Wage and Hour Class Certification: Impact of Appellate Authority Applying the Specific Jurisdiction Rule of Bristol-Myers to Collective Actions

Description

On Aug. 17, 2021, in Canaday v. The Anthem Companies Inc., the U.S. Court of Appeals for the Sixth Circuit became the first appellate court to hold that only individuals with a connection to the forum state may join a collective action under the FLSA. This ruling protects employers by limiting their liability and expense in litigating claims of nonresident opt-in employees who join an FLSA collective action. It also prevents an employee from engaging in forum shopping of federal courts for the most favorable outcomes.

In Vallone v. The CJS Solutions Group d/b/a The HCI Group, the Eighth Circuit affirmed a district court's conclusion that Bristol-Myers Squibb applied to limit the scope of an FLSA action. In Vallone, the plaintiffs asked the district court to certify a nationwide collective action that included thousands of workers over several years, including workers who did not live in the forum state, Minnesota, or work for HCI (a Florida company). The district court declined to conditionally certify a nationwide collective action, instead conditionally certifying only a limited group of individuals whose work for HCI occurred in Minnesota or who were Minnesota residents.

In Waters v. Day & Zimmermann NPS Inc., a divided panel of the First Circuit disagreed, noting that the Sixth and Eighth Circuit “decision[s do not] suggest that the Fourteenth Amendment directly limits federal-court authority to entertain multi-state collective actions,” and thus concluding that those courts had overreached in extending Bristol to adjudication of nationwide federal claims in a federal court.

These decisions constitute a split among the federal circuit courts of appeal as to whether Bristol-Myers Squibb should apply to FLSA collective actions, a question that the Supreme Court ultimately may have to answer. The decisions also make "forum shopping" less attractive in the Sixth and Eighth Circuits, where plaintiffs who file collective actions against nonresident defendants will have a more difficult time achieving conditional certification of nationwide collective actions. The developments in this jurisprudence will likely impact strategy and options for employers defending putative collective litigation outside the employer's home state.

Listen as our expert panel discusses these decisions' impact on future collective and class actions in employment claims. The panel will address best practices for stakeholders seeking certification (or decertification) of such claims.