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Archive for April 8th, 2008

Unpaid overtime claims under the Fair Labor Standards Act (FLSA) present an interesting dilemma.  On the one hand, the FLSA does not permit claims of multiple workers to be aggregated under Rule 23.  The FLSA provides for a collective action procedure that allows one or more workers to sue in a representative capacity on behalf of co-workers.  However, unlike Rule 23(b)(3), which allows a single class representative to represent others in a claim for damages unless they opt out of the action after receiving notice, in an FLSA collective action vehicle only permits the named plaintiff to represent those coworkers who opt in to the action after notice.  But what happens in a case where a plaintiff brings both FLSA claims, that can only be brought as a collective opt in action and also state law claims, that could be the subject of a class action? 

That interplay is the subject of a recent decision by the United States District Court for the Eastern District of New York in Guzman v. VLM, Inc. d/b/a Reliable Bakery, No. 07-CV-1126 (E.D.N.Y. March 2, 2008) (unpublished disposition).  Following an earlier order certifying the FLSA collective action, only 4 of up to 250 workers eligible to opt in to the settlement had done so.  In his March 2, 2008, decision, Judge Gleason agreed to exercise supplemental jurisdiction over the plaintiffs’ state law claims for unpaid overtime and certified a class of workers under Rule 23 for the purpose of resolving those claims.  Rejecting the defendant’s argument that class treatment would not be superior to other methods of adjudication in light of the pending FLSA collective action, the court accepted the plaintiffs’ “valid concern” that other workers were reluctant to opt in for fear of retaliation.  “Seen in this light,” the court reasoned, “the opt-out nature of a class action is a valuable feature lacking in an FLSA collective action. . . .  The FLSA’s opt-in procedure is simply not an equivalent stand-in for a class action in this case.”  Slip Op. at 17.  Recognizing that 28 U.S.C. 1367 permitted the court to decline to exercise supplemental jurisdiction in a case where the state law claims predominate over federal claims, the court nonetheless rejected the defendant’s request to do so, stating that “The factual overlap between the federal claims and the state claims is virtually total; it would ill serve the interests of convenience or judicial economy to relitigate in state court the defendants’ pay practices. To the extent that employees may feel intimidated about volunteering to participate in an action as suggested by the plaintiffs, fairness counsels in favor of exercising supplemental jurisdiction to hear their claims.”  Id. at 19.

A full copy of the opinion is available at The NY Lawyer website:

http://www.nylawyer.com/adgifs/decisions/030708gleeson.pdf

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According to an article on the website Switched.com, a Canadian association of nudists is considering filing a class action lawsuit against online payment website PayPal arguing that it unfairly denied them access to its services based on a policy against “sexually oriented websites” using its services.  It is not clear from the article whether the lawsuit would be filed in a U.S. or Canadian court or even what the grounds for relief would be.  However, the nudists take the position that there is nothing inherently sexual or erotic about their practice.  From the looks of the photograph that accompanies the article, I’d say that’s a contention that can be proved beyond any reasonable doubt (shiver).  See the article here: http://www.switched.com/2008/04/07/naked-canadians-consider-class-action-lawsuit-against-paypal/

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