Stransky v. HealthOne: Defendant’s Pre-Notice Communications With Class Members Held Coercive, Misleading
While the attack on class and other representative actions continues under the cover of advancing “the liberal policy favoring arbitration,” courts continue to articulate a sensible class action jurisprudence in response to mass wrongs where no particular victim has a rational incentive to seek an individual remedy. For instance, a Colorado federal court recently took up whether a defendant employer in a conditionally-certified FLSA action should be permitted to meet with prospective class members to discuss the pending allegations of unpaid wages during the employees’ class opt-in period. See Stransky v. HealthOne, No. 11-2888 (D. Colo. Mar. 7, 2013) (order granting motion for injunctive relief). The court held that the employer’s conduct was impermissible, and found this behavior to be “misleading, confusing, coercive and improper.” Order at 14.
In assessing whether the communications with the prospective class members were “misleading, confusing, or coercive,” the court gave primary emphasis to that portion of the defendant’s scripted message read to the employees pertaining to attorney’s fees: “If the court ultimately rules in plaintiffs’ favor, the attorneys at Bachus and Schanker will be entitled to fees for representing you and other members of the conditional class, which in this case will likely be deducted from any final award, should there be one.” Order at 11-12. On that basis, the court concluded that “Defendant’s statement that attorneys’ fees will likely be deducted from the final award unequivocally misrepresents the law and misleads Opt-in Plaintiffs into believing that if they prevail, their award will be significantly reduced to pay attorneys’ fees.” Order at 12.
The unusually potent, multi-part remedy for plaintiffs included: (1) a prohibition on the employer’s communications with prospective class members “about this case and the claims or defenses in this action until after the opt-in period has closed”; (2) a corrective notice, to be incorporated into the notice of conditional certification; and (3) the opportunity for the plaintiff to recover attorneys’ fees incurred in connection with moving against the prohibited communications. Order at 15-18.