Jeffrey Savarise and Timothy Weatherholt's article "Limits to the Class Action Device: The Kentucky Wages and Hours Act Does Not Permit a Class Action" was featured in the Kentucky Law Journal on March 2, 2015.
Class action claims for unpaid wages have become pervasive in both state and federal courts. Plaintiff employment attorneys and the ever burgeoning class action law firms are filing these cases throughout the country, including in Kentucky. A wage and hour class action can be extremely lucrative from a financial standpoint for plaintiffs' counsel. Many of these classes include hundreds, if not thousands, of class members. Assuming a one-third contingency fee, a plaintiff counsel who settles a typical wage and hour class action could easily earn a seven-figure fee.
The federal wage and hour law, the Fair Labor Standards Act ("FLSA"), provides for a class mechanism for wage claims – collective actions. However, individuals must "opt in" to the "class," as opposed to the more traditional "opt out" class actions. Under 29 U.S.C. § 216(b) of the FLSA, a member of the class who is not named in the complaint is not a party unless he or she affirmatively "opts in" by filing a written consent-to-join with the court. This has the obvious effect of limiting the recovery pool. Recent statistics show only around fifteen percent of litigants in federal collective actions actually "opt in" to the litigation. The incentive for a plaintiff counsel to proceed in a state law class action – as opposed to a collective action under the federal law that requires litigants to affirmatively "opt in" to the case – is extremely high.
In the article, Jeffrey and Timothy argue that Kentucky courts should adhere to the plain language and other extrinsic sources that support the position that class actions are not viable under the Kentucky Act. They also provide a brief history of KRS 337.385 of the Kentucky Act and a few of the relevant cases discussing how wage and hour claims may proceed.
To read the full article, please visit Kentucky Law Journal.
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