Sometimes more than one plaintiff has the same claim against an entity. When that happens are there generally three ways such a case can be brought. One way is obviously to simply join all of the plaintiffs to the lawsuit. If there simply are too many, then the plaintiff can try to certify a class action. However, if the case involves minimum wage, overtime, or equal pay, then there is a third way, which is known as a collective action. A few years ago, the Fifth Circuit changed how collective actions are certified by courts within the Fifth Circuit. That is what this blog is about.
Under the Fair Labor Standards Act there is a collective action procedure that allows an employee to bring an action against an employee on behalf of herself and any other “similarly situated” employees who elect in opt-in to the action. 29 U.S.C. § 216(b). This opt-in procedure is quite different from a standard class action, which generally rquires a potential class member to opt out of the lawsuit.
In Swales v. KLLM Transport Services, the Fifth Circuit announced a new standard for collective certification that rejected the two-part Lusardi method that courts had previously used. 985 F.3d 430, 439 (5th Cir. 2021). Under Swales, the new standard directs the district court to “identify, at the outset of the case, what facts and legal considerations will be material to determining whether a group of ‘employees’ is ‘similarly situated.’ And then it should authorize preliminary discovery accordingly.” Id. at 441. Once that discovery has concluded, the district court determines whether the proposed collective consists of similarly situated employees and whether merits questions can be answered collectively. Id. at 442.
If the district court decides the questions can be answered collectively, then it authorizes notice to be sent to the similarly situated employees. Id. Furthermore, the district court may elect to only give notice to certain “subcategories” of employees as opposed to all potential opt-ins, if the district court determines only those within the subcategory are determined to be “similarly situated” after reviewing discovery. Id. at 443.
In determining whether members of a potential collective are “similarly situated” for purposes of a collective action under the FLSA, of which the EPA is part, courts in the Eastern District look at three factors:
“(1) the disparate factual and employment settings of the proposed plaintiffs; (2) the various defenses available to the defendant which appear to be individual to each proposed plaintiff; and (3) fairness and procedural considerations.” Torres v. Chambers Protective Serv., Inc., No. 5:20-CV-212, 2021 WL 3419705, at *3 (N.D. Tex. Aug. 5, 2021). The term “similarly situated” does not mean that the proposed members are “identically situated.” Id. at *4. The court must instead ask whether the plaintiff has “demonstrated similarity among the individual situations.” Segovia v. Fuelco Energy LLC, No. SA-17-CV-1246-JKP, 2021 WL 2187956, at *8 (W.D. Tex. May 28, 2021). This can be done by showing a factual nexus that binds the plaintiff and the potential collective action members as alleged victims of a particular policy or practice. Id. Having some differences between the collective action members “will not preclude a collective action unless they are material to ultimate issues before the trial court.” Id. at *8.
Roberts v. Baptist Healthcare Sys., LLC, No. 1:20-CV-00092-MAC, 2022 WL 4089819, at *3 (E.D. Tex. Aug. 9, 2022), report and recommendation adopted, No. 1:20-CV-92, 2022 WL 4084420 (E.D. Tex. Sept. 4, 2022).
Collective actions are important because they incentivize attorneys to take low individual damage cases by allowing the attorneys to pursue multiple claims at once. My firm has represented employees in collective actions both in and outside of Texas. We have represented employees both in court and in arbitration. If you believe you are not being paid a minimum wage, not being paid overtime, or have an equal pay claim based on sex, then you should consider talking to an attorney about whether or not you have a case and whether that case can be pursued as a collective action.