California District Court Invalidates Opt-Outs And Orders Employer To Issue A Curative Notice To Employees Regarding A Putative Wage And Hour Class Action

The U.S. District Court for the Northern District of California, in a wage and hour class action, found that the employer’s written communication to putative class member employees about the action, which included an opt-out declaration form, was “problematic” and “one-sided.” The court invalidated signed opt-outs, and ordered the employer to send a “curative notice” to the employees.

The employer, a dental practice, described itself as a close-knit group of employees, and reported that many employees had expressed concern over the lawsuit and asked what they could do to help. In response, the employer reported, it prepared a letter to employees, handed out by non-management staff. The letter reportedly set forth the employer’s beliefs about the lawsuit, including its belief that “the lawsuit is motivated by greed and other improper factors” and that the plaintiff’s attorney was “seeking a very large sum of money by attempting to convince other employees to join the lawsuit.”

The letter reportedly also stated that the cost of defending the lawsuit had a significant adverse effect on the practice, that the practice could not afford to pay the claims or settle for a large sum, that a long legal battle would “jeopardize the ongoing viability of the practice,” and that the plaintiff’s attorney may want to depose the employees, subpoena them to testify in court and/or otherwise involve them in the lawsuit. The letter also reportedly included a section titled “What You Can Do,” which included an option that referred to an attached Opt-Out Declaration and envelope.

The plaintiff sought to enjoin the employer from further communications with the putative class member employees. The court found that the letter’s “one-sidedness discourage[d] participation in the lawsuit” because it "omit[ted] key information" and was “inflammatory,” but it declined to enjoin further communications. Instead, the court invalidated signed opt-out notices and ordered the employer to mail all putative class members a curative notice, written by the court, “that describes the situation in more neutral terms” and that included contact information for counsel for both sides.

Camp v. Alexander, Case No. C-13-03386 (N.D. Cal. April 15, 2014).

 

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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