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July 24, 2014

Seventh Circuit Addresses Fair Labor Standards Act (FLSA) Class Certification Standards

The US Court of Appeals for the Seventh Circuit has held that the same standards governing Rule 23 class certification claims apply to wage-and-hour “collective action” claims brought under the Fair Labor Standards Act (FLSA).

Plaintiffs brought claims seeking to represent both a Rule 23 class and an FLSA class against a defendant satellite company, claiming the defendant had failed to properly compensate its technicians. The District Court decertified the classes, finding that there were too many individual questions of fact related to the damages each employee suffered.

The Seventh Circuit affirmed the decertification. Of particular importance, the Seventh Circuit held that the standards governing Rule 23 certification should be applied to wage-and-hour claims under the FLSA. Traditionally, according to the court, the only difference between the classes has been that a Rule 23 class is “opt-out,” while a FLSA class is “opt-in.” The court held that this was not “a good reason to have different standards for the certification of the two different types of action,” and therefore treated both as a single class. The Seventh Circuit’s ruling may pose additional obstacles for plaintiffs bringing wage-and-hour class actions if they must meet each of Rule 23’s requirements for certification. Espenscheid v. DirectSat USA, LLC, No. 12-1943 (7th Cir. Feb. 4, 2013).

©2014 Katten Muchin Rosenman LLP

About the Author

Bruce M. Sabados, Financial Institutions Attorney, Katten Muchin Law Firm
Partner

Bruce M. Sabados concentrates his practice in complex commercial litigation, with an emphasis on securities- and financial services-related matters and secured lender litigation. He represents both plaintiffs and defendants in a variety of commercial matters in federal and state courts and in arbitration. His clients include securities firms, international banks, hedge funds, high net worth individuals and asset-backed lenders. Bruce handles matters involving fraud, restrictive covenants, breaches of contract, business torts and Racketeer Influenced and Corrupt Organizations Act (RICO). He...

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About the Author

Dean N. Razavi, Litigation Attorney, Katten Muchin law firm
Associate

Dean Razavi concentrates his practice in litigation and dispute resolution matters.

212-940-6743

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