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June 03, 2013
Supreme Court ruling impacts wage and hour class action suits

A recent decision by the U.S. Supreme Court in a class action lawsuit, Comcast Corp. v. Behrend, involved Philadelphia plaintiffs contending that Comcast had either bought or pushed out all potential competitors, leaving the company free to overcharge their customers there.

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What's this got to do with employers? The plaintiffs, potentially a class of 2 million, offered an expert to testify about the anticompetitive effect on Comcast's pricing of cable TV service. It's been said that the testimony was somewhat flawed, but not so badly as to be misleading. The majority of the justices ruled that it could not be presented to a jury, not because it was flawed but because the jury needed to hear from the plaintiffs themselves what the overpricing effect was on each of them. (Imagine hearing from 2 million plaintiffs!)

The 3rd Circuit, which covers Delaware, New Jersey, and Pennsylvania, had certified the class, but the conservative judges said “No,” basing their view on the huge Wal-Mart v. Dukes rejected class action suit. In that case, which was intended to include 1.5 million women nationwide who worked for Wal-Mart, the charge was that women had been consistently underpaid and failed to be promoted.

The fact that individual store managers made major personnel decisions for their stores seemed to be the major factor that scuttled the class status for that case, which we find understandable. The ruling in the Comcast case is less clear, but Justice Antonin Scalia, speaking for the majority, pointed to his contention in Dukes that a "rigorous analysis of any models proffered by the plaintiffs claiming damages on a class-wide basis" must be conducted. But wait until you see the impact that the Comcast decision has had on employment cases.

Ruling has impacted wage and hour class action suits. Plaintiffs' lawyers have had a field day with class action suits under the Fair Labor Standards Act (FLSA), as you probably know. Common scenario: A nonexempt plaintiff or two from a worksite complain that their 30-minute meal breaks are automatically deducted from their paychecks but that they rarely, if ever, get to have those uninterrupted breaks. So they sue for back pay, alleging at the same time that all or most of their other nonexempt coworkers have the same problem. Their lawyers then go trolling for further clients and take the employer to court in the hope of collecting both huge damages for their clients and huge fees for themselves.

The Court's decision in Comcast has, for now anyway, halted that entire movement. Just 5 days after that decision, the justices applied the same principle to an employment wage and hour suit in Ross v. RBS Citizens.  Two groups of bank employees sued—one for several kinds of off-the-clock work and the other for misclassification as exempt instead of nonexempt.
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