What? I Can’t Talk to My Own Employees? A Cautionary Class Action Tale

by Adam Shafran

Class action wage and hour and other similar employment class action lawsuits are more prevalent than ever, particularly in Massachusetts, which has some of the strongest pro-employee laws in the country. A decision from the Massachusetts Business Litigation Session demonstrates that employers faced with a class action lawsuit must be careful how and when they communicate with their employees.

In this case, a restaurant owner met personally with current and former employees to try to resolve unpaid wage claims and provided each employee with a disclosure letter about the pending class action lawsuit. When the plaintiff’s attorney learned about this, he filed a motion to prohibit the owner from engaging in such communications. The Massachusetts Superior Court agreed, ruling that a restaurant chain could be prohibited from communicating with its current and former employees about resolving unpaid wage claims against the company while a class action lawsuit is pending.

Critically, the judge found serious problems with the method, manner and content of the communication. First, the judge determined the disclosure letter provided to each employee was disingenuous because it stated the plaintiff was “not likely to win at trial.” Second, the judge found the disclosure letter contained release language that was substantially overbroad inasmuch as any employee who signed the letter would release the restaurant from not only wage and hour claims, but from any and all claims of any nature the employee had or may have had. Finally, the judge determined it was inappropriate for the restaurant owner to present the disclosure letter in person to each employee because employees may have felt pressured to sign the letter on the spot so as not to jeopardize their employment.

So what lessons can be learned? If your company faces a class action employment lawsuit, any proposed communications with employees to resolve claims should likely first be presented to the court to obtain the judge’s approval. To the extent any such communication contains a release, the release should be appropriately tailored to the dispute in question. For example, if the employer is being sued for a tip violation, the release should not also release discrimination claims. Finally, all communications regarding an existing class action lawsuit should be sent to employees via certified mail unless there are compelling reasons not to do so.

Of course, the first step every employer should take is to have their employment policies and practices reviewed so that there is no class action exposure, but in the event a class action arises, Rudolph Friedmann LLP can ensure the company is properly communicating with its employees.