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Appeals Court Sets Limits on FLSA Collective Actions in New Jersey and Other States

Both federal and state employment laws in New Jersey protect employees’ rights to a minimum wage and overtime pay. While the federal Fair Labor Standards Act (FLSA) does not set the minimum wage as high as New Jersey law, it provides workers with useful enforcement tools. A worker can bring a “collective action” on behalf of other workers with similar federal wage and hour claims. An FLSA collective action is similar to a federal class action, with a few important differences. A recent decision by the Third Circuit Court of Appeals limits the use of FLSA collective actions when the plaintiffs come from more than one state. The ruling should not affect collective actions in which all members of the group are from New Jersey. If you have concerns about possible wage or overtime pay violations, make an appointment with a New Jersey employment lawyer today.

The most recent increase in the federal minimum wage occurred over twelve years ago. It reached its current level of $7.25 per hour on July 24, 2010. The rules for overtime compensation, which require payment at time-and-a-half for time worked over forty hours in a week, have remained the same for decades. These rules only apply to employees who are not exempt under the FLSA. They also do not apply to independent contractors. A wrongful claim that an employee is either exempt or an independent contractor is a violation of the FLSA known as employee misclassification.

The FLSA allows employees to file lawsuits against their employers for alleged wage and hour violations. Notably, § 16(b) of the FLSA allows employees to file suit on their own behalf and on behalf of “​​other employees similarly situated.” The requirements for a collective action under the FLSA are similar to those for a class action under Rule 23 of the Federal Rules of Civil Procedure. One important difference is that, while many class actions automatically include people who meet the description of class members and receive notice of the suit, the FLSA requires all plaintiffs to consent to participation in a collective action in writing. To put that another way, people may have to “opt out” of a class action and “opt in” to a collective action.

The recent Third Circuit decision involves an employee misclassification collective action filed in a Pennsylvania federal court. The initial plaintiff is a Pennsylvania resident. The defendant is a shipping company with a nationwide presence. Two individuals, one from New York and one from Maryland, sought to join the collective action. The court did not allow them to join on the grounds that they have no connection to Pennsylvania, so the court had no specific personal jurisdiction over the defendant with regard to their claims.

The appellate court affirmed the trial court’s decision. It found that the two individuals seeking to join the suit “cannot demonstrate [that] their claims arise out of or relate to [the defendant’s] contacts with Pennsylvania.” New Jersey is also part of the Third Circuit, meaning that FLSA collective actions filed in New Jersey courts might not be able to include workers from other states. The court noted that the Sixth and Eighth Circuits have issued similar rulings. A ruling from the First Circuit, however, reached the opposite conclusion. The Supreme Court may eventually have to resolve the issue.

Employment disputes involving alleged wage and hour violations require the assistance of skilled and knowledgeable advocates. The employment lawyers at the Resnick Law Group represent New Jersey and New York employees in claims for unlawful workplace practices. To schedule a confidential consultation to see how we can assist you, please contact us today online, at 973-781-1204, or at 646-867-7997.

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