A Chicago federal judge has granted Facebook's request to allow a federal appeals panel to weigh in on whether the judge had properly allowed a group of 450 Facebook employees to move forward with a class action accusing the company of shorting them overtime pay, as Facebook asserts a large number of those worker pay disputes are barred by arbitration agreements.
In late March, U.S. District Judge Harry Leinenweber, of the U.S. District Court for the Northern District of Illinois, granted a request by named plaintiff Susie Bigger to expand her legal action against Facebook into a class action potentially involving hundreds of others who worked for Facebook. About a week later, Facebook countered by asking for appellate review of Leinenweber's decision to include 252 of those members.
Bigger started working for Facebook in 2013 in Chicago as an account manager, a position that was designated as being exempt from overtime. Several months later, her job was merged into a new position called a client solutions manager. Bigger earned more than $100,000 per year, of which 75 percent was base salary and 25 percent was commission. She said she usually worked 60 hours per week. Some client solutions managers (CSMs), such as Bigger, were classified as exempt from overtime pay, according to the suit.
Bigger alleged Facebook expects higher level CSMs, such as herself, to work more independently, although all CSMs have the same duties, regardless of their level. Bigger alleged Facebook, by designating her and other similarly situated CSMs as ineligible for overtime, violated the U.S. Fair Labor Standards Act and Illinois Minimum Wage Law.
Facebook argued Bigger did not qualify for overtime because the law allows an exception for high-income workers, such as Bigger, who handle administrative duties with considerable autonomy. However, Leinenweber found it was not clear Bigger enjoyed as significant a level of workplace independence as Facebook asserted.
Leinenweber also allowed 450 CSMs employed in the past three years to join the class, despite Facebook's objection that 252 of them signed agreements to waive class actions and to individually arbitrate any claims over wages.
Leinenweber said Facebook's objection was premature, because Facebook wants him to enforce the arbitration contracts, but he does not yet have jurisdiction.
“The potential opt-in plaintiffs allegedly subject to arbitration agreements have not yet joined this action, and the Court therefore has no ability to determine whether any potential arbitration agreement are enforceable against them," Leinenweber observed.
Leinenweber said he will decide whether to exclude the 252 CSMs after these CSMs are part of the case and discovery is finished, at which point he will be better able to examine the arbitration agreements.
Facebook then asked Leinenweber to refrain from ordering the class members be notified of the suit, and in the meantime, let the company seek an opinion on the issue from the U.S. Court of Appeals for the 7th Circuit.
Facebook is maintaining such notice to the class would exceed Leinenweber's authority, in light of the Fair Labor Standards Act and the Federal Arbitration Act, as well as the U.S. Supreme Court's conclusion in Hoffman-LaRoche Inc. v. Sperling in 1989.
In Facebook's view, there is no doubt arbitration agreements are enforceable at this stage of proceedings. The company pointed to another U.S. Supreme Court ruling, Epic Systems Corp. v. Lewis (2018), which Facebook said backs up its position. The 5th Circuit Court of Appeals drew from this ruling in February to hold a district judge cannot issue notice to employees who are clearly bound to arbitration agreements, according to Facebook.
Facebook further claimed the 252 employees, if notified, will be "misled" into joining the action, because "all of the evidence shows they are precluded from participating."
Bigger's lawyers responded on April 8, contending Facebook’s request was premature and will waste legal resources.
On April 9, however, Leinenweber overrode Bigger, allowing the matter to go before the U.S. Court of Appeals for the Seventh Circuit. The case is on hold until the outcome of the appeal. The judge set a status hearing for Aug. 28.
Bigger unsuccessfully argued the appeal would be out of place at this point in the case.
"Federal litigants normally must wait for a final judgment before they can bring a matter to the court of appeals. Interlocutory appeals are highly disfavored narrow exceptions to the final judgment rule and are limited only to 'exceptional cases' in which an appellate decision 'may obviate the need for protracted and expensive litigation and,accordingly, should not be used indiscriminately for ordinary litigation,'" said Bigger, citing a 1985 ruling from the U.S. District Court for Eastern Wisconsin.
Bigger went on to say case law supports the position an order conditionally certifying a class action, which involves the FLSA, should not be subject to interlocutory review. Facebook's proper course, Bigger asserted, was to wait until discovery is done and a fuller record is in place, then file a motion to remove the 252 CSMs.
An interlocutory appeal will also bog down the case, Bigger asserted.
"An immediate appeal is certain to delay the proceeding for at least several months, causing this litigation to become more protracted and expensive," Bigger said.
In particular, the plaintiff and the class members who did not sign arbitration agreements, would not be affected by the outcome of the appeal, but would suffer delay in resolving their claims, according to Bigger.
Bigger is represented by the Chicago firm of Stephan Zouras LLP.
Facebook is defended by the Chicago and San Diego offices of the Philadelphia-based firm Cozen O'Connor.