Before ALBERT LEE STEPHENS, GOODRICH, and McLAUGHLIN, Circuit Judges.
This case presents an interesting question growing out of the language used in § 16(b) of the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 216(b). Certain named plaintiffs brought an action against the defendant to recover unpaid overtime compensation, liquidated damages and counsel fees, as provided in the statute. They said they were members of a class of about five hundred employees (which class was clarified by amendment) and that they sued on behalf of themselves and as representatives of other employees and former employees similarly situated. They alleged a common question of law, a common question of fact, and sought common relief but by separate judgments. The defendant's answer on the merits does not concern us here, for the point before us in this appeal comes through a motion which it made for judgment on the pleadings against the plaintiff as representative of any persons in the described class who had not of record intervened as parties plaintiff. This motion, after hearing, was granted by the court. D.C.W.D.Pa.1945, 4 F.R.D. 350. The plaintiffs appeal.
The problem producing language is the following from § 16: "Action to recover such liability may be maintained * * * by any one or more employees for * * * themselves and other employees similarly situated * * *."
"Other employees similarly situated" are manifestly the words whose legal effect must be determined. Do they create what we already have under the federal rules as a true class suit, a hybrid class suit, or a spurious class suit? We have struggled with these distinctions on previous occasions. See Pennsylvania Co. etc. v. Deckert, 3 Cir., 1941, 123 F.2d 979. It may be admitted that the terminology shocks the aesthetic sense and the succession of adjectives before the noun shows the poverty of imagination in choice of terms characteristic of the legal profession. But back of the unedifying nomenclature there is substance. If our categories are carefully chosen it makes a great difference into which one our facts fall. It matters here.
With hybrid class suits we are not concerned. Such a suit has to do with individual plaintiffs and a claim to a common fund. See the discussion in the Deckert case, supra.
The District Court thought the instant suit was a spurious class action.*fn1 Moore (2 Federal Practice 2241) describes a spurious class suit as a "permissive joinder device. The presence of numerous persons interested in a common question of law or fact warrants its use by persons desiring to clean up a litigious situation." Moore gives as an instance a fire negligently started by a railroad which inflicts widespread damage upon many property owners. Their only common interest is to get money from the tortfeasor. The latter's obligation certainly is a separate matter as to each plaintiff. But if the lawsuit does not grow too bulky, there may be economy of time and effort hearing all the claims in the same proceeding.
A true class action is described in the Restatement, Judgments, § 86(b) as "an illustration of a situation where it is not feasible for all persons whose interests may be affected by an action to be made parties to it. It was invented by equity for situations in which the number of persons having substantially identical interests in the subject matter or litigation is so great that it is impracticable to join all of them as parties, in accordance with the usual rules of procedure, and in which an issue is raised which is common to all of such persons." A typical case to illustrate the general situation covered is that of a taxpayer who sues county tax assessors on behalf of himself and all other taxpayers alleging that his assessment is invalid because a wrong method of assessment was used.
Some of the consequences of a class action are very important. Section 86, Restatement, Judgments, states the effect on all parties in the class:
"A person who is one of a class of persons on whose account action is properly brought or defended in a representative action or defense is bound by and entitled to the benefits of the rules of res judicata with reference to the subject matter of the action."
The learned district judge was in error when he said, in his opinion in this case it was "too astonishing to be accepted" that one unwilling to appear in a suit might be bound by the judgment therein. That is just what does happen in case of a true class action.
When do we have a "real" or "true" or "genuine" class action, as distinguished from those described by other adjectives? Moore (2 Federal Practice 2236) gives an explicit answer. He says this action is one wherein, "but for the class action device, the joinder of all interested persons would be essential. This would be in cases where the right to be enforced was joint, common or derivative."
If we keep this language in mind and think for a moment about the rights an employee has against his employer for violation of the Fair Labor Standards Act, we will find the answer to our problem. If an employer who is subject to the Act does not pay an employee who comes within its protection, wages in accordance with its terms, the employee has a claim against his employer. It consists of the unpaid wages, liquidated damages, attorney's fee. But because an employer fails to obey the law as to employee A, it does not follow that he has not obeyed it as to employees B, C or D. B may not be engaged in interstate commerce or the production of goods for commerce, while A may. Employee C may be a salaried worker or a supervisor who does not come under the Act. Employee D may have been paid the statutory minimum and not have worked any of overtime at all.
A does not need any class action device either under Federal Rule 23, 28 U.S.C.A. following section 723c, or § 16 of the statute to let him sue his employer to enforce rights under the Act. His claim is individual. He may or may not have common questions of law or fact with fellow employees in a claim against the employer. If he should lose his lawsuit, it certainly would be a startling result to find that every fellow employee was bound by the estoppel of that judgment when he came to sue the employer. The ...