Calderone v. Scott

U.S. Circuit Court of Appeals for the Eleventh Circuit, Sept. 28, 2016; 2016 WL 5403589

In 1938, Congress passed the Fair Labor Standards Act (the “FLSA”), addressing child labor, minimum and overtime wages, and the then-current 44-hour work week. For the next nine years, unions backlogged the courts by filing thousands of FLSA cases demanding backpay for its members’ portal-to-portal travel, resulting in the aptly-named Portal-to-Portal Act of 1947. The Act amended the FLSA, permitting class redress for violations of the latter law, but only if class members “opted in” to the litigation. See 29 U.S.C. §216(b). The policy behind the opt-in provision was “to stave off ‘excessive litigation spawned by plaintiffs lacking a personal interest in the outcome.’” Calderone, 2016 WL 5403589 at 3 (11th Cir. 2016)(quoting Hoffman-La Roche, Inc. v. Sperling, 493 U.S. 165, 173 (1989)). Politically, the Act was a shot across the bows of multiple unions prosecuting FLSA claims in bad faith.


The amended FLSA, however, stands in contrast procedurally with Federal Rules of Civil Procedure, Rule 23, which sets the general standard for class certification of all other matters in federal court. Rule 23 is viewed as the more difficult class certification bar, since plaintiffs must show numerosity, commonality, typicality, and adequacy of representation, as well as the predominance of common questions of law and fact and the superiority of the proposed class action for adjudication of the dispute. But Rule 23 also states that putative plaintiffs who do not wish to be bound by a class action judgment must “opt out” of the class. See 29 U.S.C. §216(b)(3). Thus, in the instance a putative class of employees wanted to bring causes of actions based on violations of the FLSA and any similar state law (assuming federal supplemental jurisdiction), two different procedural standards would apply, including the disparate obligations of opting in under the FLSA to reap the benefits of a class judgment or opting out under Rule 23 to avoid a class judgment in which a plaintiff does not want to participate. This created confusion for litigants and the district courts, including the Middle District of Florida, which had to determine whether class actions for wage violations under the FLSA and Florida’s Minimum Wage Act (“FMWA” – Fla. Stat. §448.110) could be maintained at the same time by the same group of plaintiffs.


Several employees of the Lee County Sheriff’s Office filed minimum wage and overtime claims against Sheriff Michael Scott in the U.S. District Court for the Middle District of Florida. The plaintiffs, relying on both the FLSA and FMWA, alleged that they had performed off-the-clock work for which they were not compensated and moved for class certification, but because of the disparate procedural standards that applied to the FLSA and FMWA claims, the district court granted conditional certification only for the FLSA claims. In doing so, the court cited to LaChapelle v. Owens-Illinois, Inc., 513 F.2d 286, 289 (5th Cir. 1975) and held that the two proposed class actions were “mutually exclusive and irreconcilable.” Calderone, 2016 WL 5403589 at 1.


The Eleventh Circuit disagreed on numerous fronts. Initially, the D.C., Second, Third, Seventh, and Ninth Circuits had already determined that two different class certification standards could co-exist in one lawsuit. Id. Further, while Section 216(b) permits class redress for violations of the FLSA, it also specifically precludes such class actions when the Secretary of Labor has filed a complaint against the same employer alleging similar causes of action and seeking similar redress for the employees. According to the Court of Appeals, this fact showed that “Congress knew how to categorically separate an FLSA collective action from other types of actions,” yet, “included nothing in the statute which would cause an FLSA collective action to preempt a Rule 23(b)(3) class action based on state law, or vice versa.” Id. at 3. Indeed, the FLSA has a savings clause at Section 218 that permits state enactment and enforcement of more stringent wage and maximum work week laws. Finally, Rule 23’s “opt out” provision was not enacted until 1966, and in that enactment, the responsible Congressional advisory committee noted that the FLSA’s section 216 was “not intended to be affected by Rule 23.” Id. at 4 (quoting Fed. R. Civ. P. 23, advisory committee’s note, reprinted in 39 F.R.D. 69, 104 (1966)).


All of these facts led the Court of Appeals to the conclusion that a putative class could seek separate certifications for actions based on the FLSA and similar state wage laws, as long as the applicable procedural requirements (i.e., Section 216 and FRCP Rule 23) for both were met. The Court further held that any confusion that may arise due to those different procedural standards, as well as the likely litigant confusion created by receiving a class notice requiring both an opt in and an opt out, could be addressed through case management. As such, the Court reversed the district court’s ruling on certification of the state claims and instructed the court to make the relevant Rule 23 analysis for certification of the state claims.