7th Circuit 'Likes' curbs on notice to employees bound to arbitration

Employers that face collective actions under the Fair Labor Standards Act (FLSA) often feel pinched. Pursuing a strong defense on the merits (or even attempting to reach an early settlement) may take a backseat to the employees' counsel's attempts to increase pressure on the employer through the process of notifying potential class members of their right to "opt in" to the litigation. The competing interests become even more complex if some of the employees have signed agreements requiring them to arbitrate any claims against the employer.

A recent decision from the 7th Circuit (which covers Illinois, Indiana, and Wisconsin) provides some needed guidance.

Timeline

Social media giant Facebook generates revenue by selling advertisements on its platforms. In her job as a client solutions manager (CSM), Susie Bigger is part of the company's sales team. Facebook deems certain levels of CSMs (including Bigger) exempt from overtime pay.

Bigger claimed that she worked more than 40 hours a week and should have (but didn't) receive overtime pay. So she filed suit against Facebook in federal court in Chicago on behalf of herself and all other similarly situated employees, alleging the company was wrong to treat them as exempt and violated the FLSA by refusing to pay them overtime.

As often happens in FLSA collective actions, Bigger asked the court to authorize notice to all members of the putative collective action, which was defined as all CSMs in specific subcategories who work for Facebook nationwide. Facebook did two things in response: