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EEOC, DOL Defend 2-Step FLSA Cert. Process

Friday, January 04, 2013

The U.S. Department of Labor and the Equal Employment Opportunity Commission on Thursday backed the two-step certification process used in Fair Labor Standards Act collective actions, urging the Fifth Circuit to shoot down Wells Fargo & Co.'s attempt to have the court apply traditional certification standards in its wage-and-hour litigation.  The DOL and EEOC's amicus brief said the appeals court should affirm a Houston federal judge's August order granting conditional certification in multidistrict FLSA litigation alleging that Wells Fargo stiffed home mortgage consultants on overtime pay. 
Conditional certification, the first phase of the two-step approach, is uniformly used by other federal courts and requires a court to determine only whether discovery and notice should be authorized, the brief said. Employees need to be noticed in FLSA actions because, unlike federal class actions governed under Federal Rule of Civil Procedure 23, members must opt-in to the class, the DOL said.  

Moreover, noticing lets judges know the makeup of the collective action relatively soon in the proceedings and before the court must determine whether members are similarly situated for trial, the DOL said. Success at the notice stage does not give employees an advantage when the court conducts its more rigorous analysis to determine whether plaintiffs are similarly situated and should be certified for trial, the brief said.  “Courts are correct to apply a fairly lenient standard to determine whether employees are similarly situated for purposes of authorizing discovery and notice of the collective action,” the DOL said.  Wells Fargo has argued that the Supreme Court's landmark decision Wal-Mart Stores Inc. v. Dukes precluded conditional FLSA certification. The U.S. Chamber of Commerce has come out in support of Wells Fargo and in its own amicus brief ripped conditional class actions, saying they are a “Frankenstein's monster” that combines a hodgepodge of class action procedure.  Wells Fargo is petitioning the Fifth Circuit for a writ of mandamus and has not filed a formal appeal. Conditional certification decisions, which Wells Fargo is fighting, are not collateral orders and therefore may not be appealed, the government said.   In the decision that sparked the Fifth Circuit fight, U.S. District Judge Gray H. Miller said Dukes involved traditional Rule 23 class actions — meaning it doesn't apply to the current case.

The DOL and EEOC echoed much of Judge Miller's decision on Thursday. District courts have “overwhelmingly rejected” the argument that Rule 23 applies to FLSA collective actions, the DOL said.  “The Supreme Court's analysis of Rule 23's commonality requirement in Dukes does not change the fact that Rule 23 does not apply to FLSA collective actions,” the brief said.  The government also said collective actions are particularly helpful in the EEOC's enforcement of the Equal Pay Act and the Age Discrimination in Employment Act and the DOL's enforcement of the FLSA. (click on link to read full story) 

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