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Court greenlights nationwide wage lawsuits amid bid to limit their scope

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  • Workers from different states can join nationwide lawsuits brought under fed law, says 1st Circuit
  • Other federal appeals courts are split over the crucial question
  • Chamber of Commerce said large-scale class actions raise costs for consumers

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(Reuters) - A divided U.S. appeals court has ruled that workers from different states can join nationwide class-action lawsuits brought under federal wage law, amid a trend to limit nationwide FLSA challenges following a relevant Supreme Court decision.

The 1st U.S. Circuit Court of Appeals in a 2-1 ruling on Thursday said the federal Fair Labor Standards Act was designed to enable large-scale collective actions against companies operating in multiple states, and limiting who can join those lawsuits would undermine that purpose.

Attempts to limit the scope of nationwide FLSA lawsuits began after a 2017 U.S. Supreme Court ruling that said people who lived outside California could not join a product liability case filed in state court against Bristol-Myers Squibb Co.

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The 1st Circuit majority on Thursday said the Bristol-Myers decision only applied to cases brought in state courts, and not FLSA lawsuits filed in federal court.

Defense contractor Day & Zimmermann had been seeking to dismiss most of the more than 100 workers who opted into an overtime pay lawsuit filed against the company in Massachusetts.

The company was backed by the U.S. Chamber of Commerce, which said in an amicus brief last year that a ruling for the plaintiffs would make employment litigation more expensive and force companies to pass those costs on to customers.

The ruling clashes with decisions issued by the 6th and 8th Circuits on consecutive days last August. The 7th Circuit in a 2020 case said that only the named plaintiff had to establish jurisdiction.

Circuit Judge David Barron in dissent said the decision would have wide-ranging effects on cases brought under the FLSA and many other laws, but there was no reason for the 1st Circuit to decide the issue because Day & Zimmermann's case was in its early stages.

Day & Zimmermann did not immediately respond to a request for comment. Nor did the plaintiffs' lawyers at Josephson Dunlap.

The case is Waters v. Day & Zimmermann NPS Inc, 1st U.S. Circuit Court of Appeals, No. 20-1997.

For the plaintiffs: Richard Schreiber of Josephson Dunlap

For Day & Zimmermann: David Salmons of Morgan Lewis & Bockius

Read more:

Cases to Watch: Bid to limit nationwide FLSA class actions is reaching appeals courts

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Dan Wiessner (@danwiessner) reports on labor and employment and immigration law, including litigation and policy making. He can be reached at daniel.wiessner@thomsonreuters.com.

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