FLSA Collective Action Trimmed Because Court Lacked Specific Jurisdiction
A Minnesota federal district court recently denied FLSA conditional certification over the claims of workers who were not assigned to a Minnesota project at issue or not Minnesota residents due to specific jurisdiction considerations. Vallone et al. v. The CJS Solutions Group, LLC, No. 19-1532 (D. Minn. Feb. 5, 2020).
The court based its decision on a 2017 U.S. Supreme Court decision that held that due process requires a court to have specific jurisdiction over a defendant in a mass action only if the action arises out of or relates to that defendant’s contacts with the forum.
The plaintiffs in Vallone assisted physicians, nurses, and others with transitioning to new computerized patient-management systems in hospitals and other health care facilities nationally. The defendant-company is headquartered and has its principal place of business in Florida. The named plaintiffs traveled to facilities in Minnesota and hospitals in Missouri and New York. The plaintiffs claimed the company did not lawfully pay them for time spent traveling from remote locations to worksites during the workday or for a cancelled day of training for the Minnesota project that required some workers to travel to Minnesota.
The plaintiffs sought conditional certification of “all hourly paid, non-exempt, W-2 employees … whose time was neither paid under the [FLSA]” (1) while engaging in travel wherein the travel was undertaken during the employee’s normal working hours; or (2) for the cancelled training day in Minnesota for workers who did not live in the area.
The defendant-company argued, under Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017), that the District of Minnesota Court lacked specific jurisdiction over the company as to any putative plaintiff who worked outside the state of Minnesota. Because the plaintiffs in an FLSA collective action must opt-in to be included in a lawsuit, similar to a mass action, the opt-in plaintiffs’ claims establish the underlying controversy against the defendant, the court in Vallone reasoned. The court held that only if the claims arise out of or relate to the defendant’s contacts with Minnesota can it constitutionally exercise jurisdiction over the defendant.
Many courts are applying Bristol-Myers in the FLSA collective action context. Defendants in such actions should consider whether a potential collective may be limited at the conditional certification stage or earlier. Moreover, they should evaluate whether narrowing the size of the collective is possible right away so that they may properly raise the defense in their responsive pleadings.