Court Finds Employers May Communicate with FLSA Putative Collective Action Members Regarding Lawsuit, Unless It Is “Coercive, Misleading, or Improper.”

A common question for employers when defending an FLSA collective action is what, if anything, to say to their putative-plaintiff employees about the lawsuit.  To avoid any potential impropriety, employers often elect to say nothing.  However, the recent case of Kordie v. Ohio Living, Case No. 21-cv-3791 (S.D. Ohio, Jun. 9, 2022), provides a helpful roadmap for employers who want to take a more proactive communication strategy.

In Kordie, the court conditionally certified two classes under 29 U.S.C. § 216(b), and authorized notice and consent forms to be sent to the putative collective action members.  After the Order was issued but before the notice and consent forms were mailed, defendant Ohio Living sent the following letter to all its current employees who were putative collective action members:

Dear Fellow Ohio Living Employee,

Thank you for being a part of our team and for continuing to provide exceptional care and support to our residents — your hard work during these challenging times is appreciated beyond words! As we recover from the numerous COVID related challenges, I want to share a wage and hour issue which we have identified and quickly corrected.

 A former employee filed a complaint alleging that Ohio Living violated the Fair Labor Standards Act by alleging that we may not have included non-discretionary bonuses in an employee's regular rate of pay when calculating overtime.

 In the process of reviewing this allegation we have discovered that some pay may not have been included in the overtime calculation. As soon as this issue was discovered, it was fixed within our payroll system immediately. However, I want to make you aware that we are now in the process of looking back and making necessary corrections and monetary repayments to affected employees.

 If you are receiving this letter, you will soon receive a "Notice of Unpaid Overtime Wage Lawsuit" from Coffman Legal LLC, the attorneys for the former employee who filed the complaint. We are required by law to turn over your name to the law firm representing this former employee. Please know, there is no action you are required to take. However, we wanted to let you know about this lawsuit and upcoming notice before you hear about it from Plaintiff's counsel and advise you that any payroll errors that occurred were entirely unintentional and, in fact, escaped detection in our own internal payroll auditing procedures. Under no circumstances has Ohio Living ever intentionally underpaid any employee, and as soon as our calculations are finalized, any underpaid overtime due will be provided to you. If you choose to "opt-in" to the lawsuit, Ohio Living will not retaliate against you.

 If you have any questions about this letter, or about the Notice you will receive from Plaintiff's counsel, please feel free to contact me. Again, thank you for being part of the Ohio Living team!

Sincerely,

[s/Dana Ullom-Vucelich] Dana Ullom-Vucelich

Chief Human Resources Officer

The plaintiff argued this was an improper communication and asked the Court for various forms of relief, including a protective order that: “prohibits defendants and their counsel from communicating with putative collective members in any manner related to this lawsuit or their alleged ‘payroll error’ until the end of trial.”

The Court first noted that the plaintiff’s request for a protective order “seeks to curtail Ohio Living’s First Amendment right to correspond with potential collective members, a right that is not lost simply because collective certification has been granted and notice has been issued.”  The Court found that to restrict such speech, a plaintiff must show that it was “coercive, misleading, or improper” or encourages class members not to participate in the suit.

The Court held that the plaintiff failed to sustain her burden of proving the letter was coercive or encouraged putative members to refrain from joining the lawsuit.  However, the Court agreed with the plaintiff that the letter was misleading in that it:  (1) stated employees need take no action, when in fact employees needed to affirmatively opt-in if they wanted to join the lawsuit; and (2) indicated the Notice was from plaintiffs’ counsel, when in fact it was coming from the Court.  As a remedy, the Court ordered the parties to meet, confer and file a proposed corrective notice to address these two “non-egregious errors.” Otherwise, the Court found no issue with the letter.

A word of caution.  Ohio Living’s letter was sent to its employees before the Notice and Consent to Join Forms had been mailed.  The Court may have reached a different conclusion had the letter been sent to employees who had already opted in and, thus, were represented by plaintiff’s counsel.

The Takeaway

The Kordie decision provides employers with additional support and guidance for sending pre-notice communications to their employees in FLSA actions. However, such communications will not make sense in every case and should be carefully crafted and considered as part of an employer’s overall defense strategy.