Collective action against bakery is scaled back on jurisdictional grounds

This is a wage-and-hour claim in which the plaintiffs -- who distribute baked goods -- assert their employer denied proper overtime pay in violation of the Fair Labor Standards Act. The issue is whether the trial court had authority to force the employer to notify out-of-state bakery distributors of the potential collective action that plaintiffs want to pursue, which would allow the out-of-staters to opt-in to the case and therefore make it a larger and more lucrative collective action.

The case is Provenhcher v. Bimbo Foods, issued on May 4. While the district court said that Bimbo had to send the notices to distributers in New York and Connecticut, the Court of Appeals (Lynch, Lohier and Menashi) reverses in this rare interlocutory appeal, holding that the federal trial court does not have jurisdiction over out-of-state plaintiffs' FLSA claims against an out-of-state defendant, even where that defendant is properly before the court on similar claims advanced by in-state plaintiffs. Most circuits have already held as such, and the Second Circuit joins in these majority rulings.

The FLSA does not provide for nationwide service of process sufficient to confer personal jurisdiction over similar claims. The class action may only involve Vermont bakery distributors. The Supreme Court issued a ruling on this issue in Bristol Meyers Squibb v. Superior Court of California, 582 U.S. 255 (2017), though that case asserted a product liability claim against the drug company involving potential class plaintiffs from states other than California. The Supreme Court in that case said the California court lacked personal jurisdiction over the out-of-state plaintiffs' claims. 

In this case involving bakery drivers, the record does not show that Bimbo's Connecticut or New York distributors suffered FLSA violations arising from Bimbo's relationship with Vermont. The Bristol-Meyers holding is fatal to plaintiffs' argument that Bimbo's use of the same distribution protocol is similar all three states, and the fact that Bristol-Meyers concerned the Fourteenth Amendment and not the Fifth Amendment, asserted here, makes no difference. In sum, the Court of Appeals holds, "before conditionally certifying an FLSA collective action and authorizing notification of potential plaintiffs who may opt in, the district court must ensure personal jurisdiction over the defendant with regard to the claims of those to be notified." This ruling thus scales back the scope of the collective action.