Class & Collective Actions

Class Action

A class action is a suit in which one person or a small group of people sue on behalf of many others who have similar circumstances.  The person who files the suit is called the named plaintiff.  The named plaintiff pursues his claim, just like in any other case. During the course of the suit, however, the named plaintiff asks the judge to “certify” a class. The class is the group of people whose circumstances are like those of the named plaintiff. If the judge grants certification, the named plaintiff continues the case for himself and the class members. If the judge denies certification, the named plaintiff proceeds with his individual case. It takes only one person to bring a class action suit, even thought there may be thousands of people in the class.

How does the client benefit from filing suit as a class action?

There are several benefits to filing a suit as a class action. First, litigation is expensive and many cases are too small to warrant the time and expense of litigation. A class action may therefore be the only way that a person with a small claim has access to the courts and a just resolution. Second, a successful class action allows the named plaintiff the opportunity to reduce his litigation costs by spreading them across the class. Third, a defendant may be more likely to take the suit seriously if it is plead as a class action because the defendant’s liability could be significantly greater if it is to the class as a whole. Fourth, the court often determines the amount of attorneys’ fees in a successful class action. These awards are frequently 25% to 33% of the class recovery, meaning that the actual attorneys’ fee due from the named plaintiff’s recovery may be less than the amount stated in the fee contract. Finally, courts sometimes make an award to the named plaintiff at the conclusion of a successful class action. Such an award is in the judge’s discretion and is made to compensate the named plaintiff for the effort expended to benefit the class members.

Collective Action

The Fair Labor Standards Act (FLSA) provides standards for minimum wage, overtime pay and child labor provisions. Employees may be eligible to participate in an overtime collective action lawsuit if they have been unlawfully denied overtime wages. The FLSA collective action procedure permits the aggregation of hundreds or thousands of claims requiring only that the employees be “similarly situated.”

Collective Action Different from Class Action

Collective actions share some characteristics with class actions, but are not the same. In FLSA cases, an employee must opt in, meaning that they must affirmatively sign a document stating that they wish to be a part of the lawsuit. In class actions, under Rule 23(b) of the Federal Rules of Civil Procedure, employees are presumed to be a part of the class and any employee who doesn’t want to participate in the lawsuit must opt out. Class actions cannot be used to assert wage and hour claims brought under the FLSA but employees may bring an “opt in” or “collective action” under FLSA Section 216(b). One or more employees may maintain an action, on behalf of themselves and other employees who are similarly situated, to recover damages on any of the grounds available for individual FLSA relief. Employees who do not file a written consent are not bound by the outcome of the collective action and may file a subsequent private action. The FLSA collective action may be brought in either state or federal court.