FLSA Class Actions: Recent Seventh Circuit Decision Points To Merger Of Certification Standards
A significant recent Seventh Circuit decision, written by noted Judge Richard Posner, affirmed decertification of an FLSA collective action, essentially on the ground that the collective action could not satisfy the predominance standard under Fed. R. Civ. P. 23(b)(3). You read that correctly. In Espenscheid v. DirectSAT USA LLC, No. 12-1943 (7th Cir. Feb. 4, 2013), Judge Posner opines that the only material distinction between FLSA collective actions and Rule 23 class actions is that the former requires opt-in participation by class members, whereas the latter provides for automatic class member participation, subject to the right to opt out of classes seeking money damages. In all other respects that collective actions and class actions serve the same purposes – efficient resolution of disputes of the claims of similarly-situated plaintiffs. Therefore, Judge Posner reasons, there is no reason why the standard for certification of FLSA collective actions seeking money damages should differ from the standard for certification of a class to seek money damages under Rule 23(b)(3). Judge Posner finds that common issues of fact and law do not predominate for the Espenscheid class because entitlement to overtime compensation or failure to be paid minimum wage could not be established through proof common to the class as a whole. Accordingly, Judge Posner rules that the district court appropriately decertified the collective action to pursue FLSA claims.
