The Federal Labor Standards Act (FLSA) provides for a private right to some employees against their employer for failure to pay overtime. Determining whether an employee has a cause of action, and whether an employer has a valid defense, can be a fact-intensive inquiry. If you worked overtime and believe you were entitled to overtime pay which you did not receive, contact REAMS LAW to discuss your rights: (405) 285-6878

It can be daunting for both employees and employers to know what to expect from an FLSA action. When an employer fails to pay overtime involving multiple employees, often a collective action may be filed, which is not a typical “class action” lawsuit. FLSA Collective Actions are referred to as “hybrid actions” because the rules and procedures are different. In a hybrid action, a group of employees may share common circumstances and claims, and bring a single lawsuit together under the same federal and state law claims.

Employees Still Have Their Own Lawsuit if They Do Not Opt-In, But the Time Limit to File is Still Ticking, Or the Time Limit Can Continuously Be Reset

When such an FLSA action is filed, an employee who had not previously sought legal counsel, or may even have been unaware of a forthcoming lawsuit, may receive a notice to the potential collective action members. If an employee wishes to “opt-in”, they must sign and file an opt-in consent form to join in the lawsuit, and in doing so, they become members of the lawsuit.

However, an employee who does not opt-in does not waive their right to file a separate lawsuit. 29 USC 216(b). So one should keep in mind that the applicable statute of limitations continues to run for each particular employee until they file a written consent. 29 USC 256; 29 CFR 790.21(b)2)(ii). In general, the limitations period to file a lawsuit on an overtime claim is two (2) years, and may be extended to three (3) years if violation is willful. 29 USC 255(a). Meanwhile, the time period from which to file an over time claim begins to run on each regular payday immediately following the work period when services were rendered and back pay is claimed. 29 C.F.R. 790.21. Thus, an one can see, limitations could potentially run on part, but not all, of an employee’s overtime claim. Meanwhile, employees who do not opt-in to a hybrid collective action are not considered part of that action, and would not be bound by any court judgment. 29 USC 216(b).

As a practical matter, these differing hybrid rules can have significant consequences for the employer and the employee. For example, for the employer, it is possible to get sued by different groups of employees, in different lawsuits (some collective and some not), for conduct involving different time periods. Thus, for settlement purposes, it is very important to identify all of the potential claimants, and include them in any settlement agreement, otherwise, an employer could enter a settlement only to be sued again by other co-workers. 

Offers to confess judgment would also be inadvisable, since an employer could wind up with a judgment against them, only to in turn have subsequent employees attempt to use that judgment against the employer to establish liability. FLSA claims are generally attorney fee cases, and thus, an employer may wish to seek settlement. The FLSA does not expressly require court approval of settlements, however, there are cases holding that unsupervised settlements of FLSA claims are invalid.

Although FLSA collective actions are a-typical for groups of employees who are “similarly situated,” an employer may still seek to transfer all related collective actions to a single judge and ask for those actions to be consolidated into one case for trial. See 28 USC 1404; FRCP 42(a). 

For employees, the hybrid rules of an FLSA collective action may lead them to believe that because they did not join a collective action, they no longer have any claims. While they may have incorrect assumptions, the statute of limitations on their claims lapse. Again, it is very important to seek legal assistance when one believes they may have a claim for unpaid overtime.

Two-Stage Certification

When multiple employees bring a lawsuit, the claimants often seek to conditionally certify the FLSA action, asserting that they are “similarly situated,” so that they can proceed collectively. 29 USC 216(b). The court then makes a preliminary determination regarding whether the similarly situated status is met, which has generally not been applied by courts strictly. The lesser standard at this first stage is applied, in part, to give speedy notice of potential claimants who may which to opt-in before a statute of limitations runs. 

After conditional certification, the court will likely enter a scheduling order, and the parties will have the opportunity to engage in discovery. From the employees’ perspective, they may be reviewing written discovery and preparing for their depositions. After the close of discovery, depending on the court’s scheduling order, an employer may seek to decertify, or move for summary judgment, and it is during this phase when court may be more strict that the first. There are a number of different reasons that conditional certification may be revoked, such as lapses of statutes of limitations or perhaps the presence of too many unique issues to separate between individual claimants. However, decertification may not necessary result in dismissal of the lawsuit; rather, claimants may be allowed to pursue their claims separately or individually dismiss with leave to refile. 

Contact REAMS LAW to discuss your rights and options: (405) 285-6878