Wage & Hour Class And Collective Action Review – 2025

at *6. The case was then re-assigned to another district court judge, who proceeded to decertify the Rule 23(c)(4) class months before the case was scheduled to go to trial, on the basis that DirectSat’s liability could not be resolved on a class-wide basis, and the 15 certified issues would not resolve the lawsuit, given, amongst other things, the variance of the claims at issue. Id. at *9. Although the original named plaintiffs settled their claims individually, they reserved their right to appeal the decertification decision, which they did . Subsequently, the Seventh Circuit affirmed the district court’s decertification order, though on slightly different grounds. The Seventh Circuit affirmed the decertification of the Rule 23(c)(4) issues class action. The Seventh Circuit first rejected plaintiff’s arguments that the new judge should have deferred to the previous judge’s ruling certifying the 15 issues for trial under Rule 23(c)(4), given Rule 23’s broad authority to revoke or alter class certification prior to a final judgment. Id. at *15. The Seventh Circuit then turned to the issue of whether the plaintiffs’ class action was properly decertified and concluded that the district court did not err in doing so. The Seventh Circuit observed there was a circuit split regarding the interaction between Rule 23(b)(3) and Rule 23(c)(4). The Fifth Circuit currently limits Rule 23(c)(4) classes to instances where the plaintiff’s cause of action, taken as a whole, satisfies Rule 23(b)(3)’s predominance requirement. By contrast, the Second, Third, Fourth, Sixth and Ninth Circuits permit Rule 23(c)(4) certification so long as common questions predominate in resolving the individual issues to be certified. Id. at *19. Ultimately, the Seventh Circuit agreed with the majority approach, but also concluded that a class should not be certified under Rule 23(c)(4) unless the certification would be superior to any other methods of adjudicating the controversy. Id. Thus, in addition to demonstrating that common questions predominate as to each issue to be certified, the party seeking certification under Rule 23(c)(4) also must show the proposed issues would be the most practical and efficient way to resolve the litigation. Id. at *23. Using this approach, the Seventh Circuit took issue with the district court’s ruling, because it examined whether common questions predominated for the entire cause of action, rather than looking to see whether common questions predominated as to each of the certified issues. Id. Despite this, the Seventh Circuit agreed with the district court’s determination that proceeding to trial on the certified issues would not be “superior to other available methods for fairly and efficiently adjudicating the controversy” as required by Rule 23(b)(3). Id. In Quiroga, et al. v. Olds Products Co. Of Illinois , 2024 U.S. Dist. LEXIS 188943 (E.D. Wis. Oct. 17, 2024), the plaintiff, a former employee, filed a class and collective action alleging that the defendant violated the FLSA and Wisconsin’s wage laws by failing to pay him and other hourly employees for work performed prior to the start and after the end of their shifts. The plaintiff contended that the defendant’s time clock rounding practices failed to pay for all hours worked, and that the defendant excluded non-discretionary bonuses from overtime calculations. At the beginning of the case, the parties stipulated to conditional certification of a collective action for the FLSA claims. Following discovery, the plaintiff subsequently moved for class certification of the Wisconsin state law claims pursuant to Rule 23, and the court denied the motion. The plaintiff asserted that the defendant’s electronic time clock rounding reduced the total time worked for employees. The clock-in times were rounded to the scheduled start time, and clock-out times were rounded to the nearest 15-minute interval, which the plaintiff asserted deprived workers of compensation for time spent before or after their shifts. Additionally, the plaintiff argued that quarterly performance bonuses, which were awarded based on subjective criteria like performance and company values, should have been included in the calculation of the regular rate of pay for overtime purposes. The plaintiff sought to certify a class of all current and former hourly-paid, non-exempt production employees who worked at any time after March 29, 2020. The court found that the plaintiff failed to demonstrate that the class met the commonality requirement of Rule 23(a). The court reasoned that while the rounding practice applied uniformly, it was unclear whether it resulted in actual loss of compensable time for each employee, which would lead to individualized inquiries of the employees’ behaviors and whether employees worked before or after their scheduled shifts. Similarly, the court noted that not all class members received performance bonuses, and even those who did could not show that the bonuses were non- discretionary for overtime purposes. For these reasons, the court concluded that the plaintiff failed to provide sufficient evidence of commonality between all proposed class members and denied the motion for class certification. After conditional certification, using discovery to demonstrate the individualized nature of plaintiffs’ claims is crucial for an employer seeking to successfully decertify a collective action. In Miller, et al. v. SBK Delivery, LLC, 2024 U.S. Dist. LEXIS 35226 (S.D. Ohio Feb. 29, 2024), for instance, the plaintiff filed a collective action alleging that the defendant misclassified him and others similarly-situated as independent contractors and thereby failed to pay overtime compensation in violation of the FLSA. The court granted the plaintiff’s motion for conditional certification of a collective action, and 19 opt-in plaintiffs joined the action. After discovery, the

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