Thursday, March 13, 2008, 10:09 AM

Bakers and Bakery Battle over FLSA "Opt-In" and Class Action "Opt-Out" Rules

An interesting opinion was handed down by the U.S. District Court for the Eastern District of New York last week. In the suit, a number of bakery workers claimed that the bakery that employed them failed to pay them all overtime and compensation they were due, in violation of the FLSA and the New York Labor Law.

The plaintiffs claimed to represent a class of up to 250 "mostly foreign-born workers who have little command of English, are probably unfamiliar with the American legal system, and may be suspicious, if not intimidated, by this proceeding." After winning conditional certification of their collective action under the FLSA, the plaintiffs then sought to be allowed to proceed with their state law claims, in the same case, as a traditional class action under Rule 23 of the Federal Rules of Civil Procedure.

The bakery opposed allowing the FLSA collective action and the state law class action to proceed in the same case. Among their arguments, the bakery pointed out that in FLSA collective actions, would-be class members are required to affirmatively "opt in" in order to participate in the case. This procedure is different than traditional Rule 23 class actions, which requires class members to affirmatively "opt out" of the class.

The bakery contended that the FLSA collective action was a superior vehicle to resolve the dispute than a class action proceeding, that it would be judicially inefficient to have the FLSA collective action and the state law class action in the same case, and that the differing opt-in and opt-out rules would be confusing.

The court rejected the bakery’s arguments, and allowed the FLSA collective action and the state law class action to both go forward. Of note, the court agreed with the plaintiffs’ argument that a class action, with its opt-out rule, was appropriate because the class of mostly foreign-born workers might be reluctant to affirmatively opt-in to the case for fear or reprisal and retaliation. For that reason, the Court noted "[t] FLSA’s opt-in procedure is simply not an equivalent stand-in for a call action in this case."

The case is Guzman v. VLM, Inc. d/b/a Reliable Bakery, Case No. 07-CV-1126, pending in the U.S. District Court for the Eastern District of New York.

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