In a very interesting and off-beat decision, the Third Circuit has thrown out one class of loan officers who alleged misclassification but let stand the lower court’s decision that certified the case as a collective action under the Fair Labor Standards Act. The case is entitled Reinig et al. v. RBS Citizens NA, and issued from the Third Circuit Court of Appeals.
The panel overruled the decision that had given certification to Loan Officers across ten States who alleged that they were not properly paid for time off the clock. However, the Court allowed the decision granting collective action certification to stand as it opined that it did not have jurisdiction over that issues as a component of the Employer’s interlocutory appeal.
The Court addressed the issue of “pendent appellate jurisdiction.” This means that the appellate court is allowed in certain scenarios to assert jurisdiction over issues that are not allowed to be appealed independently but that are “intertwined” with matters over which the Court has jurisdiction. The Court herein first observed that FLSA collective certification orders are not appealable because they are not final and further concluded that the order in this case was not “inextricably intertwined” with the Rule 23 class certification determination. Thus, the Court would not exercise pendant jurisdiction over it.
The Court stated that “in so holding, we are persuaded by our prior precedent and the Second Circuit’s well-reasoned decision in [Myers v. Hertz Corp. ] that Rule 23 class certification and FLSA collective action certification are fundamentally different creatures. Further, judicial efficiency notwithstanding, the myriad problems that could result from exercising jurisdiction in this context counsel against expanding the narrow doctrine of pendent appellate jurisdiction in the way Citizens proposes.”
The legal requirements for conditional certification of FLSA claims is less onerous than securing class certification under Rule 23. The Court also noted that if it concluded that pendant jurisdiction could be asserted over FLSA certification, then, in the future, a party could “abuse the doctrine” by filing insipid interlocutory appeals so that litigant could get appellate review before a final decision on that issue has been rendered by the district court.
In another (very) interesting twist, the Third Circuit criticized the lower court for not doing its job of specifying the particular classes and claims that were involved. Indeed, the Court stated that it was compelled to “comb through and cross-reference multiple documents in an attempt to cobble together” the classes and claims that might be amenable to class adjudication.
The Takeaway
Rule 23 claims are harder for a plaintiff to establish as a class. The danger is that the Rule 23 action is an opt-out, not an opt-in, as a FLSA collective action is; everybody is in except for a handful that might opt out. It is an interesting twist because I think the Court is right—there would be defendants/employers who would utilize this vehicle as a poor man’s way of getting the collective action certification issue examined sooner rather than later.
Sounds only like good lawyering…
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