No employer welcomes the news that it’s just been served with a wage and hour class action. Many employers naturally desire to communicate with their employees to provide their perspective and to explain why employees may not want to participate in the class action.Before launching such employee communications, however, companies should always consult with legal counsel to review what can – and cannot – be said.
In Camp v. Alexander, a single employee brought a class action alleging unpaid overtime and other wage and hour violations against a dental practice, “Youthful Tooth,” that specializes in providing dental care to low income children. The company purportedly received several reports from employees who did not want to participate in the lawsuit.It then sent a letter to employees stating that:
- it believed the lawsuit was “motivated by greed and other improper factors;”
- plaintiff’s counsel was “seeking a very large sum of money by attempting to convince other employees to join the lawsuit;” and
- defending the case threatened to “jeopardize the on-going viability of the practice,” and the “final blow could result in the closure of this long running business.”
The letter did tell employees that if they wanted to support the plaintiff they were “free to so do” without retaliation, but it added “all employees who wish to seek some money out of this will be suing us.... Money may be awarded at some future point, assuming this dental practice is still in business. We are confident that this practice will not be able to survive such anevent.” The letter then stated employees were free not to participate in the case and encouraged them to complete and return a form declaring they wished to “opt out” of the class action.
Plaintiff’s counsel cried foul, and moved to stop all further communications about the case between the employer and its employees.The Court did not prohibit all future communications.However, in a well-reasoned decision, U.S. District Court Magistrate Judge Elizabeth LaPorte held that the employer’s letter went too far, specifically finding that it was one-sided, inflammatory and, if left unchecked, presented a realistic danger that it would “chill participation in the class action.”Therefore, the Court ruled that all “Opt Out” declarations received by the employer were invalid and further ordered the employer to send a curative letter to all employees informing them that any prior Opt Outs had been deemed invalid along with a neutral statement about employees’ rights to participate in the class action.Click here for the full text of the Court’s opinion.Here, the adage “an ounce of prevention is worth a pound of cure” proved almost literally true as the case reminds employers, again, that they should consult carefully with counsel before communicating with employees about class action issues.