Zamboni v. Pepe West 48th St.: Federal Court Assails Defendant Employer for Improper Class Member Communications

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As the U.S. Supreme Court continues to take aim at class actions, federal and state trial courts are policing abuses that illuminate why employers would prefer that workplace protections not be broadly enforced by class and representative actions. For instance, a federal judge in the influential Southern District of New York recently found that an FLSA defendant engaged in deceptive and intimidating communications intended to dissuade class members from opting into a class action involving the non-payment of overtime. See Zamboni v. Pepe West 48th Street LLC, No 12-3157 (S.D.N.Y. Mar. 12, 2013) (order re: class member communications).

The Zamboni plaintiffs alleged that employees eligible to opt into the conditionally-certified FLSA class were summoned to a meeting presided over by the defendant employer, where they were instructed to sign, without reading, a document disavowing overtime work. One of the employees present at the meeting testified that he was handed a document and told to “read it quickly and sign it even quicker.” Order at 4. After initially being rebuffed when he asked to see a copy of the signed document, the employee discovered that it included the statement, “I do not believe that I am owed any monies for unpaid wages . . . or for any other reasons.” Id. Additionally, the employee was told that he could not opt into the FLSA class if he signed the document, even though the document had no actual bearing on employees’ ability to be members of the FLSA class. Id. Judge James C. Francis IV concluded that “it was inherently coercive for the defendants to solicit from each employee a statement that he does not have a claim for unpaid wages.” Order at 9.

Echoing the analysis around unconscionable contracts, Judge Francis found that “an employee who signs such a statement . . . may well believe that . . . he is precluded from opting in to this litigation. Furthermore, an employee could well sign such a statement without full recognition of the extent of his rights and potential claims under the FLSA.” Order at 9. As a remedy, Judge Francis ordered that a notice be disseminated informing the employees that they had not in fact waived FLSA rights and that the lawsuit’s opt-in period be extended. Order at 10.