’s rulings in Daimler and Bristol-Myers Squibb, the defendant could be subject to personal jurisdiction in Massachusetts only if the conduct forming the basis for a plaintiff’s claim occurred in Massachusetts. As the defendant argued, however, nothing that happened in Massachusetts affected the claims of workers who never lived or worked there. Accordingly, the district court ruled that it had no power to consider the claims of any non-Massachusetts workers and that only Massachusetts workers should receive notice and an opportunity to opt in to the action.
In the second case, brought by employees of a multi-state debt collection company, the court found insufficient evidence that the employer had a company-wide commission policy, and therefore ruled that plaintiffs did not show that employees nationwide suffered from a common policy or practice. Accordingly, the court limited the issuance of notice of the collective action to a group of Massachusetts employees.
Taken together, these recent cases demonstrate two ways in which employers can resist litigation of FLSA claims on a nationwide basis. As a threshold matter, an employer that is sued in a state where the employer is not a “citizen” should evaluate whether a proposed nationwide action may be dismissed for lack of personal jurisdiction as to out-of-state plaintiffs. Additionally, even in the context of an early motion for conditional certification, plaintiffs still must show that a proposed group of opt-in plaintiffs suffered from a common unlawful policy or plan. Where such evidence is lacking, even employers with widespread operations may be able to prevent nationwide certification.