United States: Third Circuit Finds That Putative Class Representatives Could Not Challenge Decertification Of An FLSA Collective Action Once They Dismissed Their Own Claims

While the now familiar two-step process for determining certification of FLSA collective actions may have been introduced based on valid concerns, it is increasingly vexing for employers in cases where they have either done nothing wrong or in cases that even on inspection are unlikely to survive conditional certification.  The idea is that is a putative class representative makes a colorable showing that there is a class of similarly situated employees, conditional certification will assist the court and parties in finding them, making them part of the case if they choose, and then dealing with the certification and merits issues based upon a known class.  Unfortunately, that is not how it has worked.  Some courts, at the urging of plaintiffs' counsel, will conditionally certify classes based upon the slimmest of showings.  Once notice has gone out, the case takes on a life of its own and the employer must endure considerable cost and management issues irrespective of the merits of the plaintiffs' claims.  Even when decertification is granted, which is a reality for many of the cases that reach that stage, the parties must deal with disparate claims that were submitted only because of the prior conditional certification order, claims that may also prove expensive for both sides to manage.  While some employers have attempted to appeal decisions on conditional certification or even a denial of decertification, the FLSA has no equivalent to Federal Rule 23 (f) that would permit an interlocutory appeal.  Faced with expensive and protracted litigation and no realistic appeal rights, many employers simply settle.

Every once in a while, however, the shoe is on the other foot.  Plaintiffs, too, can find themselves without a realistic appeal if their FLSA claims are decertified, as a recent Third Circuit case indicates.  In Camesi v. University of Pittsburgh Medical Center, Case Nos. 12-1446 and 12-1903 (3d Cir. Sept. 4, 2013), the plaintiffs brought two suits against UPMC and literally dozens of its affiliates asserting that they failed to compensate employees who worked through their breaks or meal periods.  The district court conditionally certified classes, and ultimately nearly 4,000 employees opted into the litigation.  Incidentally, one can genuinely question why the case should ever have been conditionally certified at all when the claims covered a wide range of hospitals of different sizes, medical practices strewn across western Pennsylvania, midwives, a nursing school, a surgical supply company, and even a holding company, all of which were likely to have very different workplaces. The litigation continued, however, and, pursuant to the 2-step procedure, the defendant moved to decertify both cases.  Both motions were granted.

Displeased with the decision, and unable to appeal outright, the lead plaintiffs moved for voluntary dismissal of their claims to create a final appealable order that could be appealed.  Both orders were granted, but by adopting this strategy were the plaintiffs, to use the British phrase, "too clever by half"?  You bet.

The plaintiffs argued that the dismissal of their claims made the order to decertify the class final and appealable, but the Third Circuit found that they had missed a vital issue, which was that that same action deprived it of jurisdiction.  It first reviewed the settled law that an order decertifying a case is interlocutory and not ordinarily appealable.  It then turned to the plaintiffs' contention that despite the voluntary dismissal of their individual claims, they still maintained an interest in the litigation.  Simply stated, it disagreed and found that the dismissal "not only extinguished [their] individual claims, but also any residual representational interest that they may have once had."  Finding no representative plaintiff with a viable stake in the outcome of the case, it dismissed the appeal for want of jurisdiction.

The Camesi case underscores the perils both parties face in FLSA litigation, particularly when marginal cases are conditionally certified.  In most cases, employers bear the brunt of those consequences, but every once in a while, the plaintiffs may.

The Bottom Line:  FLSA plaintiffs whose conditionally certified classes are decertified cannot obtain an appeal by dismissing their own claims, but must await the trial and disposition of their cases before appealing.

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