Fair Labor Standards Act Collective Action Survives Because of Possible Subclaims

By Ted Olsen

In class action litigation under Rule 23 of the Federal Rules of Civil Procedure, such as employment discrimination class actions, we and other defense counsel often strive to defeat a proposed class by showing to the court that the individual claimants and their claims are so dissimilar that class treatment is inappropriate. We argue that the putative class members lack the "commonality" and "typicality" required for class certification. We also argue that the named plaintiffs are not adequate representatives of the putative class members, because of the factual and legal dissimilarities of their assorted claims. Likewise, so-called "collective actions" for overtime pay or minimum wages under the Fair Labor Standards Act (different from Rule 23 class actions) are often defeated by employers with evidence that the individuals in the proposed class are not similarly situated, due to the factual and legal variations in their individual claims.

When a proposed Rule 23 class is on the verge of defeat, however, some plaintiffs - in an effort to save the class action to some extent - will resort to another strategy, proposing subclasses. The subclasses are separate pieces of the originally proposed class, and if the Rule 23 class certification requirements can be met by a subclass, the subclass can be certified, even though there may be huge differences between the different subclasses. Under separate analysis, each subclass may be certified.

For instance, if all hiring and pay decisions at a supermarket chain are left to the Store Managers at each location, plaintiffs most likely could not proceed with a Rule 23 class action on behalf of all employees in all the stores, as the different identities of the different decision-makers on each hiring and pay decision would make class treatment of the claims inappropriate. But if the plaintiffs divided the class into subclasses, with each subclass consisting of the employees at each separate store, certain subclasses - and perhaps all of them - might be certified for class treatment.

A major unanswered question is whether this subclass strategy is available in "collective actions" under the FLSA. In a recent decision, the Seventh Circuit Court of Appeals ruled that FLSA plaintiffs may pursue such subclaim collective actions. Alvarez v. Chicago, Case No. 09-2020 (7th Cir. May 21, 2010).

In Alvarez, two paramedics for the City of Chicago brought two collective actions, challenging the City's alleged miscalculation of their overtime pay and the overtime pay of all the City's paramedics in ten different ways. Each paramedic's overtime pay had been calculated differently; but none had been affected by all ten challenged practices. The plaintiffs argued that, if each of the ten practices was decided, the calculation of individual awards would be fairly routine. The district court denied certification of the proposed collective action, in part, because the putative class members were not similarly-situated. The Seventh Circuit reversed, however, holding that the district court should have considered whether each of the ten practices could be divided into a separate subclaim, and that each subclaims could be certified as a separate collective action (or as an alternative to the original collective action).

Sherman & Howard has prepared this advisory to provide general information on recent legal developments that may be of interest. This advisory does not provide legal advice for any specific situation. This does not create an attorney-client relationship between any reader and the Firm. If you want legal advice on a specific situation, you must speak with one of our lawyers and reach an express agreement for legal representation.

	Contact Us Services Attorneys News and Events Publications About the Firm Inclusiveness Careers In the Media Events and Registration Press Releases Speaking Engagements Articles Client Advisories Subscriptions History Offices Pro Bono Interlaw Contact Us Culture Legal Opportunities Support Staff Publications Client Advisories Home > Publications > Client Advisories > View Fair Labor Standards Act Collective Action Survives Because of Possible Subclaims By Ted Olsen In class action litigation under Rule 23 of the Federal Rules of Civil Procedure, such as employment discrimination class actions, we and other defense counsel often strive to defeat a proposed class by showing to the court that the individual claimants and their claims are so dissimilar that class treatment is inappropriate. We argue that the putative class members lack the "commonality" and "typicality" required for class certification. We also argue that the named plaintiffs are not adequate representatives of the putative class members, because of the factual and legal dissimilarities of their assorted claims. Likewise, so-called "collective actions" for overtime pay or minimum wages under the Fair Labor Standards Act (different from Rule 23 class actions) are often defeated by employers with evidence that the individuals in the proposed class are not similarly situated, due to the factual and legal variations in their individual claims. When a proposed Rule 23 class is on the verge of defeat, however, some plaintiffs - in an effort to save the class action to some extent - will resort to another strategy, proposing subclasses. The subclasses are separate pieces of the originally proposed class, and if the Rule 23 class certification requirements can be met by a subclass, the subclass can be certified, even though there may be huge differences between the different subclasses. Under separate analysis, each subclass may be certified. For instance, if all hiring and pay decisions at a supermarket chain are left to the Store Managers at each location, plaintiffs most likely could not proceed with a Rule 23 class action on behalf of all employees in all the stores, as the different identities of the different decision-makers on each hiring and pay decision would make class treatment of the claims inappropriate. But if the plaintiffs divided the class into subclasses, with each subclass consisting of the employees at each separate store, certain subclasses - and perhaps all of them - might be certified for class treatment. A major unanswered question is whether this subclass strategy is available in "collective actions" under the FLSA. In a recent decision, the Seventh Circuit Court of Appeals ruled that FLSA plaintiffs may pursue such subclaim collective actions. Alvarez v. Chicago, Case No. 09-2020 (7th Cir. May 21, 2010). In Alvarez, two paramedics for the City of Chicago brought two collective actions, challenging the City's alleged miscalculation of their overtime pay and the overtime pay of all the City's paramedics in ten different ways. Each paramedic's overtime pay had been calculated differently; but none had been affected by all ten challenged practices. The plaintiffs argued that, if each of the ten practices was decided, the calculation of individual awards would be fairly routine. The district court denied certification of the proposed collective action, in part, because the putative class members were not similarly-situated. The Seventh Circuit reversed, however, holding that the district court should have considered whether each of the ten practices could be divided into a separate subclaim, and that each subclaims could be certified as a separate collective action (or as an alternative to the original collective action). Sherman & Howard has prepared this advisory to provide general information on recent legal developments that may be of interest. This advisory does not provide legal advice for any specific situation. This does not create an attorney-client relationship between any reader and the Firm. If you want legal advice on a specific situation, you must speak with one of our lawyers and reach an express agreement for legal representation. ©2010 Sherman & Howard L.L.C. July 7, 2010 Copyright 2000-2012 Sherman & Howard L.L.C. All rights reserved. Privacy Policy \| Terms of Use