PHILADELPHIA – A federal appellate court has concurred with a lower court that out-of-state class action plaintiffs are not able to connect their Fair Labor Standards Act claims against Federal Express to any of the company’s contacts with Pennsylvania.
U.S. Court of Appeals for the Third Circuit judges L. Felipe Restrepo, Paul B. Matey and Anthony J. Scirica ruled on July 26 that non-Pennsylvania-based plaintiffs in Christa Fischer’s class action litigation against Federal Express Corp. and FedEx Ground Package System were correctly disallowed from participating in the suit.
Scirica authored the Court’s opinion.
“Fischer, a Pennsylvania resident who worked for nearly 10 years as a security specialist for appellees Federal Express Corp. and FedEx Ground Package System, brought this collective action under Section 216(b) of the Fair Labor Standards Act in the U.S. District Court for the Eastern District of Pennsylvania [in October 2019]. Fischer alleges FedEx misclassified her and other FedEx security specialists as exempt from the FLSA’s overtime rule and underpaid them,” Scirica said.
“Two out-of-state former FedEx employees, Andre Saunders from Maryland, and Andrew Rakowsky from New York, submitted notices of consent, seeking to join Fischer’s collective action [in July 2020]. Saunders and Rakowsky both worked for FedEx in their home states but, other than FedEx’s allegedly uniform nationwide employment practices, have no connection to Pennsylvania related to their claims. The District Court ultimately did not allow these two opt-in plaintiffs to join the suit, reasoning that, as would be true for a state court under Bristol-Myers Squibb Co. v. Superior Court of California, the District Court lacked specific personal jurisdiction over FedEx with respect to the out-of-state plaintiffs’ claims.”
The District Court explained that because no federal statute authorizes nationwide service of process for opt-in plaintiffs in FLSA collective actions, Federal Rule of Civil Procedure 4(k)(1)(A) mandates that a federal court follow the same personal jurisdiction rules as would apply to a state court, including the requirement clarified in Bristol-Myers that all claims “must arise out of or relate to the defendants’ minimum contacts with the forum state.”
This led the plaintiffs to appeal to the Third Circuit, which granted a petition for interlocutory appeal to resolve the matter of whether or not all plaintiffs must establish specific personal jurisdiction over a corporate defendant, in a federal court action invoking the Fair Labor Standards Act, where a court lacks general personal jurisdiction over the defendant.
Per precedential decisions, the Sixth and Eighth Circuits found that yes, FLSA opt-in plaintiffs’ claims must “arise out of or relate to” the defendant’s minimum contacts with the forum state.
However, the First Circuit disagreed, ruling that though initial plaintiffs’ claims must connect to the defendant’s minimum contacts with the forum state – the test of the constitutional limit under the Fourteenth Amendment – opt-in plaintiffs’ claims need only arise out of or relate to a defendant’s minimum contacts with the entire nation – the test of the constitutional limit under the Fifth Amendment.
In the end, the Third Circuit judges joined their colleagues in the Sixth and Eighth Circuits, finding that FLSA actions must be handled uniformly through both state and federal courts, on the issue of plaintiff contacts to a corporate defendant.
“We join the Sixth and Eighth Circuits and hold that, where the basis of personal jurisdiction in an FLSA collective action in a federal court is specific personal jurisdiction established by serving process according to Federal Rule of Civil Procedure 4(k)(1)(A), every plaintiff who seeks to opt in to the suit must demonstrate his or her claim arises out of or relates to the defendant’s minimum contacts with the forum state,” Scirica stated.
“In this way, the specific personal jurisdiction analysis for an FLSA collective action in federal court operates the same as it would for an FLSA collective action, or any other traditional in personam suit, in state court. Accordingly, we will affirm the District Court’s judgment because the out-of-state opt-in plaintiffs here cannot demonstrate their claims arise out of or relate to FedEx’s contacts with Pennsylvania.”
U.S. Court of Appeals for the Third Circuit case 21-1683
U.S. District Court for the Eastern District of Pennsylvania case 5:19-cv-04924
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com