In a decision worth reading for all class action practitioners, especially those who face Equal Pay Act (“EPA”) issues, Judge Ronnie Abrams of the U.S. District Court for the Southern District of New York denied equitable tolling of the statute of limitations period in a high profile gender discrimination case. Judge Abrams’ decision in Barrett, et al. v. Forest Laboratories, Inc., et al., 12-CV-5224 (S.D.N.Y. July 8, 2015), serves a great primer as to the differences between calculating the limitation periods in Title VII class actions as compared to EPA collective actions and the significant impact of these differences.
Background To The Case
Eleven current/former female employees brought individual and class claims under the EPA and Title VII alleging disparate pay based on their gender in July of 2012. Id. at 2. Plaintiffs’ subsequently filed a First and Second Amended Complaint, which Defendants moved to dismiss and the Court decided in August 2014. Id.
In connection with a joint report in anticipation of the parties’ Initial Conference, Plaintiffs, for the first time, raised the issue of equitable tolling for their EPA claims. Id. Notably, at no point during the entirety of the action – dating back to the filing of the Complaint in July 2012 – had the Court ordered or any party sought a stay of discovery. Id. Eventually, Plaintiffs filed a formal motion in January 2015 seeking to toll the statute of limitations from April 2013 (the date Defendants filed their motion to dismiss) through the date conditional certification for the collective action is granted. Id. at 3.
The Court’s Decision
The Court began with a primer concerning the difference between collective actions and class actions with respect to the accrual of claims. Id. Relevant here, under the EPA (which incorporates various provisions of the FLSA), the statute of limitations for each plaintiff runs until the individual opts into the lawsuit by filing written consent. Id. at 4. Accordingly, such signed consent forms from class members do not relate back to the filing date of the Complaint as compared to Rule 23 class action claims, whereby “the commencement of a class action suspends the applicable statute of limitations as to all asserted members of the class who would have been parties had the suit been permitted to continue as a class action.” Id. Equitable tolling creates an exception to the “potential harshness” of the FLSA’s limitation period by allowing courts to extend the limitations period to avoid “inequitable circumstances,” however, must be “cautious” in doing so…lest they transform it into the Rule 23 scheme.” Id. A litigant seeking equitable tolling bears a “high burden” of establishing both: “(1) that [s]she has been pursuing [her] rights diligently; and (2) that some extraordinary circumstance stood in [her] way.” Id. at 5.
Applying this “high burden” to the facts before it, the Court refused to equitably toll the statute of limitations as “Plaintiffs cannot reasonably argue that they have been diligent in pursuing their rights or that some extraordinary circumstance stood in their way to be diligent.” Id. In so holding, the Court noted that Plaintiffs’ argument that discovery was “effectively stayed” based on the Defendants’ motion to dismiss did not hold water since the case was never stayed, nor did either party ask the Court to do so. Id. at 5-6. Accordingly, while there were delays in the briefing process and in the Court deciding Defendants’ motion, Plaintiffs “failed to explain how these delays erected any barrier to their seeking the discovery necessary to pursue conditional certification” Id. at 7.
With respect to the second requirement for the Court to apply equitable tolling – that some extraordinary circumstance stood in their way – the Court distinguished the cases relied upon by Plaintiffs since in those cases (unlike in this case) where equitable tolling was ordered, there was “something – whether discovery disputes, a discovery stay, or the court’s election to stay a certification motion pending a motion to dismiss” which prevented plaintiffs from notifying potential collective action members. Id. at 8-9.
Based on Plaintiffs’ failure to satisfy either required test for the application of equitable tolling, the Court denied Plaintiffs’ request since “to grant the exceptional remedy of equitable tolling for the pendency of a motion to dismiss when there was nothing standing in the way of a plaintiff’s pursuing collective certification would be tantamount to tolling the statute of limitations for FLSA claims as a matter of course for all potential plaintiffs whenever the first plaintiff files her complaint – a result plainly contrary to the procedural rules that govern FLSA collective actions.” Id. at 10-11.
Implication For Employers
This decision serves as a great reminder of the differences between class action certification and collective action certification and the real world impact of these differences as it pertains to the statute of limitations period. Given such differences, employers should always be mindful of the limitations period and that short of a court order otherwise, the limitations period continues to run in collective actions under the EPA and FLSA. While equitable tolling is a powerful tool for Plaintiffs’ counsel in collective actions, this decision highlights the high burden that plaintiffs’ counsel must satisfy to warrant its application in a particular case.