Often, when a employee or former employee files a lawsuit in Texas for unpaid for unpaid overtime or minimum wages, they are in a position to seek collective action under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201. The fact pattern for collective action is that there are many workers for the same employer, in similar job positions, being paid in a similar manner as the worker that filed the FLSA lawsuit.
Background on the law
What is known in the common vernacular as a “class action” is usually pursued as a “collective action” when filed under the FLSA. The employee who files an overtime or minimum wage lawsuit is entitled to pursue the action “on behalf of himself . . . and other employees similarly situated” pursuant to 29 U.S.C. § 216(b).
Federal district courts commonly apply a two-step approach for determining whether such a FLSA lawsuit should be certified as a collective action under § 216(b). See Roussell v. Brinker Int’l, Inc., 441 F. App’x 222, 226 (5th Cir. 2011); Mooney v. Aramco Servs. Co., 54 F.3d 1207, 1213-16 (5th Cir. 1995), overruled on other grounds by Desert Palace, Inc. v. Costa, 539 U.S. 90, 123 S. Ct. 2148, 156 L. Ed. 2d 84 (2003).
The Lusardi approach, follows a two step inquiry. Id. at 1213. At the first step, the district court makes a decision – usually based only on the pleadings and any affidavits which have been submitted by the worker(s) that sued the company – whether notice of the action should be given to potential class members.
Because the court has minimal evidence, this determination is made using a fairly lenient standard, and typically results in “conditional certification” of a representative class. If the district court “conditionally certifies” the class, putative class members are given notice and the opportunity to “opt-in.” All the current and former worker for the employer that that was sued will receive notice of the lawsuit and given an opportunity to join the lawsuit by opting in. The courts usually limits the notice to employees that have worked for the company within two to three years.
The overtime or minimum wage lawsuit then proceeds as a representative action throughout discovery. Id. at 1213-14. As you can see, the “notice stage” determination is crucial to both the plaintiff(s), the employer, and the class members. At the notice stage, the plaintiff / worker need only produce “substantial allegations that the putative class members were together the victims of a single decision, policy, or plan . . . .” Id. at 1213 n.8 (quoting Sperling v. Hoffman-La Roche, Inc., 118 F.R.D. 392, 407 (D.N.J. 1988).
What is the necessary evidence to pass muster at the notice stage depends on the skills of the lawyers, the quality of the legal arguments and evidence presented to the court. Texas courts have had mixed results when it comes to the notice stage where the burden needed to satisfied step one of the class certification stage are based on similar fact patterns. The employers will typically argue that potential class members are not similarly situated because of many different reasons. There is definitely and art and science involved in litigating the collective action phase of the overtime and minimum wage lawsuits. Some courts have held that such argument is better reserved for a motion to decertify after notice and discovery, which is the second step of the Lusardi approach. Whether any one defendant qualifies as an employer to all class members for FLSA purposes is a fact-sensitive inquiry that would benefit from discovery. See Aguilar v. Complete Landsculpture, Inc., 04-0776, 2004 WL 2293842 at *3 (N.D. Tex. Oct. 7, 2004). After discovery has been completed, the second step of the Lusardi approach calls for a motion for decertification.
Texas employers that are faced with collective or class action FLSA lawsuit should expend every effort to investigate and resolve the claims early in the lawsuit before class certification takes place.