July 14, 2020

Volume X, Number 196

July 14, 2020

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July 13, 2020

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Party of One: Collective Action Against Outback Steakhouse Denied due to Lack of Personal Jurisdiction

The U.S. District Court for the District of Massachusetts denied conditional class action certification in a case involving a front of house (FOH) manager suing Outback Steakhouse for unpaid overtime under the Fair Labor Standards Act (FLSA). The court applied the Supreme Court of the United States’ reasoning in its 2017 decision in Bristol-Myers Squibb v. Superior Court of California, which involved a class action in California state court by a purported class of more than 600 plaintiffs, most of whom were not California residents. The Supreme Court held that California did not have personal jurisdiction over the nonresidents because their claims were not sufficiently connected to the state.

The Claims Against Outback Steakhouse

In Chavira v. OS Restaurant Services, Carlos Chavira and out-of-state opt-in plaintiffs, as a collective of FOH Outback Steakhouse managers who work in excess of 40 hours in a workweek, asserted an FLSA claim for unpaid overtime wages. The question before the court was whether the out-of-state plaintiffs could opt in to Chavira’s collective action.

The Court’s Analysis

Consistent with the Supreme Court’s decision in Bristol-Myers, Judge Burroughs of the U.S. District Court for the District of Massachusetts required the plaintiffs to show that Outback Steakhouse had “sufficient minimum contacts with Massachusetts to satisfy the constitutional guarantee of due process regarding the claims of non-Massachusetts opt-in plaintiffs.” The court found that there was no nexus between the wages out-of-state opt-in plaintiffs received and Outback Steakhouse’s activities in Massachusetts or at any Outback Steakhouse restaurant in Massachusetts. Absent a showing that the claims either arose directly out of, or were related to, Outback Steakhouse’s contacts in Massachusetts, the court could not assert specific jurisdiction.

Judge Burroughs noted the “serious concerns regarding the implications of [the] ruling on the future of FLSA collective actions,” and also acknowledged “the policy arguments raised by other courts.”  But Judge Burroughs recognized that the court has an “obligation to follow the law as set forth in controlling precedent,” such as Bristol-Myers.

The court also denied conditional class certification because Chavira failed to identify similarly situated FOH managers in Massachusetts. Chavira presented nothing more than his own affidavit unsupported by documentation relevant to any Massachusetts locations.

Key Takeaways

Chavira is the second decision in the District of Massachusetts to apply Bristol-Myers to an FLSA collective action. Accordingly, employers in Massachusetts, as well as those under the jurisdiction of other courts within the First Circuit, may want to consider personal jurisdiction as a defense against claims by out-of-state plaintiffs seeking to opt in to FLSA collective actions.  There is still some uncertainty, however, as the First Circuit Court of Appeals has yet to address the issue.

© 2020, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.National Law Review, Volume IX, Number 338

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About this Author

Lorenzo Cabantog, Ogletree Deakins Law Firm, Boston, Labor and Employment Attorney
Associate

Lorenzo Cabantog is an associate in the Boston office where he focuses on employment litigation, labor management relations, and counseling.  In his litigation practice, Lorenzo has represented clients in a wide array of employment disputes and provides defense against claims arising under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act (ADA), the Age Discrimination in Employment Act (ADEA), and a host of other federal and state labor and employment statutes.   In addition, Lorenzo has represented employers with labor issues arising under...

617-994-5713
Diane M. Saunders, Ogletree Deakins, Labor Litigation Issues Lawyer, non-profit organizations attorney
Shareholder

Diane Saunders is a Shareholder in the Boston office. Ms. Saunders is the Co-Chair of the firm’s Retail Practice Group, and a member of the firm’s Steering Committees for the Class Action Practice Group and Professional Development. Ms. Saunders has been helping employers with their labor and employment issues and business disputes for over 20 years. Her clients include businesses of all sizes and in a variety of industries, as well as non-profit organizations. Ms. Saunders is a skilled and aggressive litigator and possesses significant expertise in class and collective action matters and complex cases. Whether she is handling litigation or simply providing advice and counsel, Ms. Saunders employs a strategic approach to solving her clients’ legal and business problems. She always strives to achieve cost-effective results that are consistent with her clients’ overall business objectives.

617-994-5704