Hybrid wage-and-hour class actions, which combine a Fair Labor Standards Act ("FLSA ') opt-in collective action and a Federal Rule of Civil Procedure Rule 23 opt-out class action in a single civil action, demonstrate the unusual interplay of opt-in and opt-out rules. The hybrid class action, and its viability as a mechanism for wage law enforcement, raises fundamental questions as to who participates in lawsuits, how we should hold employers accountable for wage-and-hour noncompliance, and the role of the federal courts in enforcing public rights. An opt-in rule tends to produce low participation rates, while an opt-out rule tends to produce high participation rates. This means that employers are typically confronted by a larger number of state claims in the Rule 23 class action than federal claims in the FLSA action. The substantive consequences of dual certification, along with related jurisdictional and policy issues, have created division within the federal courts regarding whether FLSA opt-in collective actions and Rule 23 opt-out class actions may consistently coexist. While wage laws have historically been undermined by persistent underenforcement, the hybrid class action has the potential to expand enforcement. This Article examines the relevance of the FLSA opt-in action and its opt-in rates to Rule 23 class certification and federal jurisdiction for
state wage claims. This Article engages in critical evaluation of the reasons for low FLSA opt-in rates by providing a comprehensive collection of empirical data on opt-in rates, analyzing reasons for low opt-in rates, and articulating the implications for wage law enforcement. This Article argues that FLSA section 216(b) and Rule 23 are consistent procedural enforcement mechanisms, and advances approaches to Rule 23 class certification and federal jurisdiction that integrate an understanding of low opt-in rates. Ultimately, this Article proposes that dual certification of FLSA collective actions and Rule 23 class actions is an appropriate response to the unusual interplay of opt-in and opt-out rules in hybrid class actions.
Berkeley Journal of Employment and Labor Law, Vol. 29, Issue 2 (2008), pp. 269-310