Recent Federal Court Decision Favors Class Action Defendants

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A landmark fair labor standards act decision establishes due process review for employers.

October 26, 2020
Amber Karns & Dan Pipitone - Construction Executive

The commercial construction contracting and subcontracting industry in general is unique under the law for industry professionals, as they’re typically limited to wage and hour litigation under provisions of the Fair Labor Standards Act.

The majority of FLSA cases seek class action status or collective classification, while other FLSA litigation is initiated by individuals seeking damages. For the former, past and current employees can opt into class action litigation and seek collective damages against a construction company. The looming financial burden of class action or collective litigation against construction companies consume time, money and resources to the extent it’s often advisable for Defendants to negotiate an unfair settlement.

Yet, thanks to a recent federal court decision on March 27, 2020, the legal maneuvering behind unreasonable Plaintiff demands may soon be counter-balanced by the class action Defendants’ right to due process review. A recent legal opinion in a recent FLSA case has potentially wide-ranging implications for Defendant employers mired in future class action litigation. Moreover, as the FLSA applies to all employers, this decision potentially applies to all ownership groups representing the commercial construction industry, extending to partners, contractors and subcontractors.

Reprinted courtesy of Amber Karns & Dan Pipitone, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.

Mr. Pipitone may be contacted at dpipitone@munsch.com
Ms. Karns may be contacted at akarns@munsch.com



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