Facilitating Wage Theft: How Courts Use Procedural Rules to Undermine Substantive Rights of Low-Wage Workers

Abstract

In race and sex discrimination class actions, if a defendant employer makes a Rule 68 offer of judgment to the named plaintiffs, courts routinely refuse to dismiss the class claims. In stark contrast, in collective actions for failure to pay lawful wages, if a defendant employer makes a Rule 68 offer of judgment, courts will often dismiss the entire collective action as having been mooted by the named plaintiffs’ recovery. The outcome of such a dichotomy is that low-wage workers are increasingly unable to challenge unlawful wage violations successfully because the aggregation mechanism is too easily defeated. Without an ability to group wage and hour claims in an aggregate action, multitudes of wage violations will go unheard because individual wage claims do not attract the attention of plaintiff’s attorneys.

This failure to protect an underprivileged group of low-wage workers the laws are explicitly trying to protect is striking and effectively subverts the statutory protections in place since the 1930s to combat wage theft by employers. By most accounts, the civil rights movement of the 1960s was successful in addressing discriminatory practices through not only substantive, statutory rights, but also procedural mechanisms by which those rights could be easily and appropriately vindicated through access to the courts.

In contrast, the right of low-wage workers to receive what they lawfully earn has a long-standing statutory remedy but an antiquated procedural mechanism. That procedural mechanism both diminishes their ability to fully vindicate their rights and is also now being cited as the structural difference that allows other procedural rules (i.e., Rule 68) to deny standing in federal court at the outset.

This article examines this rising phenomenon by first outlining the pressing societal need for collective litigation to ensure that adequate and available legal remedies remain for under-represented groups, such as low-wage workers. It also compares the procedural mechanisms for bringing aggregate litigation, Rule 23 class actions and section 216(b) collective actions, and examines how Rule 68 has both intended and unintended consequences when used by defendants to battle collective actions. Lastly, the article identifies the inconsistencies apparent in the federal case law denying the applicability of Rule 68 in the class context but more often dismissing collective claims when Rule 68 offers are made against collective action plaintiffs