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March 17, 2011
'We Want Two Different Classes in This Suit'

A group of Illinois restaurant workers sued, attempting to create two classes—one suing for wage and hour violations under state law and the other bringing the same claims under federal law. Could they do that in the same court at the same time?

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What happened. The workers had been employed as wait staff at an Outback Steakhouse in Calumet City. In court, they argued that at least since 2005, they had been required to turn over too much of their tip money to the tip pool, worked more than 40 hours without receiving overtime pay, and often failed to earn the minimum wage as a result. They wanted to sue under both the Fair Labor Standards Act (FLSA) and Illinois’ Minimum Wage Law. No surprise, restaurant management argued that they could choose a class action under one law or the other, but not both.

Noting that other federal courts had disagreed about the issue, a federal district court judge ruled against the plaintiffs, primarily because there would be a larger class—between 180 and 250 workers—under the state law, so that class should “substantially predominate.” The federal class was expected to include only about 30 workers. The plaintiffs appealed the judge’s ruling to the 7th Circuit, which covers Illinois, Indiana, and Wisconsin.

What the court said. Outback management argued that two classes would be too confusing for plaintiffs. Under FLSA, plaintiffs who could be part of the class must officially opt into the suit. By contrast, the Federal Rules of Civil Procedure section covering their state claims requires that all eligible plaintiffs be automatically included in a class action unless some individuals opt out.

Appellate judges carefully reviewed FLSA, writing that they had found nothing to suggest “that the FLSA is not amenable to state-law claims for related relief in the same federal proceeding.” So they ruled that neither set of requirements precluded the two classes from suing at the same time in the same court. Their decision is the first to be made by a federal appeals court, so such dual cases can now proceed throughout the circuit. What other appellate judges will decide remains to be seen. Ervin et al. v. OS Restaurant Services, U.S. Court of Appeals for the 7th Circuit, No. 09-3029 (1/18/11).

Point to remember: When plaintiffs are successful in wage and hour cases, employers can be liable for huge sums of back pay. And, such class action suits are becoming much more numerous, some of them probably prompted by plaintiffs’ attorneys looking to earn hefty fees. Now employers who fail to pay their workers properly will be in for double jeopardy in IL, IN, and WI.

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