by Michael Kun and Aaron Olsen
In recent years, some plaintiffs' counsel bringing wage-hour claims have have made the strategic decision to bring "hybrid" class actions; that is, actions alleging both federal and state wage-hour claims. These cases can cause logistical nightmares for the courts, and great benefits for plaintiffs, for two primary reasons: (1) the standard for certification of a class is different for federal and state claims, and (2) classes in federal claims are "opt in" classes while those for state claims are "opt out" classes. Indeed, in bringing "hybrid" claims, plaintiffs may seek to take advantage of the lower threshold for achieving conditional class certification under the federal Fair Labor Standards Act ("FLSA"), only to later seek to take advantage of the Rule 23 requirement that one must affirmatively “opt out” of the class.
The courts appear to be seeing through this gamesmanship. A number of courts have refused to permit both federal and state wage-hour claims to proceed on the same issues, noting the inconsistencies and practical difficulties raised. Most recently, on November 3, 2010, the Ninth Circuit denied the plaintiff’s petition to appeal the district court’s order granting defendants’ motion to dismiss the state wage-hour claims that were part of the "hybrid" complaint in Daprizio v. Harrah’s Las Vegas, Inc., Case No.: 2:10-cv-00604-GMN-RJJ (Nev., August 17, 2010.)
In addressing the claims for alleged violations of the FLSA and Nevada law, the district court concluded that the the state law claims could not proceed because of the tension between the "opt in" procedure of an FLSA collective action and the "opt out" procedure of a typical Rule 23 class action. Simply, those procedures are incompatible.
The district court’s opinion in Daprizio is important for employers faced with "hybrid" class actions because it may be cited in opposing plaintiffs' efforts to use such claim to pick and choose which class action procedures to follow and when.