Overtime class actions
Class action. Two words which strike dread into the heart of big business.
A class action is a lawsuit which is filed by a group of people to vindicate all their rights together, in one case. This is mostly useful for claims which are - by themselves - too small to justify a lawsuit, but which add up to a massive theft. Wage claims are prime examples. A large company stealing $1,000 a year from 1000 employees makes for a two or three million dollar lawsuit.
The companies have been fighting against this for decades, with significant progress recently. Just this year, the Mississippi Supreme Court rejected ALL class actions in state court, and the U.S. Supreme Court in the Epic Systems case held that arbitration waivers are lawful. Meanwhile, cases like Walmart v. Dukes create new challenges for certifying class action cases even when they are not outright unlawful.
But the story is far from over. Even in cases where the class action does not wind up very useful, there are still a number of closely related tools that help reach a fair resolution of these kinds of claims.
If stuck with an arbitration clause, you can just file 1000 identical demands for arbitration over that $1,000/year claim. The chances are pretty good that, if the employee's lawyer demonstrates that he can handle it, the company will get sick of the attorney fees - which they will still have to pay, regardless - and come to a global resolution.
Meanwhile, even in a case where there are significant differences between different people's claims, you can still use the notice procedure of the class action to identify the people interested in the lawsuit and resolve the joinder issue with Rule 19 instead of Rule 23.
For example, in a recent case, I had about 7 (out of 40 or so) people express an interest in the action. Rather than try (and probably fail) to certify a class, I simply amended the Complaint to add all of them as individually named Plaintiffs.
Granted, this will not work with 1,000s of people, but if a separate lawsuit is filed for each couple dozen - breaking them up by worksite, or by job title, for example - you will have a similar effect to filing the 1,000 arbitration demands. In fact, the employer itself may be the one turning this into something of a class action by filing motions to consolidate or for MDL litigation relief.
The upshot is that the corporations do not always realize just how useful class actions can be - for their own purposes as well. In particular, they lead to settlements that properly SETTLE the issue for once and all. Meanwhile, individual litigation only resolves the individual person's issue, leaving the company open to the uncertainty of numerous other potential lawsuits.
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