While this blog’s focus generally is on the substantive provisions of the Fair Labor Standards Act and state wage-and-hour laws, due to the prevalence of class action litigation, it is sometimes necessary to address procedural issues of importance to wage and hour litigation, such as arbitration agreements. Another important procedural facet of many wage-and-hour litigations is the requirements for class certification under Federal Rule of Civil Procedure 23 and/or state law analogues, such as Article 9 of the New York Civil Practice Law and Rules. In a new decision arising in the antitrust context, the Supreme Court recently ruled that under FRCP 23(b)(3) courts must assess how Plaintiffs propose to establish not only liability but damages on a class-wide basis. Comcast Corp. v. Behrend, 2013 U.S. LEXIS 2544 (U.S. Mar. 27, 2013).
In Behrend, the court ruled that Plaintiffs’ burden on certification is not limited to establishing common questions of fact applicable to class-wide liability. The representative plaintiffs must also demonstrate how damages will be awarded on a class-wide basis via formula or other generally applicable means, so as to avoid the problem of individualized inquiry into damages after a finding of class-wide liability. Applying this standard, the Court ruled that the plaintiffs’ proposed damages model fell “far short of establishing that damages [we]re capable of measurement on a classwide basis.” Without so establishing, plaintiffs could not “show Rule 23(b)(3) predominance” because “[q]uestions of individual damage calculations [would] inevitably overwhelm questions common to the class.”
In one early application, a New York federal judge has rejected class certification of claims under the New York Labor Law, citing to the decision’s key holding concerning the required damages analysis. Roach v. T.L. Cannon Corp., 2013 U.S. Dist. LEXIS 45373 (N.D.N.Y. Mar. 29, 2013)(“Plaintiffs contend that damages need not be considered for Rule 23 certification even if such damages might be highly individualized . . . This position is in contravention of the holding of Behrend”). Employers embroiled in litigation must analyze the legal and strategic viability of challenging attempts for class certification on this basis. As always, of course, compliance remains the best medicine for employers wishing to avoid employment law issues.