Class Action Lawsuits

What is a class action lawsuit? A class action is a form of lawsuit in which many individuals can band together and assert their rights collectively against one or more defendants. Class actions are commonly used in the employment context when employers engage in unlawful conduct that impacts a large group of employees.

Depending on the circumstances in a given case, a class action may consist of anywhere from several dozen to several thousand employees, and may cover a single work location or many work locations across the country.

Why do employment class actions exist? There are distinct benefits to pursuing employment rights by way of a class action instead of an individual lawsuit. By banding together, employees with relatively insignificant individual cases can aggregate their claims, thereby holding the employer accountable for its unlawful conduct. As the U.S. Supreme Court has recognized, class actions permit the vindication of “the rights of groups of people who individually would be without effective strength to bring their opponents into court at all.” Further, class and collective actions are a fair and efficient way of adjudicating the right of employees who are affected in similar ways by a common policy or practice of their employer.

What are the requirements to file a class action lawsuit? In federal court, class actions are governed by Rule 23 of the Federal Rules of Civil Procedure. In New York, class actions are governed by Article 9 of the CPLR. Under both rules, one or more individual employees may sue on behalf of all members of a class only if:

  • There are so many class members that it would be impractical to require multiple individual suits (known as “numerosity”).
  • The legal and factual issues are common to the class (known as “commonality”).
  • The individuals representing the class have claims and defenses that are typical of the class (known as “typicality”).
  • The individuals representing the class will fairly and adequately protect the interests of the class (known as “adequacy of representation”).

What’s a collective action lawsuit? Employees may also bring up what is known as a “collective action” for unpaid overtime and other wages under the Fair Labor Standards Act (FLSA) and/or age discrimination under the Age Discrimination in Employment Act (ADEA). Under the FLSA, 29 U.S.C. § 216(b), an employee may bring suit against his employer on behalf of himself and other employees similarly situated, however, the other employees must opt in to the lawsuit by filing written consent with the court. A similar “opt in” procedure exists in age discrimination cases brought under the ADEA.

What role do class actions play in the employment context? Here are some hypothetical examples of class and collective actions in the employment context:

  • An hourly worker is paid for 40 hours per week, but actually puts in about 42 hours of work each week. Other employees at his workplace also work “off the clock” and are not paid for it. It is not worth the hourly worker’s time or money to pursue a claim for unpaid overtime and he likely will not find an attorney to handle his case on a contingency fee basis. However, if he brings suit on behalf of himself and all other employers who are similarly situated, thereby aggregating all unpaid overtime wages, he can effective pursue his rights as well as the rights of his coworkers.
  • An employer has a practice of treating women less favorably when it comes to pay, promotions, and other terms and conditions of employment. Despite laws against retaliation, the current female employees do not want to file a lawsuit out of concern for their jobs. However, several female employees who were recently laid off file a class action lawsuit that seeks relief for themselves as well as for the current employees.
  • A large group of salaried white-collar employees work very long hours. Despite the employees’ important-sounding job title, they do not have discretion regarding significant employment matters. Several of the employees file a collective action under the FLSA challenging their employer’s decision to classify them as exempt from the overtime laws. Many of the other affected employees “opt in” to the lawsuit and together they recover a large sum of money for unpaid overtime wages.

In sum, class actions and collective actions are effective procedural tools to remedy an employer’s wrongs to a large group of employees.

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