United States: Employers Face Increased Risk Of FMLA Class Actions As Court Holds That FMLA Claims Are Appropriate For Class Certification Under Rule 23

Seyfarth Synopsis:  A recent decision has added to the chorus of courts recognizing that FMLA class actions must be pursued under Rule 23 and are often appropriate for class certification.  As a practical matter, this means that FMLA class actions can now be pursued as opt-out – rather than opt-in – actions because the statutory language of the FMLA does not incorporate language requiring that plaintiffs affirmatively consent to join the action.  These recent decisions ultimately make FMLA class actions more attractive to the plaintiffs' bar and increase the likelihood that employers may face similar actions in the future.

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Employers who have paid time off (PTO) or short-term leave policies are now at an increased risk of facing a class action under the Family-Medical Leave Act ("FMLA") due to a recent decision in Carrel v. MedPro Group, Inc., No. 16-130, 2017 U.S. Dist. LEXIS 62969 (N.D. Ind. April 26, 2017).  The decision, which applied Rule 23 to FMLA class action claims and certified a class under Rule 23, serves as the most recent example of how plaintiffs' attorneys are achieving success in FMLA class actions and may signal that additional and similar actions may be forthcoming.

Case Background

In Carrel, the Plaintiff brought a class claim under the FMLA alleging that she was docked earned PTO and that Defendant failed to pay her unused PTO upon the termination of her employment.  Specifically, the Plaintiff alleged that Defendant's short-term leave policy violated the FMLA because each employee was provided PTO at the beginning of the year according to Defendant's PTO policy and thus, PTO was unlawfully "docked" whenever an employee took FMLA leave.  Id. at *2.

Plaintiff filed a motion for class certification under Rule 23 seeking certification of a class defined as "all current and former [Defendant] employees who took FMLA leave at any point since March 29, 2013[.]"  Id. at *5.

The Court's Decision

The Court granted Plaintiff's motion for class certification.  First, the Court rejected Defendant's argument that class certification under Rule 23 was the wrong mechanism for an FMLA class, and that the alleged class-wide  violations of the FMLA must be treated as a collective action instead.  Id. *6.  Although the Seventh Circuit has not weighed in on the applicability of Rule 23 to FMLA actions, the Court noted that other case law authorities in the Seventh Circuit have held that "class violations of the FMLA must be treated as opt-out actions pursuant to Rule 23 because the statutory language of the FMLA § 2617(a)(2) does not incorporate the additional language in the FLSA expressly requiring that plaintiffs affirmatively consent to join the action by opting-in."  Id. at *7.  Accordingly, the Court held that "Rule 23 is the correct mechanism by which to proceed with the analysis" of the Plaintiff's class certification motion.  Id. at *8.

Second, the Court proceeded to find that the requirements of Rule 23(a) had been satisfied.  Specifically, the Court found that the "commonality" requirement of Rule 23(a) was satisfied because "Plaintiff and the putative class members were all [Defendant] employees who were subject to the same uniformly applied PTO policy."  Id. at *12.  Therefore, "[w]hether the Defendant's PTO policy violated the FMLA presents a common question of law."  Id.  In so holding, the Court noted that how Defendant's policy individually impacted each member of the class was an issue relating to the merits and did not defeat commonality.  Id. at *15.

Finally, the Court noted that certification under Rule 23(b)(3) – applicable to classes seeking monetary relief – was appropriate.  In so holding, the Court found that the Rule 23(b)(3) "predominance" factor was satisfied because "causation issues, which here are actually issues concerning what damages, if any, each class member has actually suffered pursuant to the PTO policy applied in his/her own case, will not predominate over common liability issues.  Id. at *22.  Therefore, it did not matter to the Court's inquiry "how much PTO each employee used or would have used."  Id. at *23.

Implications For Employers

Employers are at an increased risk of facing similar FMLA class actions in the future in light of the fact that an increasing number of courts have found FMLA class actions to be proper for class certification under Rule 23.  The simple fact that plaintiffs' attorneys can now pursue FMLA class actions under Rule 23, instead of an opt-in class akin to FLSA claims, may serve to increase the total number of potential class members (and an employer's total exposure), and likely makes such actions much more attractive to the plaintiffs' bar.  In addition, the fact that courts have found that individual issues pertaining to employees' usage of PTO do not predominate over the overarching issue of whether an employer's PTO policy violates the FMLA also increases the likelihood that more employers may be faced with similar actions in the future.

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