Employment Law Report
Kentucky Court of Appeals Rules That Kentucky Wage and Hour Statute Does Not Permit Class Actions
In an important ruling for employers, on February 27, 2015, the Kentucky Court of Appeals ruled that KRS 337.385 does not permit individuals to pursue claims for unpaid wages and overtime in Kentucky as class actions. See McCann v. The Sullivan University System, Inc., No. 2014-CA-000392-ME. The Court relied on the language in KRS 337.385(2) stating that actions for unpaid wages and overtime may only be maintained by one or more employees “for and in behalf of himself, herself, or themselves.” The Court concluded that this language does not permit plaintiffs to pursue claims for unpaid wages and overtime compensation in a representative capacity.
The Court contrasted the language in KRS 337.385 and the Fair Labor Standards Act, which expressly permits plaintiffs to bring claims for wage and hour violations “on behalf of himself or themselves or other employees similarly situated.” 29 U.S.C. §216(b) (emphasis added).
When Kentucky’s General Assembly enacted KRS 337.385, it did not include any language allowing representative or collective actions. Instead, it plainly expressed that an action may be only brought by one or more employees on behalf of himself, herself, or themselves. See KRS 337.385(2). It did not permit actions to be brought on behalf of employees who are similarly situated.
McCann, p. 9. Rejecting the argument that Rules 1 and 23 of the Kentucky Rules of Civil Procedure make class actions available in all civil actions, the Court held that KRS 337.385’s language specifying who may bring an action for unpaid wages is contained in a substantive statute and is “intertwined with the statute’s rights and remedies.” Id. at p. 12. Accordingly, the Court concluded that the class action provisions in Rule 23 of the Kentucky Rules of Civil Procedure “cannot override KRS 337.385’s limitation on who may bring claims for unpaid wages.” Id. at p. 10.
The Court’s decision is good news for employers who face liability under Kentucky’s wage and hour laws. Although employers may still face individual claims for unpaid wages and overtime compensation under Kentucky law, the Court’s decision in McCann definitively holds that employees may not bring such claims as class actions.