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In re Wells Fargo Wage and Hour Employment Practices Litigation

Court Upholds Favorable Ruling in Worker Protection Case

    

 

AARP’s brief asked a federal appeals court to refuse to eviscerate the ability of workers to collectively enforce their rights. The appeals court declined to review the lower court’s favorable decision.

Background

A group of current and former Home Mortgage Consultants (HMCs) in Texas, New Jersey, Illinois and Washington brought five separate lawsuits against their employer, Wells Fargo Bank, alleging that Wells Fargo violated the federal Fair Labor Standards Act (FLSA) by failing to pay them overtime compensation over a period of several years.

In each of the suits, the plaintiffs sued on behalf of themselves and other similarly situated employees as required by the FLSA in order to obtain a remedy for all of the plaintiffs and those employees they seek to represent. The federal district court in Houston, in which the five cases were consolidated, conditionally certified them as FLSA collective actions and ordered that more than 15,000 HMCs in more than 3,000 locations across the country be notified of their right to participate in the suits.

Unlike most federal civil rights statutes that require plaintiffs seeking relief on behalf of a group of employees to file a class action, workers seeking relief for themselves and others under the FLSA must do so in a collective action. There are two major differences between class and collective actions. First, in a class action all people who fit within the class defined in the complaint filed in court are automatically bound by the court’s decision in the case. There are very limited circumstances under which class members can “opt-out” of a case. On the other hand, those who want to participate in a collective action must affirmatively “opt-in” by filing their written consent with the court.

The other major difference between a class action and a collective action is that in order to have the court certify a case as a collective action, plaintiffs must show that they and those who opt-in are “similarly situated,” a relatively lenient standard. In contrast, the much more burdensome and restrictive requirements for class certification have become even more so because of the Wal-Mart v. Dukes ruling by the U.S. Supreme Court in 2011, which sharply narrowed class action rights in the context of employment cases.

In the Wells Fargo litigation, in response to the district court’s order certifying these consolidated cases as collective actions and requiring that notice be sent to the over 15,000 people eligible to join the suits, Wells Fargo requested that the appeals court countermand the district court’s order and, pursuant to the Supreme Court’s Wal-Mart decision, impose the much more stringent class action rules on all collective actions.

On behalf of AARP, AARP Foundation Litigation attorneys filed a friend-of-the-court brief supporting the plaintiffs opposition to Wells Fargo’s request. The brief addressed the potentially far-reaching adverse effects of Wells Fargo’s request, which could have not only essentially eliminated the collective action mechanism by requiring all representative actions to be litigated under the class action rules, but could also have directly impacted the federal Age Discrimination in Employment Act, which carries similar provisions regarding collective actions.

The appeals court let stand the lower court ruling, leaving the favorable decision in this case undisturbed without setting any new precedents.
 
What’s at Stake

Eviscerating workers’ rights to proceed in a collective action and instead forcing them to seek group remedies only via a class action runs afoul of the intent of Congress in enacting the FLSA. The plaintiffs and AARP provided the court with many excellent reasons for rejecting the rule proposed by Wells Fargo.

Case Status

In re Wells Fargo Wage and Hour Employment Practices Litigation was decided by the U.S. Court of Appeals for the Fifth Circuit.


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Our legal advocacy initiatives  - conducted by AARP Foundation Litigation (AFL) - reflect more than 15 years of work in federal and state courts across the country. Through our efforts, we support the Foundation’s four priority areas: Hunger, Income, Housing and Isolation, and ensure that those 50 and older have a voice in the laws and policies that affect their daily lives.