Many times, plaintiff lawyers will try to file FLSA class actions as nationwide lawsuits so the size of the class and potential recovery can be magnified geometrically. Well, that just got a little harder to do as a federal judge rejected an attempt by a group of Outback Steakhouse front-of-house managers to continue as a countrywide class in a Fair Labor Standards Act overtime case. The Judge did acknowledge that she harbored “serious concerns” about what her ruling portends for other such collective actions. The case is entitled Chavira v. OS Restaurant Services LLC and was filed in federal court in the District of Massachusetts.
The Judge denied the motion for conditional certification in the lawsuit which charged the employer has misclassified the Managers as exempt. The Judge also granted the motion to strike the opt-in notices signed by plaintiffs who worked outside of Massachusetts. In so doing, the Judge relied on the US Supreme Court’s decision in Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County.
The Judge observed that she had “serious concerns regarding the implications of the ruling on the future of FLSA collective actions.” She did, however, need to follow the precedent established by the highest Court in the country. That holding, the Bristol-Myers Squibb case, held that in a class action, a California court did not have jurisdiction over plaintiffs who lived elsewhere because there was an insufficient connection between those plaintiffs and the State of California. Herein, as the named plaintiff could not demonstrate that there was a connection between the activities of the steakhouse in Massachusetts and those locations elsewhere, the Court had no jurisdiction over them.
The Judge also concluded that was an insufficient basis for a class action because the named Plaintiff had not shown he was similar to others. His affidavit was very localized in geographical scope. Therefore, the Court ruled that he had not sustained the burden of showing similarity and it could not be done “on plaintiff’s representations alone.” As the Court aptly put it, “to allow a putative collective action to proceed to the notice stage on the basis of one named plaintiff’s affidavit, without supporting documentation relevant to Massachusetts locations, pushes an already ‘low’ burden significantly lower.”
This is a very interesting legal turn, down the path, for a change, of the employer. Hopefully, it will be a trend. I wonder if it will make the plaintiff’s bar more reasonable in their often inflated settlement demands.