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In a significant victory for employers and the principles of due process, the District of Minnesota recently joined several other federal courts around the country in holding that only workers with a connection to the forum state may join a collective action under the Fair Labor Standards Act (FLSA).
The action involves The HCI Group (HCI), a Florida-based technology company that provides support services to clients in the healthcare industry nationwide as they transition to new medical recordkeeping software. In Vallone v. The CJS Solutions Group d/b/a The HCI Group, Civ. No. 19-1532 (PAM/DTS) (filed in the District of Minnesota on June 10, 2019), the plaintiffs alleged that HCI violated the FLSA by failing to pay them and others for time spent commuting to and from worksites around the country. Plaintiffs asked the court to certify a nationwide collective action that included thousands of workers over a period of several years, including workers who neither lived nor worked for HCI in Minnesota (the forum state).
Following oral argument,1 the court held that it lacked personal jurisdiction over HCI as to claims with no connection to Minnesota. The court declined to certify a nationwide collective action, instead certifying only a limited group of individuals whose work for HCI occurred in Minnesota or who were Minnesota residents. The court’s decision flows from Bristol-Myers Squibb Co. v. Superior Court of Cal., 137 S. Ct. 1773 (2017), a mass-tort action in which the U.S. Supreme Court held that a California state court lacked personal jurisdiction over an out-of-state defendant as to claims of non-resident plaintiffs who had no connection to California. The District of Minnesota joined several other federal courts that have applied Bristol-Meyers to limit the exercise of personal jurisdiction in FLSA matters.
In doing so, the court distinguished Vallone from an earlier District of Minnesota decision refusing to apply Bristol-Meyers to a Rule 23 class action. A collective action under the FLSA is different, the court held, because individuals must affirmatively consent to join the action. This affirmative consent gives rise to an individual controversy between every opt-in plaintiff and the defendant in a collective action that does not arise through Rule 23’s opt-out mechanism. As such, in a collective action, the court must have personal jurisdiction over the defendant as to each individual plaintiff’s claims. If the defendant does not reside in the forum state, it must have sufficient contact with the forum state in order for the court to exercise personal jurisdiction over it. In Vallone, no such contact existed as to the claims of non-resident plaintiffs who did not work for HCI in Minnesota.
As courts continue to wrestle with the impact of Bristol-Meyers, the Vallone decision and others like it will serve to protect employers’ right to due process and limit the scope of overbroad FLSA collective actions.
1 Littler Shareholder Jacqueline Kalk represented HCI in this matter.