For years, wage and hour lawsuits against businesses for alleged wage and hour violations have been painful and expensive ordeals for businesses due to the FLSA’s “collective action” feature.
The FLSA allows a current or former employee to sue his employer on behalf of himself and those “similarly situated” to him, which is called a collective action under the statute.
Until recently, this meant that one former employee could file a lawsuit against his employer, force the employer to provide a list of all of its current and former employees who were paid similarly, send letters to those workers about joining the suit, and easily balloon a one plaintiff case into a multi-hundred plaintiff case. Obviously, this raised the stakes in such cases manifold with minimal effort from the plaintiff at the outset of the case.
Earlier this year, the 5th Circuit Court of Appeals—the federal appellate court over Texas, Louisiana, and Mississippi—came down with a ruling in Swales v. KLLM Transport Services, LLC doing away with the prior collective action method and beginning to institute a much more limited, employer friendly collective action process that makes it far more difficult for the plaintiff to find and join other plaintiffs.
Action Point. While this change should certainly allow business owners to sleep better at night regarding FLSA lawsuits, they should not become complacent regarding how their workers are paid wages and overtime as well as who they classify as independent contractors and salaried exempt employees. The Department of Labor is still very active with investigations, and single plaintiff lawsuits can still be expensive.
Please keep us in mind for any assistance you or someone you know may need with employment law concerns.