Transportation Law Update: Transportation Related FLSA Collective Action Case Reaches Seventh Circuit
Smith v. Professional Transportation, Inc., 5 F.4th 700 (7th Cir. 2021)
On July 16, 2021, the United States Court of Appeals for the Seventh Circuit ruled on a case involving alleged violations of the Fair Labor Standards Act (“FLSA”) in the transportation industry.
Peggy Smith (“Smith”), individually and on behalf of similarly situated individuals, appealed an Indiana district court decision to the Seventh Circuit, after the district court granted summary judgment dismissing Smith’s individual and collective claims.
Smith worked for Professional Transportation, Inc. (“PTI”), which is a company that transports railroad employees to and from their places of work. PTI provides 24-hour shuttles and drivers, aiding railroad crews and train workers to get to their destinations and then back home after the workers have completed their work for the day. Smith began her employment at PTI as a driver and was promoted to an administrative role after two years.
A few months into her new role, Smith suspected that PTI was not paying her the full amount she was due for her work. After trying and failing to secure what she perceived to be the proper wages—particularly overtime wages—Smith resigned from PTI.
Shortly after resigning, Smith filed a lawsuit pursuant to the Fair Labor Standards Act (“FLSA”). The FLSA allows a worker to sue an employer on the employee’s own behalf and on behalf of “other employees similarly situated.” Smith filed the lawsuit both on behalf of herself individually and on behalf of similarly situated individuals.
Unlike other class action lawsuits under the Federal Rules of Civil Procedure, the FLSA requires group members to affirmatively opt into the collective action in order to participate. All members must give their “consent in writing to become such a party,” which must be filed in the court in which the action is brought. In addition to Smith, 118 people affirmatively opted into Smith’s collective action lawsuit by filing their written consent.
The FLSA includes a two- or three-year statute of limitations, and any party seeking to be included in the collective action must file his/her consent within that time period. In addition to filing the lawsuit, a plaintiff needs to file his/her consent within the applicable time period in order to be included in the collective action.
In this case, Smith did not file an additional written consent form indicating her desire to join her own collective action lawsuit. By the time this issue arose in the case, both the two-year and three-year statutes of limitations had already run. The district court held that because the statutes of limitations had run before Smith filed her consent, both her collective action and individual claims were untimely. The district court then dismissed the case in its entirety on that basis.
Smith appealed to the Seventh Circuit, contesting the district court’s refusal to allow her individual claims to move forward. The Seventh Circuit considered whether the district court erred by dismissing Smith’s individual claim when the collective action claim failed for lack of written consent.
More specifically, the question before the Seventh Circuit was whether the FLSA allows a plaintiff to file a “dual capacity” suit, “in which a plaintiff sues simultaneously as a group representative and as an individual.” For the following reasons, the Seventh Circuit determined that the answer is yes.
The Seventh Circuit first noted that the Federal Rules of Civil Procedure permit a party to join as many claims as it has against an opposing party in one action. The federal pleading rules, rather than the FLSA, determine whether multiple FLSA claims may be joined together in one action.
In making its decision, the district court concluded that the facts alleged in Smith’s complaint related only to the collective action, not her individual claims. The Seventh Circuit determined this was error in its review of the full record, noting that the first paragraph of the complaint stated that Smith was also proceeding in an individual capacity. Additional paragraphs in the complaint detail specific allegations related only to Smith and the complaint’s request for relief included “plaintiff Peggy Jo Smith, and all other similarly situated” employees.
The Seventh Circuit concluded that these allegations in the complaint, along with Smith’s answers to questions under oath about her individual claims, were enough to put the defendants on notice of Smith’s individual claims. The Court vacated the district court’s summary judgment order relating to Smith’s individual claims and remanded the case with instructions to allow Smith’s individual claims to proceed.
For more information
Contact John F. Fatino for more information about trucking and transportation matters at 515-288-6041 or email firstname.lastname@example.org. Bryn Hazelwonder, attorney, assisted in the preparation of these materials.