Out-of-state workers must navigate a lopsided rift in the circuit courts to figure out whether they can take part in mass actions against their employer.

The circuit split has favored corporations that operate across the country and aim to limit the size of wage-and-hour collective actions formed against them. It has also determined where workers face legal hurdles if they want to advocate for better pay under the Fair Labor Standards Act but live states away from their employer’s headquarters.

The divide is centered on the US Supreme Court’s 2017 decision Bristol-Meyers Squibb Co. v. Superior Court of California, which concluded that the 14th Amendment bars mass class actions that involve out-of-state plaintiffs. Under this precedent, workers can only form mass actions in areas where their employer is either domiciled or headquartered.

The US Court of Appeals for the Second Circuit widened the split to 6-1 in its May 4 decision in Provencher v. Bimbo Foods Bakeries Distrib. Judge Gerard E. Lynch found that there was no evidence justifying how a Vermont federal court could exercise jurisdiction over New York- and Connecticut-based Bimbo distributors.

“Because each FLSA plaintiff’s personal interests remain front and center, the jurisdictional inquiry revolves around individual claims,” Lynch said.

The Second Circuit joined the Third, Sixth, Seventh, Eighth, and Ninth circuits in determining that workers must establish personal jurisdiction—having claims that tie their injuries to the case’s forum state—in order to participate in an FLSA collective. Together, the sister circuits followed the high court’s interpretation of the 14th Amendment in Bristol-Meyers Squibb.

But the First Circuit ruled in 2022 that the 14th Amendment doesn’t require workers to establish personal jurisdiction to opt into a collective action. Federal mass actions are governed by the Fifth Amendment, the court said, which doesn’t “bar an out-of-state plaintiff from suing to enforce their rights under a federal statute” if the defendant is based in the US.

Alex Karasik, a partner at Duane Morris LLP, said the Bristol-Meyers Squibb split is “one of the major issues to watch in terms of Supreme Court activity over the next few years.” Karasik is a member of the firm’s class action defense team and said the Bristol-Meyers Squibb decision comes up often in his employment practice.

“This is an issue that contains significant consequences economically for both the plaintiff’s class action bar as well as employers across America,” Karasik said. [...]

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