Full Disclosure To Plaintiffs: Failure To Prevail In An FLSA Case Could Cost You

When negotiating a collective action notice to potential opt-in plaintiffs upon an order for or agreement to conditional certification, a defendant-employer often seeks to include language in the notice that if plaintiffs lose the case, they may be liable to the defendant for costs.  Not surprisingly, plaintiffs’ counsel usually resists including such a warning, arguing that the imposition of costs never actually happens and that including it has a chilling effect on potential opt-ins.  Defendant’s counter usually goes something like this:  well, it could happen and potential plaintiffs are entitled to full notice of all the potential benefits and risks of joining the case.  One lawyer’s “chilling effect” is another lawyer’s “full disclosure.”  Defendants have been without many good examples of a court actually taxing costs against the losing plaintiffs in an FLSA action for a significant sum.  That is, until now.

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