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Court Ruling May Ease Threat of Class-Action FLSA Suits

by on
in Employment Law,Human Resources

In recent years, employers have faced an onslaught of Fair Labor Standards Act (FLSA) class-action lawsuits over allegedly unpaid overtime. While a lawsuit by one or two former employees won’t likely amount to much, employer liability increases dramatically when those suits turn into class actions.

Employees and their lawyers have been taking advantage of state laws that typically allow one plaintiff to represent all “similarly situated” employees unless those employees opt out of the lawsuit. But the Fair Labor Standards Act allows class actions only if employees opt in: that is, decide to join the lawsuit.

Now, a second district court in the 3rd Circuit has dismissed combined state and federal overtime class-action lawsuits. In Otto v. Pocono Health Systems (No. 4:06-CV-1186), the Middle District of Pennsylvania joined the District Court of New Jersey in ruling that when both state and federal overtime laws are at the heart of a lawsuit, only those employees who opt in will be part of the case.

Look for the 3rd Circuit Court of Appeals to make a definitive decision.  

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