Class Action Plaintiffs Can’t Mix Federal and State Claims

Second Quarter 2010Newsletters California Update Employment Law

A federal judge in Los Angeles has denied an attempt by class action lawyers to combine an opt-in "collective action" under the federal Fair Labor Standards Act with an opt-out "class action" under state wage and hour law. The controversy stems from a large retailer's practice of deducting credit card debt from final paychecks. The judge allowed the federal case to proceed, which alleged that the deductions caused compensation to fall below minimum wage. The judge, however, denied class certification of the state law case, which alleged that such deductions were unlawful. The judge ruled that to combine an opt-in case with an opt-out case would create confusion and would undermine the "superiority" of the state law class action. The case is Ward v. Costco, U.S. District Court for the Central District of California (March 10, 2010).