New Notice Standard Established in FLSA Collective Actions

Employers now have expanded protection from broad collective actions under the Fair Labor Standards Act (FLSA). Before a court can authorize notice of a collective action to potential plaintiffs, their employer must have an opportunity to show that they are subject to valid arbitration agreements waiving their rights to sue, the U.S. Court of Appeals for the Seventh Circuit held. Because the notice often drives settlement discussions in FLSA collective actions, ABA Section of Litigation leaders expect that, if followed, the ruling will increase employers’ settlement leverage in the future.

New Framework for Collective Action Notice Procedures

In Bigger v. Facebook, a Facebook employee filed a putative collective action against Facebook alleging violations of the overtime-pay requirements of FLSA and Illinois state law. On the plaintiff’s motion to certify a collective action and notify her fellow employees of their opportunity to join the lawsuit, the employer objected, asserting that many employees had signed arbitration agreements waiving their rights to participate. The U.S. District Court for the Northern District of Illinois granted the plaintiff’s motion.