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New Ruling May Help Limit Class-Action Cases in PA

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in Compensation and Benefits,Human Resources

Attorneys looking to create extra trouble for employers have lost an important class-action ruling in Pennsylvania. Lawyers no longer will be able to file federal lawsuits and state lawsuits together in federal court in an effort to get around a federal law that says employees must opt into (not opt out of) class-action lawsuits. The lawyers had hoped that by also suing under state laws, they would be able to rope more employees into their class-action cases.

Recent case: Traci Otto and John Junker sued the Pocono Health System for allegedly denying them overtime pay under the Fair Labor Standards Act and the Pennsylvania Minimum Wage Act. The two asked to represent a class of other employees with similar claims.

Federal lawsuit rules say that only employees who ask to be part of the lawsuit are counted, while state class-action rules say that everyone is part of the lawsuit unless they choose to opt out. Lawyers know that the class of plaintiffs is always larger when employees have to opt out instead of opting in, so they often file state and federal claims together.

But that trick won’t work in Pennsylvania anymore. The court dismissed this case, saying that the federal rule wins and employees must opt into such lawsuits. Now the class action will include only those employees who write and tell the court they want to be part of the lawsuit. That’s likely to be far fewer than before the ruling. (Otto & Junker v. Pocono Health Systems, No. 4:06-CV-1186, MD PA, 2006)  

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