Overtime Class Action Lawsuit In California
As the Supreme Court noted nearly 30 years ago in discussing the significance and importance of the class action device:
"'Modern society seems increasingly to expose men to . . . group injuries for which individually they are in a poor position to seek legal redress, either because they do not know enough or because such redress is disproportionately expensive.
If each is left to assert his rights alone if and when he can, there will at best be a random and fragmentary enforcement, if there is any at all. This result is not only unfortunate in the particular case, but it will operate seriously to impair the deterrent effect of the sanctions which underlie much contemporary law.
The problem of fashioning an effective and inclusive group remedy is thus a major one." (Vasquez v. Superior Court (1971) 4 Cal. 3d 800, 807 [94 Cal. Rptr. 796, 484 P.2d 964, 53 A.L.R.3d 513].)
A potential liability for defense costs to class members who are required to opt-out to avoid such membership, would undermine the effectiveness of the group remedy provided by the class action.
Defense fees and costs could easily dwarf the potential overtime compensation recovery each worker might obtain. With potential risks far outweighing potential benefits, workers may well forego asserting their statutory wage and hour rights.
In particular, exposing absent class members to defense fees and costs in an overtime compensation claim case magnifies the chilling effect that an application of section 218.5 would have on enforcement of the overtime laws.
Employers who are violating the overtime laws would be emboldened to continue in the reasonable belief that individual employees' fears of being held liable for court costs would mean employers would be less likely to face a broad-based, class action suit to recover such improperly withheld overtime.
Contrast this with what happens under the Fair Labor Standards Act (FLSA), 29 United States Code section 216(b). In order to be bound by a judgment under FLSA, an overtime claimant must submit a written consent to the court.
Once the employee opts in, he or she becomes a "party plaintiff" under section 216(b), and must be named individually in the action to have standing. (See OTR Drivers v. Frito-Lay, Inc. (10th Cir. 1993) 988 F.2d 1059, 1061, fn. 6 [contrasting class action pleading on behalf of "similarly situated" employees with collective action requirement of naming individual party plaintiffs].)
Unlike an unnamed class member, a FLSA "party plaintiff" is thus truly a "party" who has made an affirmative choice to participate actively in the collective action.
FLSA's opt-in procedure was enacted as a limitation on private FLSA plaintiffs. (See Hoffmann-La Roche Inc. v. Sperling (1989) 493 U.S. 165, 173 [110 S. Ct. 482, 487-488, 107 L. Ed. 2d 480].)
No such limitation exists under California law; it requires that absent class members be given the more favorable option of opting out of a class action. (See, e.g., Trotsky v. Los Angeles Fed. Sav. & Loan Assn. (1975) 48 Cal. App. 3d 134, 151-152 [121 Cal. Rptr. 637]; Home Sav. & Loan Assn. v. Superior Court (1974) 42 Cal. App. 3d 1006, 1010 [117 Cal. Rptr. 485]; for a specific statutory direction to this effect in an unrelated area, see Civ. Code, 1781, subd. (e)(1); see also Super. Ct. L.A. County, Local Rules, rule 15.18 (f)(4)(b), (c), (d) & (e).)
Such a result would undermine not only a strong public policy but also judicial efficiency. It would encourage absent class members to opt out in order to bring their own claims individually.
If an individual wage claimant is going to be held liable for defense fees, it makes much more economic sense to be liable only for the defense of an individual action rather than for the defense of a class action. Bringing an individual case also allows more control over the litigation than as an absent class member.
However, the end result of this is to foster repetitious litigation of essentially identical claims by individuals whose claims could otherwise be resolved in one class action.