Monday, June 15, 2009

Opt-in action and an opt-out class action distinguished

In pursuing a case, parties must consider both substantive and procedural aspects of it. More often than not, a case is dismissed due to technicalities meaning certain procedures are not followed or observed.

Technicalities would often get you no matter how well you laid arguments or presented your evidence. Parties must be very cautious when dealing with technicalities as they could break or make the case.

Fair Labor Standards Act (FLSA) opt-in action and an opt-out class action are procedural terms parties should be familiarized with.

The case of Haro v. City of Rosemead, clarified the difference between the two actions.

In this case, the California Court of Appeal noted that FLSA actions are collective actions where potential plaintiffs must opt-in in order to be a part of the action. It means that the individual plaintiffs must give their written consent to be a member of the class. On the other hand, potential plaintiffs must opt out if they do not desire to be a member of the class.

The appellate court also cleared that the difference between the opt-in versus the opt-out feature is critical. Other differences are the tolling of the statute of limitations, trial court’s involvement in the process of notifying potential additional plaintiffs, and the definitions of parties “similarly situated.”

Due to these differences, the court ruled that FLSA actions could not be maintained as class actions. This clarification would be beneficial to parties who would have similar issues as that of the Haro case.