2020 Chipotle Case Could Have Fundamentally Changed How FLSA Cases are Litigated

One of the most significant cases in class and collective litigation in 2020 was Chipotle Mexican Grill v. Scott. 

Details on the Case: Chipotle Mexican Grill v. Scott

Case No.: 17-2208, 2nd Circuit

The U.S. Supreme Court weighed in on a critical issue connected to collective action under the FLSA in 2020. The court was asked to consider what it means for a putative class of workers to be “similarly situated” for purposes of being considered a collective under FLSA. 

Who is “Similarly Situated” for FLSA Collective Actions? 

During Chipotle Mexican Grill v. Scott, parties involved claimed there was an “intractable conflict” among the federal courts on the issue of determining who is “similarly situated” for FLSA collective actions. This question and the resulting litigation could have had ground-shifting implications. However, after the parties involved signaled their intent to settle on December 31, 2020, the court did not take up the case even though it could have fundamentally reshaped how FLSA cases, in general, are handled and litigated. Even though this particular case wasn’t litigated, 2020 saw a steady shift in the courts on the issue of defining “similarly situated” for FLSA collective actions. 

The Plaintiffs: Chipotle Mexican Grill v. Scott

In Chipotle Mexican Grill v. Scott, seven named plaintiffs represented six putative classes (under Federal Rule of Civil Proc. 23(b)(3)). The plaintiffs also filed suit on their own behalf and on behalf of 516 additional individuals that opted in on a conditionally certified collective action under the FLSA (Fair Labor Standards Act). The plaintiffs alleged that the company misclassified workers as exempt in violation of state labor laws. Collective plaintiffs alleged that the company misclassified them as exempt in violation of the FLSA. 

The “Similarly Situated” Issue: Chipotle Mexican Grill v. Scott

After the district court denied class certification, the Second Circuit affirmed the order denying class certification based on a lack of predominance and superiority. According to the record, the court could not find that the district court’s conclusion was outside the range of permissible decisions. However, the court did vacate the district’s court order to decertify the collective action based on a legal error. The Second Circuit Court found that the district court improperly analogized the standard for maintaining a collective action (under the FLSA to Rule 23 procedure). As the district court’s decision was based on the inaccurate analogy when they determined that the named plaintiffs and opt-in plaintiffs were not “similarly situated,” the 2nd Circuit Court vacated the order. The improper application of the “sliding scale” analogy to Rule 23 in this case improperly conflated section 216(b) with Rule 23 and the latter rule’s stricter requirements.

If you have questions about California labor law violations or how employment law protects you against labor law violations, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in various law firm offices in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.