US Supreme Court won't bite in Cracker Barrel case over scope of wage law

By Daniel Wiessner

Feb 23 (Reuters) - The U.S. Supreme Court on Monday declined to decide whether federal wage law allows workers to bring nationwide class action-style lawsuits against their employers, leaving in place a split among appeals courts.

The justices denied a petition by Cracker Barrel Old Country Store workers to review a 9th U.S. Circuit Court of Appeals decision that said because they filed a wage lawsuit against the company in Arizona federal court, only people from that state could join.

Companies and business groups have been pushing courts to limit multi-state wage-and-hour lawsuits, citing a 2017 Supreme Court ruling that said people who lived outside California could not join a product liability case filed in state court against Bristol-Myers Squibb.

The 9th Circuit was at least the fifth federal appeals court since 2021 to rule that courts lack jurisdiction over residents of other states in cases brought under the Fair Labor Standards Act. The Boston-based 1st Circuit went the other way in a 2022 case, ruling that the FLSA was designed to enable large-scale collective actions against companies operating in multiple states.

The Supreme Court has previously declined to review the 1st Circuit decision and two other cases that raised the issue.

The plaintiffs are represented by Public Citizen Litigation Group, which declined to comment through a spokeswoman. Cracker Barrel did not immediately respond to a request for comment.

Many FLSA lawsuits are filed in the state in which the named plaintiffs worked, but often a larger number of workers from other states opt into the cases. Multi-state class actions tend to be filed in more plaintiff-friendly courts, are more expensive to litigate, and can lead to much larger settlements or damages awards against employers.

The Supreme Court in the Bristol Myers case said that because the drugmaker is not based in California, there was no connection between plaintiffs who were not residents of the state and the state court where the case was filed, and so the court lacked jurisdiction over them. In dozens of cases since then, employers have argued that the same logic applies in FLSA cases brought in federal court.

The four Cracker Barrel plaintiffs sued the company in Arizona federal court in 2021, claiming they were improperly paid the lower tipped minimum wage while performing untipped work and were required to perform work off the clock. Cracker Barrel has denied wrongdoing.

The plaintiffs worked at Cracker Barrel restaurants in Arizona, Ohio, North Carolina, and Florida. There are 14 Cracker Barrel locations in Arizona and more than 130 in the other three states.

A federal judge in Phoenix ruled in 2023 that the case could proceed on behalf of workers from all four states, but the 9th Circuit last year reversed. The court said that because FLSA collective actions are aggregations of individual claims, rather than a single claim brought on behalf of an entire class, courts lack jurisdiction over out-of-state residents.

The plaintiffs in their Supreme Court petition said the FLSA was designed to conserve judicial resources by allowing workers to proceed collectively, but that the 9th Circuit ruling would force them to instead file numerous lawsuits presenting identical claims.

"And in some cases, workers who lack the resources to proceed individually or in a single-state collective action will be unable as a practical matter to pursue their federal rights at all," they said.

The case is Harrington v. Cracker Barrel Old Country Store, U.S. Supreme Court, No. 25-534.

For the plaintiffs: Nicholas Sansone of Public Citizen Litigation Group

For Cracker Barrel: Steven Katz of Constangy Brooks Smith & Prophete

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