How To Decertify an FLSA Collective Action

The recent decision in Mathis et al. v. Darden Restaurants et al. provides a good illustration of how to decertify a collective action under the Fair Labor Standards Act (FLSA). 2014 WL 4428171 (S.D.N.Y. Sep. 1, 2014).

In Mathis, servers and bartenders at various restaurants operated by Darden (including Olive Garden, Red Lobster, Bahama Breeze, Longhorn Steakhouse, and Seasons 52) alleged that: (i) they were required to perform off-the-clock work without pay; and (ii) that the Defendants impermissibly imposed a “tip credit” for certain work hours. In July of 2013, the court conditionally certified the collective action. Out of a potential 218,000 class members, more than 20,000 plaintiffs opted-in to the litigation.

On September 1, 2014, the court granted the Defendants’ motion to decertify the collective action on the grounds that the 20,000+ plaintiffs were not similarly situated. In analyzing the motion, the court focused on the following three factors: (1) disparate factual and employment settings of the individual plaintiffs; (2) the various defenses available to defendants that appear to be individual to each plaintiff; and (3) fairness and procedural considerations. Here’s what the court had to say about the three factors:

Disparate Factual and Employment Settings of Individual Plaintiffs: The court held that the plaintiffs’ disparate factual and employment settings supported decertification. The putative class consisted of both servers and bartenders who worked at 1,995 restaurants across 50 states. The court found that “[t]he relevant policies and practices as to off-the-clock work and wages differ by job title, state, [restaurant brand], specific restaurant, and manager.”

Defenses Available That Are Individual To Each Plaintiff: The court held that individualized defenses supported decertification. The court explained that the Defendants had defenses including that specific class members: (i) did not work off-the-clock; (ii) received managerial instructions that were outside the scope of authority and directly contrary to well-established policy and practice; (iii) voluntarily engaged in off-the-clock work in defiance of Defendants’ official policies; and/or (iv) unreasonably failed to avail themselves of curative steps provided by the employer to recover unpaid compensation. Each of these defenses required individualized consideration with respect to the plaintiff class members.

Fairness and Procedural Considerations: The court held that fairness and procedural considerations also supported decertification, concluding that “collective adjudication would not be fair or manageable.” The court explained that “[t]he circumstances at the thousands of different restaurants and the experiences of the tens of thousands of Opt–In Plaintiffs are too dissimilar to justify a collective action” and presented substantial manageability concerns.

Because all three factors supported decertification, the Mathis court granted the defendants’ motion and decertified the collective action. As a result, the 20,000+ opt-in plaintiffs cannot proceed as a collective action under the FLSA.

Takeaway: When an FLSA collective action gets too big or tries to focus on too many different circumstances, an employer may have a strong argument that decertification is appropriate.

About Michael Miller

Michael is a Chambers-rated attorney in Briggs and Morgan's Employment, Benefits, and Labor group and is head of the firm’s Employment Law Counseling and Compliance practice group. He has 25 years experience counseling employers to prevent unwanted litigation and advises companies of ongoing changes in federal, state and local employment law. Michael advises employers in all areas of employment law including discipline and discharge, leaves of absence, wage and hour compliance, non-compete and confidentiality agreements, affirmative action plans, background checking, and drug/alcohol testing. For Michael's full bio, click here.

Posted on September 30, 2014, in Wage and Hour and tagged . Bookmark the permalink. Leave a comment.

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