FLSA Collective Action and New York Labor Law Class Action Hybrid Lawsuits

As Fair Labor Standards Act (“FLSA”) and New York Labor Law (“NYLL”) claims usually revolve around the same set of operative facts, plaintiffs frequently pursue, in the same lawsuit, the FLSA claims as a collective action and the NYLL claims as a class action under Rule 23 of the Federal Rules of Civil Procedure (“Rule 23”).

The primary difference between a Rule 23 class action and an FLSA collective action is the manner in which a class is formed. In order to participate in an FLSA collective action, an employee who is not a named plaintiff must “opt-in” or affirmatively consent to litigation of his or her claims in the named lawsuit. A Rule 23 class action does not require consent of class members. Instead, all members of the class are included as parties to the action unless they “opt- out.” To opt-out, a class member must expressly request exclusion and formally withdraw from the lawsuit.

In New York, courts can certify hybrid actions that include both an opt-in FLSA collective action and an opt-out NYLL Rule 23 class action. See Shahriar v. Smith & Wollensky Rest. Group, Inc., 659 F.3d 234 (2d Cir. 2011); See also Beckman v. KeyBank, N.A., 293 F.R.D. 467, 479 (S.D.N.Y. 2013) (“Among FLSA cases, the most complex type is the ‘hybrid’ action … where state wage and hour violations are brought as an ‘opt out’ class action … in the same action as the FLSA ‘opt in’ collective action[.]”).

In Shahriar, current and former waiters claimed that Defendant violated both the FLSA and the NYLL when it unlawfully required Plaintiffs to share tips with managers and/or employees who did not regularly interact with customers. Plaintiffs brought their FLSA claims as a collective action and their NYLL claims as a class action under Rule 23. The Second Circuit Court of Appeals held that Plaintiffs could simultaneously maintain a collective action under the FLSA, as well as a class action based on NYLL claims under Rule 23, where the facts underlying both claims “form part of the same case or controversy.”

The court concluded that the “conflict” between an FLSA opt-in case and a NYLL opt-out case was not so compelling as to warrant that they be asserted in separate lawsuits, especially because “an employee fearful of retaliation … may choose not to assert his or her FLSA rights,” but that a “class action under the NYLL allows employees to recover lost wages without the risks attendant to asserting affirmatively an FLSA claim.”

If you believe that your employer is violating the FLSA or the NYLL by not properly compensating you, it’s important to speak with a New York City wage and hour attorney to assess and determine all of your legal rights.