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Class Action Lawsuits in Wage Litigation Explained

In a class action, one or more individuals sue on behalf of other people with similar claims. Together, the people included in the class action are called a class or class members. One court resolves the lawsuit for all class members, except for those who exclude themselves from a settlement.

When an individual brings a class action lawsuit in the context of wage litigation, the claims arise under state law (as opposed to federal law). The class must be so large (and include usually more than 40 of the same type of employees) as to make individual lawsuits impractical. There must be legal or factual claims common among all the class members.

What Does a Class Action Require?

A class action only requires one representative to be filed. A class representative is an individual who has been harmed, believes others have experienced similar monetary injuries from the same action, possesses a desire for that action to end, and wishes to be remunerated for any monetary damages incurred by the wrongful actions. The class representative will help represent the suit as the “lead plaintiff” and they, along with the attorneys, represent the interests of the class. The claims or defenses of the other plaintiffs must be typical of the lead plaintiff. The common issues between the class and the defendants must predominate the proceedings.

If a class action lawsuit is appropriate, the court will certify the class and a claims (also called settlement) administrator will be brought in as a neutral third-party to handle the claims administration process in compliance with the court-approved settlement agreement. Notice will be sent to everyone who may qualify as a plaintiff.

If a person does not want to be bound by the outcome of the action, that person can choose to “opt-out” of the class. Unless you exclude yourself, you are automatically part of the settlement. If you do nothing and do not fill out a claim form, you will not get a payment from the settlement and you will give up the right to sue, continue to sue, or be part of another lawsuit against the defendant related to the legal claims resolved by the settlement.

How Are Payments Handled?

The only way to receive a payment from the settlement is by submitting a timely and properly completed claim form that obtains approval from the claims administrator. The claim form must be submitted no later than the date specified. If your claim is approved by the claims administrator, you will give up the right to sue the defendant in a separate lawsuit about the legal claims resolved in the settlement. The claims administrator will distribute the net class funds to all class members.

If a court finds that the lead plaintiff’s rights were violated, then the entire class of plaintiffs will be entitled to damages. Oftentimes plaintiffs and defendant agree to a settlement to avoid the costs and risks of a trial and because the lead plaintiff and their attorneys think the settlement is best for all settlement class members. Once the settlement is court approved, the class members can receive payments from the settlement.

If the court finds that the plaintiff’s rights were not violated, the entire class of plaintiffs will be bound by that judgment and will not be allowed to pursue individual claims regarding the same claims that were addressed in the class action lawsuit.

An example of a class action is the following:

One hundred restaurant servers are not paid the full Florida minimum wage during a 4-year time period. One of the restaurant servers decides to become lead plaintiff and file a class action lawsuit to recover wages owed to all of the restaurant servers during the past four years. The court eventually certifies the class action and notice is sent to all of the restaurant servers from the past four years to let them know that they are part of the class. Unless a restaurant server “opts-out” of the class, they will be included as part of the class and receive their share of the settlement.

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