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News | Sep 13, 2009

Another FLSA/PMWA Rule 23 Settlement Demonstrates Yet Again that the “Inherrent Incompatibility” Doctrine is a Fair Weather Defense of Convenience

Once again, a Pennsylvania district court has approved, under Federal Rule 23, the settlement of an overtime class/collective action lawsuit alleging violations of both the Fair Labor Standards Act and the Pennsylvania Minimum Wage Act. This time, in In re Montgomery Scott Financial Consultant Litigation, 2009 U.S. Dist. LEXIS 60790 (E.D. Pa. July 9, 2009), the district court approved the Rule 23 opt-out settlement of overtime claims brought by Pennsylvania securities brokers who alleged that they had been misclassified as exempt from the overtime pay provisions of the FLSA and the PMWA. (This case is similar to litigation brought by WLF on behalf of Pennsylvania staff accountants who seek overtime benefits under the PMWA). But wait a minute; I thought PMWA class actions were “inherrently incompatible” with FLSA collective actions under a long line of EDPA cases. Actually, Pennsylvania district court judges and defense lawyers are more than willing to turn a blind eye to the so-called the “inherrent incompatibility” doctrine when applying it would stand in the way of a settlement. This is not such a bad thing, since the so-called “inherrent incompatibility” doctrine has been almost uniformly rejected by district judges outside of Pennsylvania.

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