Can Defendants Obtain Discovery from Each “Party Plaintiff” in a Collective Action?

Since 2000, the number of wage and hour cases filed under the Fair Labor Standards Act (“FLSA”) has increased by more than 450 percent, with the vast majority of those cases being filed as putative collective actions.  Under 29 U.S.C. § 216(b), employees may pursue FLSA claims on behalf of “themselves and other employees similarly situated,” provided that “[n]o employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought.”  Despite the prevalence of FLSA collective actions, the legal implications and consequences of being a “party plaintiff” in such an action continue to be addressed.  The Court of Appeals for the Third Circuit recently examined this issue, in an opinion that may prove useful to defendants seeking to obtain discovery from all opt-in plaintiffs in a putative collective action.

In Halle v. West Penn Allegheny Health System, Inc. et al., the named plaintiff filed a putative collective action alleging defendants violated the FLSA by failing to properly pay employees for work performed during meal breaks.  The district court dismissed the collective action allegations based on a related case that had previously been decided, and dismissed the opt-in plaintiffs’ claims without prejudice to re-filing individual actions.  After the named plaintiff subsequently settled his individual claim, three opt-in plaintiffs sought to appeal the district court’s decision.

The Third Circuit held the opt-in plaintiffs lacked the right to appeal, because they were no longer “parties” after the collective action claims were dismissed. The opt-in plaintiffs retained the right to pursue their own individual claims, but they had no right to pursue an appeal from the named plaintiff’s individual final judgment.  The court held that, “[b]y consenting to join Halle’s collective action, these opt-in plaintiffs ceded to Halle the ability to act on their behalf in all matters, including the ability to pursue this appeal.”

In reaching this decision, the Third Circuit engaged in an extensive analysis of the “fundamental question arising from the procedural history of this case: just what is a ‘collective action’ under the FLSA?” Unlike a class action brought under Federal Rule of Civil Procedure 23, where all putative class members are bound by the court’s ruling unless they affirmatively “opt out” of the case, “the existence of a collective action depends upon the affirmative participation of opt-in plaintiffs.”  As the Third Circuit noted, “[t]his difference means that every plaintiff who opts in to a collective action has party status, whereas unnamed class members in Rule 23 class actions do not,” prompting “the as-yet unanswered question of what ‘party status’ means in a collective action.”

The court’s analysis of this issue, while tangential to Halle’s holding, highlights the tension inherent in the language of FLSA § 216(b), which, according to the Third Circuit, “raises more questions than it provides answers.  While the first sentence [of § 216(b)] sounds in representational terms (to proceed ‘in behalf of’ others ‘similarly situated’), the second sentence refers to those who file consents as ‘party plaintiffs,’ seeming to imply that all who affirmatively choose to become participants have an equal, individual stake in the proceeding.”  This tension is particularly significant with regard to defendants’ discovery rights in a collective action.

Under Rule 33 and Rule 34 of the Federal Rules of Civil Procedure, in the absence of any court-imposed limits, a party may serve interrogatories and document requests “on any other party.”  Based on this language, and FLSA § 216(b)’s designation of individuals who opt in to a collective action as “party plaintiffs,” arguably a defendant in a collective action should be entitled to serve discovery requests on each individual who opts in to the litigation, unless the court orders otherwise.  Despite this fact, the Third Circuit noted that, “[f]requently,” discovery in collective actions “focuses on the named plaintiffs and a subset of the collective group,” a limitation that may hinder defendants’ ability to present individualized defenses that may not be applicable to all opt-in plaintiffs.

While the Third Circuit did not fully resolve the question of what it means to be a “party plaintiff,” two aspects of the Halle decision may prove helpful to defendants seeking to assert their right to obtain discovery from all opt-in plaintiffs in a collective action.  First, as noted above, the Third Circuit emphasized that each opt-in plaintiff “has party status.”  This language, when read in conjunction with the Federal Rules of Civil Procedure regarding the scope of discovery, should support defendants’ right to seek discovery from “any other party,” including all opt-in plaintiffs.

Second, in holding that the opt-in plaintiffs had no right to appeal a final judgment involving the named plaintiff, the court emphasized the importance of “the language of their opt-in consent forms, which handed over all litigation authority to named plaintiff.” The Third Circuit noted that courts often rely on the language of the opt-in consent form “to determine which rights opt-in plaintiffs delegated to the named plaintiffs.”  Based on this guidance, defendants may wish to propose including language in the opt-in consent form stating that individuals who join the collective action may be required to provide documents and information, sit for depositions, and/or testify at trial.  Such language may help demonstrate that the opt-in plaintiffs were meant to be treated as active parties to the litigation, with the same rights and obligations as named plaintiffs.

While a court may ultimately exercise its discretion to impose limits on the scope of discovery, particularly in collective actions with a large putative class, the Third Circuit’s analysis in Halle may prove useful to defendants seeking support for their argument that they should be entitled to obtain discovery from each opt-in plaintiff.