A federal court in California recently held that the unenthusiastic response to an opportunity to opt-in to a Fair Labor Standards Act wage/hour collective action against a retailer dooms certification of an opt-out class action alleging violations of state law. Zulewski v. The Hershey Company, Case No. CV 11-05117-KAW (N.D. Cal. April 23, 2013).
Zulewski and other current and former employees filed a complaint against The Hershey Company, seeking to certify both a nationwide FLSA collective action on behalf of all Hershey retail sales representatives, as well as a Rule 23 class action on behalf of all sales representatives in California alleging failure to pay overtime. There were 53 California sales representatives. However, only five of them chose to opt-in to the nationwide FLSA collective action. The court held that, given this low opt-in rate, certification of a class action on behalf of all California sales representatives would be inappropriate. The court reasoned that, “[w]hile the Court agrees that not filing an opt-in form is passive and not an affirmative choice not to opt-in, the Court is also concerned that allowing an opt-out class action, with the knowledge that many potential class members were non-responsive to the FLSA opt-in collective action, could amount to a deprivation of rights.”
Zulewski offers retailers an additional tool to fight certification of a wage/hour class action. Although courts are more likely to at least preliminarily certify an FLSA collective action, because preliminary certification has a lower threshold than class action certification, a low rate of opt-ins may present a powerful argument to defeat certification of an opt-out class action.