A recent federal appellate ruling is likely a relief for some employers on the West Coast, and perhaps beyond. Although the 9th Circuit Court of Appeals’ opinion is only binding in several western states, it nevertheless represents the latest chapter in a growing trend among federal appellate courts. That trend suggests that, when employees undertake a Fair Labor Standards Act collective action lawsuit, the trial court must determine personal jurisdiction on a claim-by-claim basis, where each opt-in plaintiff must have sufficient ties to the employer’s business in that state. If you have questions about these types of lawsuits, it is advisable to consult with an experienced Atlanta collective action lawyer regarding your specific situation.
The plaintiffs in the 9th Circuit case were a group of current and former tipped employees of the restaurant chain Cracker Barrel, who sued their employer for violating the FLSA. Specifically, the servers alleged that the restaurant’s use of tip credits and its payment practices for tipped workers did not comply with the law’s requirements.
The employees sued in federal court in Arizona. In their court papers, the employees asked the court to certify a collective consisting of “all servers who worked for Cracker Barrel in states where it attempts to take a tip credit… over the last three years.”