National Conference on Equal Employment Opportunity Law American Bar Association FLSA Decertification: Be Careful What You Ask For.... March 26, 2010 San Antonio, Texas Presented by J. Derek Braziel 1 Lee & Braziel, LLP 1801 N. Lamar St., Suite 325 Dallas, Texas 75202 Tel: (214) 749-1400 Fax: (214) 749-1010 jdbraziel@l-b-law.com www.overtimelawyer.com This paper focuses on decertification in FLSA collective action litigation, including the standards for decertification (or denial of certification in some instances) and the impact of a decertification decision. It is written largely (and proudly) from the perspective of a plaintiff s attorney. I. Brief Overview of the Two-Stage Certification Process for FLSA Collective Actions The FLSA authorizes an employee to bring suit against an employer on his/her own behalf and on behalf of other similarly situated employees. 29 U.S.C. 216(b). The purpose of allowing this type of action is to serve the interest of judicial economy and to aid in the vindication of plaintiffs' rights. Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 170, 110 S. Ct. 482, 107 L.Ed.2d 480 (1989). In order to bring a representative action, however, the plaintiffs must be similarly situated to one another. Id. The similarly situated analysis generally follows a two step process like the one set forth in Lusardi v. Xerox Corp. 118 F.R.D. 351 (D.N.J.1987), mandamus granted in part, appeal dismissed, Lusardi v. Lechner, 855 F.2d 1062 (3rd Cir.1988), vacated in part, modified in part, and remanded, Lusardi v. Xerox Corp., 122 F.R.D. 463 (D.N.J.1988), aff'd in part, appeal dismissed, Lusardi v. Xerox Corp., 975 F.2d 964 (3rd Cir.1992). In this process, the court considers if potential opt-in plaintiffs are similarly situated at two different stages in the litigation. Mooney v. Aramco Services Co., 54 F.3d 1207, 1213 (5th Cir. 1995). At the first stage, the court determines if notice should 1 Many of the cases and some of the analysis in this paper are included in and based on, to varying degrees, the ABA Mid-Winter Reports for the FLSL Section of the ABA s L&E Section and on the Supplement to the Fair Labor Standards Act treatise (Ed. Kearns) of which the author is an Associate Editor-in-Chief.
be sent to potential class member plaintiffs. Id. At this stage, the court usually has a minimal amount of evidence before it and uses a fairly lenient standard. Id. at 1214. This typically results in a conditional certification of a class, potential members of which are then given notice and may opt-in to the lawsuit. Id. Following the conclusion of the discovery process, the court often enters the second phase of the analysis which is generally initiated by a defendant filing a motion for decertification. Id. At that point, the court has additional information before it to make a more detailed analysis as to whether the individuals are similarly situated. Id. If they are, the representative action may proceed to trial. Id. If a court determines that collective treatment is inappropriate and the case is decertified, the opt-in plaintiffs claims are dismissed without prejudice, and the named plaintiffs proceed to trial on their individual claims. Id.; Smith v. Lowe s Home Ctr., Inc., 236 F.R.D. 354, 357 (S.D. Ohio 2006); Nerland v. Caribou Coffee Co., 564 F. Supp. 2d 1010, 1017 (D. Minn. 2007); Proctor v. Allsups Convenience Stores, Inc., 250 F.R.D. 278, 280 (N.D. Tex. 2008). Importantly, many courts that grant decertification motions have tolled the statute of limitations for a limited period of time after their decertification order in order to give putative class members additional time to file their own lawsuits. England v. New Century Fin. Corp., 370 F. Supp. 2d 504, 511-12 (M.D. La. 2005) (30 days to re-file); Proctor v. Allsups Convenience Stores, Inc., 250 F.R.D. 278, 284 (N.D. Tex. 2008) (same); Johnson v. TGF Precision Haircutters, Inc., 2005 WL 1994286 (S.D. Tex. Aug. 17, 2005) (same). II. Decertification of Collective Actions A. Overview The second step in the two-step process for FLSA collective actions is the decertification step. Generally, a motion for decertification comes after the close of discovery or after discovery is substantially complete. 2 Mooney v. Aramco Servs. Co., 54 F.3d 1207, 1214 (5th Cir. 1995); Thiessen v. General Electric Capital Corp., 267 F.3d 1095, 1103 (10th Cir. 2001). At this stage, the court will have more than minimal evidence in front of it to be able to assess if the individuals are similarly situated such that the case can proceed to trial as a collective action. The ultimate question at both stages is whether collective action members are similarly situated. Morgan v. Family Dollar Stores, Inc, 551 F.3d 1233, 1258-64 (11th Cir. 2008). Although plaintiffs continue to bear the burden of establishing they are similarly situated, they do not have to prove they are identically situated. Grayson v. K Mart Corp., 79 F.3d 1086, 1097 (11th Cir. 1996); Falcon v. Starbucks, 580 F. Supp. 2d 528, 534 (S.D. Tex. 2008) In conducting the second-stage analysis, courts generally consider three factors: (1) the disparity or similarity of the factual and employment settings of the individual 2 Some courts have also reconsidered motions for decertification upon the close of trial. Johnson v. Big Lots Stores, Inc., 561 F. Supp. 2d 567, 570-72, 578-79 (E.D. La. 2008) (granting decertification motion after a seven-day bench trial).
plaintiffs, (2) the various defenses available to the defendant and whether those may be asserted collectively or individually as to each plaintiff, and (3) fairness and procedural considerations. Thiessen v. General Electric Capital Corp., 267 F.2d 1095, 1103 (10th Cir. 2001); Anderson v. Cagle s, Inc., 488 F.3d 945, 953 (11th Cir. 2007); Morgan v. Family Dollar, 551 F.3d 1233 (11th Cir. 2008); Moss v. Crawford & Co., 201 F.R.D. 398, 409 (W.D. Pa. 2000); Proctor v. Allsups Convenience Stores, Inc., 250 F.R.D. 278, 280 (N.D. Tex. 2008). The factors are not mutually exclusive, and there is considerable overlap among them. Johnson v. Big Lots Stores, Inc., 561 F. Supp. 2d 567, 574 (E.D. La. 2008); see also Chabrier v. Wilmington Fin. Inc., 2008 WL 938872, *3 (E.D Pa. Apr. 4, 2008) ( many factors serve as a basis for final certification, not any single factor in isolation). As one court recently noted, the more dissimilar plaintiffs are and the more individuated [the employer s] defenses are, the greater doubts there are about the fairness of a ruling on the merits for either side that is reached on the basis of purportedly representative evidence. Johnson v. Big Lots Stores, Inc., 561 F. Supp. 2d 567, 574 (E.D. La. 2008). However, where plaintiffs claims may be supported by generalized proof, courts are more likely to deny a decertification motion. Ayers v. SGS Control Serv., Inc., 2007 WL 646326, *5 (S.D.N.Y. Feb. 27, 2007); see also Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233, 1263-64 (11th Cir. 2008) (affirming district court s denial of decertification in part because litigating the claims on a collective basis would not be unfair because of the similarity between the plaintiffs job duties). B. Disparate Factual and Employment Settings of the Plaintiffs Courts analyzing the first factor have examined the extent to which differences in factual claims and employment settings have an impact on the claims being made. Courts have affirmatively reviewed whether the myriad differences highlighted by counsel are meaningful differences (distinctions with a difference). For example, differences in individual management styles does not necessarily mean a difference in responsibilities. See, Pendlebury v. Starbucks, 518 F. Supp. 2d 1345, 1355-56 (S.D. Fla. 2008). Initially, plaintiffs must establish identifiable facts or some nexus that binds their claims together other than the fact that they all worked for a company that failed to pay them overtime in some unspecified or varied way. For example, in Marsh v. Butler Sch. Sys., the court found collective treatment inappropriate (even on initial certification) because the conclusion that employees are similarly situated whenever they claim violations of law by the same employer is to conclude that any time an employer had two or more employees who allegedly were not being paid the overtime they claimed they were due, the employees would be similarly situated and be allowed to proceed with a collective action. 242 F. Supp. 2d 1086, 1094 (M.D. Ala. 2003) Courts have also noted unrelated sporadic violations would not suffice to establish claims should be treated collectively. See Hill v. Muscogee County Sch. Dist., 2005 WL 3526669, *3-4 (M.D. Ga. Dec. 20, 2005).
Under this initial factor, courts look at a variety of categories where meaningful difference might exist, including, but not limited to plaintiffs job duties, geographic locations, employer supervision, and compensation. Reyes v. Texas EZPawn, L.P., 2007 WL 101808, *2 (S.D. Tex. Jan. 8, 2007); Rawls v. Augustine Home Health Care, Inc., 244 F.R.D. 298, 300 (D. Md. 2007); Moss v. Crawford & Co., 201 F.R.D. 398, 409 (W.D. Pa. 2000). These factors are not considered in isolation and a single similarity or divergence is generally not sufficient to tip the balance for or against either continued collective treatment or decertification. For example, while courts consider the geographic scope of the class, the mere fact plaintiffs worked at different facilities does not warrant decertification if their job duties and other aspects of employment are sufficiently similar to warrant collective treatment. See Hipp v. Liberty Nat l Life Ins. Co., 252 F.3d 1208, 1219 (11th Cir. 2001) (the fact plaintiffs worked at different locations is not sufficient to warrant reversal of district court s denial of decertification); Epps v. Oak St. Mortgage LLC, 2006 WL 1460273, *6 (M.D. Fla. May 22, 2006) (decertification denied where plaintiffs worked in three different branch offices in two states because plaintiffs shared the same job title, job description, job functions, production requirements, evaluation process, compensation plan, and had offered no evidence their discretion varied by employee or office). On the other hand, similar compensation structures and job titles alone are generally not sufficient to justify collective treatment. For example, in Anderson v. Cagle's, Inc., the Eleventh Circuit explained that similarities necessary to maintain a collective action under 216(b) must extend beyond the mere facts of job duties and pay provisions. 488 F.3d 945, 953 (11th Cir. 2007) (internal citation omitted). Variations in payment and compensation structures can support decertification. Johnson v. TGF Precision Haircutters, Inc., 2005 WL 1994286, *5 (S.D. Tex. Aug. 17, 2005). Courts looking at the disparate factual and employment settings in misclassification cases have reached differing conclusions, often when looking at the same kind of position for two different employers, regarding how closely to analyze the individual job duties of each plaintiff to resolve the merits of such a case. Some courts have focused on the fact that the day-to-day job duties differ between plaintiffs to such an extent that decertification (or denial of certification) is appropriate. See Johnson v. Big Lots Stores, Inc., 561 F. Supp. 2d 567, 586 (E.D. La. 2008) (granting motion for decertification in part because requiring the employer to pick the class apart, plaintiff by plaintiff, going into the day-to-day job duties of each of the plaintiffs to prove that these ASMs are properly classified as exempt is tantamount to conducting multiple individual trials on the merits and is the antithesis of a collective action. ); Reich v. Homier Distrib. Co., Inc., 362 F. Supp. 2d 1009, 1015 (N.D. Ind. 2005) (denying certification at conditional stage where application of the loader exemption will require individualized discovery regarding each plaintiff s specific duties); However, other courts have held collective treatment is appropriate where the record reflects the plaintiffs had similar factual and employment settings such that their claims could be resolved through generalized proof, or representative evidence. Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233, 1263 (11th Cir. 2008) (upholding collective
treatment and noting [j]ust because the inquiry is fact-intensive does not preclude a collective action where plaintiffs share common job traits); Moss v. Crawford & Co., 201 F.R.D. 398, 410 (W.D. Pa. 2000) (denying decertification motion in an exemption case); Nerland v. Caribou Coffee Co., 564 F. Supp. 2d 1010, 1018 (D. Minn. 2007); Bradford v. Bed Bath & Beyond, Inc., 184 F. Supp.2d 1342, 1351 (N.D. Ga. 2002) (exemption defense does not present any difficulties related to the collective action because the court has already determined plaintiffs job duties were substantially similar). Some courts have refused to apply an individualized approach to evaluating exemption decisions where the employer failed to consider such individual factors when making its own classification decision. Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233, 1263-64 (11th Cir. 2008); Pendlebury v. Starbucks, 518 F. Supp. 2d 1345, 1352-53 (S.D. Fla. 2008); Nerland v. Caribou Coffee Co., 564 F. Supp. 2d 1010, 1022-24 (D. Minn. 2007) (finding it is disingenuous for the company to collectively decide all store managers are exempt and then challenge the plaintiffs collective lawsuit). C. Individualized Defenses The second factor in the decertification analysis is whether the asserted defenses are generalized to the entire class or whether they vary with respect to each individual opt-in plaintiff. Rawls v. Augustine Home Health Care, Inc., 244 F.R.D. 298, 300 (D. Md. 2007). Whether a defense is a general one or an individualized one may turn on the varying factual and employment settings of the plaintiffs, and courts often consider these factors in tandem. See, e.g., Johnson v. Big Lots Stores, Inc., 561 F. Supp. 2d 567, 574 (E.D. La. 2008) (explaining [t]he extent to which opt-in plaintiffs work experiences differ directly influences Big Lots capacity to prove its statutory exemption defense ). Some courts have held that individualized defenses can sometimes provide their own basis for decertification, particularly where they prevent an efficient proceeding with a representative class. Reyes v. Texas EZPawn, L.P., 2007 WL 101808, *5 (S.D. Tex. Jan. 8, 2007). Nevertheless, other courts have held that the existence of individualized defenses is not sufficient to warrant decertification if there are sufficient common issues or job traits that permit collective litigation of the claims. Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233, 1263 (11th Cir. 2008); see also Thiessen v. Gen. Elec. Cap. Corp., 267 F.3d 1095, 1104-1108 (10th Cir. 2001) (rejecting the argument that individualized defenses required decertification). Generalized defenses which can be litigated against an entire class with ease do not warrant decertification. For example, courts generally hold that statute of limitation defenses do not warrant decertification. Smith v. Micron Elec., Inc., 2005 WL 5336571, *3 n.6 (D. Idaho Feb. 4, 2005) (holding defenses pertaining to statutes of limitation, equitable tolling, judicial estoppel, and lack of standing due to bankruptcy findings would not require individualized proof at trial). Courts also have found that damage calculations do not warrant decertification and/or can be resolved through bifurcating the liability and damage phases of trial. Nerland v. Caribou Coffee Co., 564 F. Supp. 2d 1010, 1025 (D. Minn. 2007); Bradford v. Bed Bath & Beyond, Inc., 184 F. Supp.2d 1342, 1351 (N.D. Ga. 2002). Similarly, arguments pertaining to whether an employer acted in
good faith and other company-level practices are not sufficiently individualized to warrant decertification. Frank v. Gold N Plump Poultry, Inc., 2007 WL 2780504, *4 (D. Minn. Sept. 24, 2007); see also Wilks v. The Pep Boys, 2006 WL 2821700, *7 (M.D. Tenn. Sept. 26, 2006) (denying decertification motion where the defenses, including evidence of lawful employment policies and practices, can be raised collectively). On the other hand, courts have granted decertification where defenses require the court to conduct detailed individualized inquiries into the claims of each plaintiff. See Reyes v. Texas EZPawn, L.P., 2007 WL 101808, *5 (S.D. Tex. Jan. 8, 2007); ); King v. West Corp., 2006 WL 118577, *15 (D. Neb. Jan. 13, 2006) (decertifying a class in part because defendant intended to offer individualized defenses regarding whether uncompensated work occurred, whether time spent performing such work was de minimis, and whether the plaintiffs had scheduling flexibility and noting [d]isparate individual defenses heighten the individuality of the claims, and requiring the defendant to raise these arguments in a class action suit undermines its ability to mount a clear and coherent defense to the case and significantly complicates trial management. ). D. Fairness and Procedural Considerations Under the third factor of the second-stage analysis, a court considers whether adjudicating the class collectively is fair to both parties and procedurally feasible. Because the objectives of an FLSA collective action are to (1) lower the burden to individual plaintiffs through the pooling of resources and (2) enhance judicial efficiency by resolving common issues of law and fact arising from the same alleged unlawful activity in one proceeding, some courts find that close calls regarding collective treatment should be resolved in favor of certification. See Hoffman-LaRoche, Inc. v. Sperling, 493 U.S. 165, 170 (1989) (for FLSA goals); see Falcon v. Starbucks, 580 F. Supp. 2d 528, 541 (S.D. Tex. 2008); Chabrier v. Wilmington Fin. Inc., 2008 WL 938872, *3 (E.D Pa. Apr. 4, 2008) (explaining class treatment is efficient and preferable to individual litigation when plaintiffs are similarly situated). Many courts considering this factor focus primarily upon the benefits of collective treatment to employees. As a Minnesota federal district court has explained, [f]or many plaintiffs, a collective action is the only practical method of adjudicating their FLSA claims. Nerland v. Caribou Coffee Co., 564 F. Supp. 2d 1010, 1025 (D. Minn. 2007). So long as plaintiffs are sufficiently similarly situated, courts have denied decertification motions because the individual plaintiffs are less able to bear the costs of separate trials because they have fewer resources than the employer. Id. Nevertheless, courts have granted decertification motions where the employees are not similarly situated, because of the serious concerns about due process of forcing an employer to rely upon representative proof to defend its position in this context. Johnson v. Big Lots Stores, Inc., 561 F. Supp. 2d 567, 587 (E.D. La. 2008). Moreover, some courts have recognized that defendants could be potentially prejudiced by a jury painting with a broad brush in a collective action if jurors inaccurately assume all
plaintiffs are entitled to the same remedy. Duncan v. Phoenix Supported Living, Inc., 2007 WL 1033360, *3 (W.D.N.C. March 30, 2007). In addition to the rights of both parties, courts focus on whether litigating a collective action would be procedurally feasible. Courts have recognized that decertification is appropriate where litigating a collective action would be unwieldy for the court and/or a jury. Morisky v. Pub. Serv. Elec. & Gas Co., 111 F. Supp. 2d 493, 499 (D.N.J. 2000) (granting motion for decertification in part because litigating the case would be inefficient because [t]he exempt or non-exempt status of potentially hundreds of employees would need to be determined on a job-by-job, or more likely, an employeeby-employee basis. ); On the other hand, courts have denied motions for decertification where doing so would prompt the same issue to be litigated in several separate cases and waste limited judicial time and resources. Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233, 1265 (11th Cir. 2008) (holding the interests of judicial economy would not be served if the court had to conduct 1,424 individual trials regarding substantially similar overtime claims); Crawford v. Lexington-Fayette Urban County Gov t, 2008 WL 2885230, *10 (E.D. Ky. July 22, 2008) (denying decertification motion in part because it would require the same analysis of whether the plaintiff was required to record his time in over 300 separate lawsuits, which would be an inefficient way of resolving this issue ). Some courts have balanced these competing demands by creating separate subclasses for various aspects of the litigation. Rawls v. Augustine Home Health Care, Inc., 244 F.R.D. 298, 302 (D. Md. 2007) (divided the class into four separate sub-groups, one for each facility.); Ayers v. SGS Control Serv., Inc., 2007 WL 646326, *5 (S.D.N.Y. Feb. 27, 2007) (noting individual issues arising as a result of the plaintiffs fluctuating workweek claims could be resolved by the creation of subclasses by division, claim, or subclaim); Wilks v. The Pep Boys, 2006 WL 2821700, *7 (M.D. Tenn. Sept. 26, 2006) (noting factually disparate plaintiffs are often divided into subclasses for the purposes of judicial efficiency at trial ).Other courts have examined the possibility of partial decertification. See O Brien v. Ed Donnelly Enters., 575 F.3d 567, 586 (6th Cir. 2009) The O Brien court noted that the option of partial certification is important to consider, because it counters the argument that a collective action must be totally decertified if some members are not similarly situated to the others. So, you want use decertification as one of your strategies in the litigation? Now, as Paul Harvey says, you need to know the rest of the story. III. Out of the Frying Pan Decertification Has Ramifications The ill-advised strategy of fighting a two-front war is familiar to anyone who paid attention in a high school history class. Fighting in multiple directions was fatal to the efforts of Napoleonic France and of Germany in two successive world wars. Nevertheless, when it comes to decertifying FLSA collective actions (or fighting certification in the beginning stages) some learned counsel seem to have forgotten the
lessons of history and are thus doomed to repeat them or is there something else at work? Consider the following scenario: A collective action under the FLSA is filed by a lead plaintiff and is joined by 227 additional individuals who allege their pay is automatically docked for 30 minutes a day for a lunch period irrespective of whether or not they work through lunch. The individuals work for a garbage collection company with similar operations in over 30 states. Plaintiffs allege the auto-deduction practice is companywide. Plaintiffs move for conditional certification and the company opposes. What happens if conditional certification is denied? What if the 227 additional participants were the result of an initial certification and the company was seeking decertification? What happens to the claims of the 227 individuals represented by counsel when there is a determination that the claims should be litigated separately? Do the claims simply disappear? The simple answer is no. A review of the federal dockets for a few cases tells the full story of the state of certification/decertification fights. The scenario above is loosely based on the current litigation in Saleen v. Waste Management, Inc., Case No. 08-cv-04959 (D. Minn. 2008). In that case, the motion for notice was supported by 115 declarations from the group of 227 individuals who filed consents to participate in that case. The court denied certification. The result was that the claims of the individuals were re-filed in 32 states and the number of individuals with claims rose to 290 as of a few months ago. This is not a unique scenario. In Brown v. Dollar General Stores, Ltd., Civ. Action No. 7:02-cv-0673 (N.D. Ala. 2007), the court decertified a collective action involving over 2400 opt-in plaintiffs after a week of trial. The decertified individuals refiled their claims in a single, multi-plaintiff action. Gray v. Dolgencorp, Inc., et al, Civ. Action No. 7:06-cv-01538 (N.D. Ala. 2006). That suit was subsequently severed into individual actions and over 2000 cases were designated for transfer to jurisdictions across the country. Id., at Docket No. 42. As individual cases have been nearing trial in the litigation, the parties appear to be reaching resolutions of the individual matters. Thus, one suit becomes many suits, each with a certain threshold of inherent fees and costs. Similarly, in TGF Precision Haircutters, the court decertified a collective action involving over 260 individuals noting differences in job titles and geography as material differences among class members. Johnson v. TGF Precision Haircutters, Inc., 2005 WL 1994286 (S.D. Tex. Aug. 17, 2005). The decertified class members refiled 29 cases as multi-plaintiff actions with individuals grouped by job title and geography. See PACER, U.S. Case Party Index, Case Name TGF and nature of suit search code 710. While there are dozens of additional examples (New Century Financial, KFC, etc.), the import of the pattern is clear decertification is not an efficient or effective way to eliminate the claims made in collective actions. Even more puzzling than the view that decertification is an appropriate end game strategy is the view that once decertified cases are re-filed, it is appropriate to
reconsolidate them into a single proceeding, usually through multi-district litigation. 3 By way of example, Tyson Foods is currently navigating this very path. See generally, In re Tyson Foods, Inc., 502 F. Supp. 2d 1358, 1360 (USJPML Aug. 17, 2007). While there may be reasons to go down this path (trying to get the litigation assigned to an MDL judge that is different from a judge who is perceived as hostile to the moving party), there are certainly expense and delay considerations which must be weighed, especially considering the FLSA s mandate for the award of attorneys fees to successful plaintiffs. A cynical view of decertification is that some lawyers view a multi-front fight as a billing goldmine. While this author has encountered his share of attorneys who have been unabashed about the positive impact a decertification would have on billable hours, billing is not the likely driver in large collective actions. Typically in such cases, decertification decisions are made by in-house counsel in consultation with outside counsel. In-house counsel who advise upper management about where to spend litigation resources have little economic incentive to run up a bill or pad the pocketbooks of outside counsel at the expense of shareholders and owners. So, there must be some perceived or real economic advantage to seeking to splinter a case into hundreds or thousands of smaller cases (and then potentially having them re-consolidated). One explanation may be the perception that plaintiffs counsel will not re-file several hundred small cases due to either expense or lack of interest in litigating small claims. As demonstrated in the earlier paragraphs, such a calculation is empirically incorrect in many instances. While potentially costly in the short run (filing fees, deposition costs, etc), re-filing cases counsel believe to be meritorious provides the best (and probably only) chance for plaintiffs to vindicate their rights, even if not done on a collective basis. Additionally, many attorneys who do FLSA collective actions do not take cases unless they intend to see them through to the end, even if that means re-filing individual actions. While the cases may be small on an individual basis, a few victories at trial may have a domino effect for the remainder of the cases, and as the song goes, everything counts in large amounts. Another explanation for pushing decertification is the possibility of attrition. Defendants may view that participants in a collective action will withdraw from the litigation if they are required to participate as an individual litigant and be subject to written and oral discovery. This author has never seen a detailed analysis of attrition rates for re-filed collective actions to be able to comment from a statistically provable perspective. However, in this author s experience, the individuals who elect to withdraw from further litigation, to the extent this happens, are generally those whose claims are very small. This leaves the larger value claims which make up the bulk of the damages in a collective action in the first place. One would have to do a detailed economic analysis of the impact of decertification on participation rates when compared to the additional fees and costs resulting from fighting a multi-front war to know if decertification was a 3 A comparison of the standards used for MDL consideration versus certification/decertification of FLSA cases is beyond the scope of this paper. The author is only making the point that splintering a case only to glue it back together again is an expensive and roundabout path to end up where one began.
net positive or net negative. Given the number of cases that seem to resolve after claims are re-filed (when those cases would not resolve while the case was a singular action), it appears many defendants initially overestimate the upside and underestimate the downside to decertification. In short, decertification may have taken you right out of the frying pan and into the fire. Thus endeth the lesson.