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Equitable Tolling & The FLSA

Time is not on your side in FLSA cases. Unlike most class cases, where the statute of limitations is tolled for the class upon filing, in FLSA collective actions the clock continues to run against all potential class members until they opt into the case. For this reason, it is imperative that a court rule quickly to permit the Plaintiff to inform class members of their right to join the case to avoid claims being lost because individuals never learned of their tights.

Under the Fair Labor Standards Act (FLSA), an employee may recover up to three years of unpaid wages. The statute of limitations for such actions runs backwards from the date on which the employee files his consent to sue his employer with the court. For example, if an employee brings an action against his employer on August 27, 2012, his claim would look backwards for all unpaid wages between August 27, 2009 and the present (and ongoing if the violation continues). This works well when an individual brings a claim for himself against his employer. What happens, however, when the employer has not properly paid entire groups of employees?

The FLSA allows groups of employees to bring actions on behalf of all employees who were wrongfully underpaid. When employees band together and file a collective action under the FLSA, they must wait for the Court to conditionally certify the class prior to formally informing other potential class members of the lawsuit. The process of conditionally certifying the collective class can often take several months, as the parties conduct initial discovery, investigate class claims, file briefs with the court, and wait for the court to decide the motion. During this time, the vast majority of potential class members do not even know that the case has been filed and are not aware that their individual statutes of limitations are running. This seems to unfairly prejudice these prospective class members.

Courts have recognized that it is in the interest of justice to toll the statute of limitations for potential class members until after they have received formal notice of the lawsuit. Recently, inStansky v. Healthone of Denver, Inc., the court ordered that the statute of limitations should be equitably tolled from 90 days after the potential class members receive notice of the lawsuit.

The court discussed several cases from across the country in which equitable tolling was granted. This was largely based upon the amount of time that it took for the court to rule upon a plaintiff’s pending motion for conditional certification. The court held that the potential class members would be greatly prejudiced without such tolling, while the defendant would not be similarly prejudiced.

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