Littler Lightbulb ' March Employment Appellate Roundup

• Jurisdiction: United States,Federal
• Law Firm: Littler Mendelson
• Subject Matter: Employment and HR, Consumer Protection, Intellectual Property, Real Estate and Construction, Contract of Employment, Discrimination, Disability & Sexual Harassment, Employee Benefits & Compensation, Employee Rights/ Labour Relations, Product Liability & Safety, Trade Secrets, Construction & Planning
• Author: Mr Mark Flores
• Published date: 13 April 2023

This Littler Lightbulb highlights some of the more significant employment and labor law developments at the U.S. Supreme Court and federal courts of appeal over the last month.

At the Supreme Court

• Out-of-State Plaintiffs in FLSA Collective Actions. On March 6, 2023, the U.S. Supreme Court denied a petition to review Fischer v. Federal Express Corp., 42 F.4th 366 (2022), an FLSA collective action in which the Third Circuit upheld the district court's refusal to allow individuals who worked for the defendant outside the forum state to opt in to the lawsuit. In so doing, the Court declined to settle the circuit split on whether its decision in Bristol-Myers Squibb Co. v. Superior Court of Cal., 137 S. Ct. 1773 (2017), a product liability action in which the Court limited the scope of federal court jurisdiction over out-of-state claims, applies to collective actions under the FLSA.

In Fischer, the Third Circuit joined the Sixth and Eighth Circuits holding that Bristol-Myers applies to FLSA collective actions and that, accordingly, federal courts may not exercise jurisdiction over claims by out-of-state opt-in plaintiffs in FLSA collective actions. In contrast, a divided First Circuit held in Waters v. Day & Zimmerman NPS, Inc., 23 F.4th 84, 97 (1st Cir. 2022) that out-of-state plaintiffs may join an FLSA collective action finding that the FLSA was designed to enable large-scale collective actions against companies operating in multiple states. Specifically, the Court stated that "[i]nterpreting the FLSA to bar collective actions by out-of-state employees would frustrate a collective action's two key purposes: '(1) enforcement (by preventing violations and letting employees pool resources when seeking relief); and (2) efficiency (by resolving common issues in a single action).'"

In the Federal Appellate Courts

• Deductions from PTO Do Not Defeat FLSA Exempt Classification. In Higgins v Bayada Home Health Care Inc., No. 21-3286 (3d Cir. Mar. 15, 2023), a case of first impression in the Third Circuit, the court held that paid time off (PTO) is not part of employees' salary under the Fair Labor Standards Act (FLSA), and therefore deductions from PTO do not defeat employees' classification as salaried exempt employees under the FLSA. The employees in the case were registered nurses providing home healthcare services to patients in their homes. They were paid on a salary basis and awarded additional compensation when they exceeded weekly productivity minimums. If they failed to meet their productivity minimums the employer deducted from their PTO.

The plaintiffs filed a collective action under the FLSA claiming the PTO deductions were inconsistent with their classification as salaried exempt employees under the FLSA. The district court granted summary judgment to the employer and the Third Circuit affirmed. The court stated that although neither the FLSA nor its regulations define the term salary, the regulations require that "an exempt employee...receive the full salary for any week in which the employee performs any work without...