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News | Nov 11, 2018

Philadelphia District Court Issues a Helpful FLSA Conditional Certification Addressing the Impact of Arbitration Agreements and the Validity of the “Lack of Interest” Argument

As most readers of this website knows, every week brings us new court decisions addressing FLSA “conditonal certification” motions.  But an October 26, 2018 opinion issued by Eastern District of Pennsylvania Judge Wendy Beetlestone caught my eye because it very efficiently and effectively rejected two arguments that companies continue to press in opposing conditional certification.  The opinion was issued in Gauzza v. Prospect Medical Holdings, Inc. and is available HERE.

Most notably, Judge Beetlestone rejected the company’s argument that conditional certification should be denied because no one had opted-in to the collective.  This argument is often referred to as the “lack of interest” argument.  In rejecting the argument, the Judge explained:  “Defendants’ argument that conditional certification should be denied because Plaintiffs have not yet secured any additional members of the collective action puts the cart before the horse. The ‘purpose’ of conditional certification is to ‘facilitate[e] notice to potential opt-in plaintiffs and conduct[] pre-trial discovery.’ Camesi v. University of Pittsburgh, 729 F.3d 239, 243 (3d Cir. 2013). Requiring Plaintiffs to secure those opt-in plaintiffs’ participation before notice is issued would entirely defeat the purpose of the conditional certification process by requiring putative members to opt in without having received notice.”  This is one of the most concise rejections of the “lack of interest” I’ve seen, and worker’s rights lawyers would be wise to quote this language the next time they confront the “lack of interest” argument.

Secondly, Judge Beetlestone rejected the company’s argument that the conditional certification analysis is impacted by the fact that some members of the putative collective signed arbitration agreements.  In this regard, the Judge explained:  “Defendants also argue that because some employees who fall within the described collective group may have signed arbitration agreements as a condition of their employment and others may not have, . . .  it would be inefficient for this case to proceed as a collective action given the need to determine which agreements are enforceable and which are not. Even if, however, it turns out that employees who receive a notice have signed enforceable arbitration agreements, this is not the appropriate stage in the litigation to decide whether to excise those potential members from the collective action. Whether an employee has signed an arbitration agreement does not speak to the dispositive legal question at the conditional certification stage: whether the putative members have claims with a factual nexus to Plaintiffs’ claims. Accordingly, for the reasons stated above, Plaintiffs’ motion to conditionally certify the class shall be granted.”  I think this is some very nice language, and it’s similar to the reasoning of a District of Columbia Judge in our firm’s Mastro’s Restaurant case.  Click HERE for access to the Mastro’s opinion.

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