Sixth Circuit Limits FLSA Collective Actions
By Robert Turner
August 20, 2021
On August 17, 2021, the Sixth Circuit Court of Appeals handed down a decision in Canaday v. The Anthem Companies, Inc. No. 20-5947 holding that every plaintiff in a Fair Labor Standards Act (“FLSA”) collective action must establish personal jurisdiction over the defendant. This decision provides guidance by definitively stating that the United States Supreme Court’s decision in Bristol-Myers Squibb Co. v. Super Court applies to FLSA collection actions.
At the heart of this decision is that it affirmed the Western District of Tennessee’s decision granting Anthem Companies, Inc.’s motion to exclude workers outside of the state of Tennessee. By way of background, the plaintiffs in Anthem are review nurses that worked in Tennessee and brought a lawsuit in Jackson, Tennessee, seeking to represent a nationwide class of review nurses. Anthem Companies, Inc. is an Indiana corporation that employs review nurses in Tennessee and several other states. Some review nurses who worked outside Tennessee “opted-in” to join the Anthem lawsuit, and Anthem Companies, Inc. moved for their dismissal as they never worked in Tennessee. The Western District of Tennessee agreed, and the Sixth Circuit has upheld, that these workers should be dismissed from the lawsuit.
The Sixth Circuit reasoned that those out-of-state review nurses should be dismissed from Anthem because they were not joining that lawsuit due to Anthem Companies, Inc.’s conduct in Tennessee. They did not live in Tennessee, they did not work for Anthem Companies, Inc. in Tennessee, Anthem Companies, Inc. did not pay non-Tennessee residents in or from Tennessee, Anthem Companies, Inc.’s alleged improper payment of non-Tennessee residents did not take place in Tennessee, and finally, Anthem Companies, Inc.’s principal place of business is in Indiana.
This decision does not defeat FLSA collective actions, but it does limit the ability of an employee to bring this type of lawsuit. It assists employers fighting against FLSA collective actions by creating a built-in defense to limit the scope of a class for lawsuits filed outside of an employer’s principal place of business or place of incorporation. This decision ultimately limited the scope of the Anthem lawsuit to just the state of Tennessee rather than all states in which Anthem Companies, Inc. does business. Thus, this decision limited the exposure of many employers to FLSA nationwide litigation.
On the flip side, employees now have limited options for bringing these types of lawsuits. While it does not entirely defeat an employee’s ability to file a nationwide lawsuit, they must now be sure to bring that lawsuit in a proper forum. Gone are the days where an employee can simply file a lawsuit in their own backyard and have the ability to represent a nationwide class of individuals without meeting certain criteria first.
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