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Saturday, June 15, 2013

Busk v. Integrity Staffing Solutions: Plaintiffs May Pursue Both FLSA Collective Action and State Law Class Action

Busk v. Integrity Staffing Solutions, Inc., ___ F. 3d ___ (9th Cir. 4/12/13), addresses an issue that has come up fairly frequently in the last few years, especially since passage of the Class Action Fairness Act (CAFA): whether a plaintiff can bring both a Rule 23 class action and a Fair Labor Standards Act (FLSA) collective action in the same case. According to Busk, the answer is yes.

The plaintiffs worked as hourly employees in warehouses in Nevada. They sued their employer, Integrity, for violations of both the FLSA and Nevada labor laws, alleging that required security screenings resulted in unpaid time. The district court granted Integrity's Rule 12(b)(6) motion to dismiss, and the plaintiffs appealed.

The Ninth Circuit reversed, holding that although FLSA collective actions utilize an opt-in procedure, while Rule 23 class actions utilize an opt-out procedure, "FLSA’s plain text does not suggest that a district court must dismiss a state law claim that would be certified using an opt-out procedure," and "a federal lawsuit combining state and federal wage and hour claims is consistent with FLSA." Slip op. at 7. Addressing the concern that allowing both classes to proceed simultaneously would confuse class members, the Court held that district courts "should be able to 'work[] out an adequate notice in this type of case.'" Slip op. at 9.

On the merits, the Court held that the district court erred in holding that the plaintiffs failed to state a claim under FLSA for passing through security clearances at the end of the day. The plaintiffs alleged that Integrity required the security screenings, which must be conducted at work, and which served to benefit Integrity by preventing employee theft. The Court held that such time, as alleged, was compensable under the FLSA. Slip op. at 9-12.

However, the district court did not err in dismissing the plaintiffs' claim for shortened lunch periods. The Court noted that the FLSA does not require compensation for an employee's lunch period, but that the employee must be "completely relieved from duty for the purposes of eating regular meals." It then held that the plaintiffs' allegation here -- that they were not relieved of duty because they had to clock out and then walk from the time clock to the lunch room -- did not state a claim for relief: "Walking to the lunchroom is not necessary to the plaintiffs’ principal work as warehouse employees." Slip op. at 13.

Busk v. Integrity Staffing Solutions, Inc., is available here

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