PRESENT: BECKER, HUTCHINSON and COWEN, Circuit Judges
(Opinion Filed May 3, l994)
____________
Richard S. Zackin, Esquire (Argued)
J. Timothy McDonald, Esquire
Crummy, Del Deo, Dolan, Griffinger & Vecchione
One Riverfront Plaza
Newark, NJ 07102-5497
and
Harold F. Boardman, Esquire
Vice President and General Counsel
Hoffmann-La Roche, Inc.
340 Kingsland Street
Nutley, NJ 07110-1199
Attorneys for Appellant
Leonard N. Flamm, Esquire
Law Offices of Leonard N. Flamm, Esq.
880 Third Avenue
New York, NY 10022
and
Ben H. Becker, Esquire (Argued)
Jill Schwartz, Esquire
Schwartz, Tobia & Stanziale
22 Crestmont Road
Montclair, NJ 07042
Attorneys for Appellees
____________
OPINION OF THE COURT
____________
HUTCHINSON, Circuit Judge .
By leave granted pursuant to 28 U.S.C.A. § 1292(b) (West 1993), Hoffmann- Roche, Inc. ("Hoffmann-La Roche") appeals an interlocutory order of the United States District Court for the District of New Jersey. The district court's order granted a motion of former Hoffmann-La Roche employees to toll the statute of limitations in an age discrimination class action. Sperling claims Hoffmann-La Roche engaged in age discrimination against all similarly situated Hoffmann-La Roche employees in violation of the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C.A. §§ 621-634 (West 1985 & Supp. 1993). Tolling gave unnamed employees an opportunity to become members of the opt in class that named appellees, Richard Sperling, Frederick Hemsley and Joseph Zelauskas (collectively "Sperling"), represent.
Class actions for age discrimination are authorized by section 7(b) of ADEA (codified as amended at 29 U.S.C.A. § 626(b)). Section 7(b) of ADEA expressly borrows the opt-in class mechanism of section 16(b) of the Fair Labor Standards Act of 1938 ("FLSA") (codified as amended at 29 U.S.C.A. § 216(b) (West Supp. 1993)). Section 16(b) of FLSA is itself modified by the Portal-to-Portal Act of 1947 (codified as amended at 29 U.S.C.A. *5 §§ 251-262 (West 1985)). Section 6 of the Portal-to-Portal Act, 29 U.S.C.A. § 255, was expressly incorporated into ADEA until 1991. See 29 U.S.C.A. § 626(e)(1) (repealed as of Nov. 21, 1991).
Section 7 of the Portal-to-Portal Act, 29 U.S.C.A. § 256, states an opt-in class member's claim for relief under FLSA does not commence until the date the opt-in member's written consent to join the representative action is filed. Section 7, unlike section 6 of the Portal-to-Portal Act, was not expressly incorporated into ADEA.
Over 400 persons filed consents to join Sperling's opt-in class within the
limitations period, but 102 did not file consents until after expiration of unamended
section 626(e)(1)'s two year statute of limitations on individual actions for non-willful
violations of ADEA. Sperling contends these 102 consents were timely filed because the
named plaintiffs' filing of a complaint in a representative action under ADEA legally
tolls the statute of limitations. The district court agreed and granted Sperling's motion
to legally toll the statute for the 102 persons whose individual actions would have been
barred. See Sperling v. Hoffmann-La Roche, Inc.,
[T]he issue of whether filing of the original complaint in this action tolled the statute of limitations for those plaintiffs who joined the action pursuant to this Court's Order dated January 5, 1988, involves *6 a controlling question of law as to which there is a substantial ground for difference of opinion and an immediate appeal from the order may materially advance the ultimate termination of the litigation.
Joint Appendix ("App.) at 14A-15A. Hoffmann-La Roche thereafter filed a petition seeking our permission to appeal, as section 1292(b) requires. We granted its petition.
Whether an opt-in member in a class action can join a representative suit filed under ADEA after the statute of limitations on individual actions has run is a matter of first impression in our Court. We answer in the affirmative. Under ADEA we believe Congress did not intend to restrict opt-in classes to employees who file consents within the applicable statute of limitations that section 16(b) of FLSA and section 6 of the Portal-to-Portal act set for individual age discrimination claims. To the contrary, we believe that Congress expressed its intent to permit additional members to opt-in and join the class by filing consents after the statute of limitations on their individual actions would have run when it omitted section 7 of the Portal-to-Portal Act from those portions of FLSA that it incorporated into ADEA's original statute of limitations. We therefor hold qualified plaintiffs may join a representative action for age discrimination after the time period for their individual actions has lapsed when the representative plaintiffs have filed a complaint within the statute of limitations set forth in section 6 of the Portal-to-Portal Act, provided, however, that the representatives have framed their complaint in a manner that puts the employer on notice that it will be called upon to defend an opt-in class action. Therefore, we will affirm the district court's order granting Sperling's motion to legally toll the statute of limitations and remand the case to the district court for further proceedings consistent with that order and our answer to the certified question this appeal presents.
I.
On February 4, 1985, Hoffmann-La Roche discharged or demoted about 1,200 employees in a systematic reduction of its work force. Sperling was one of them. He filed an age discrimination charge with the Equal Employment Opportunity Commission ("EEOC") on behalf of all similarly situated employees. On May 7, 1985, Sperling filed his representative action in the district court. The complaint alleged that Hoffmann Roche had engaged in unlawful age discrimination, clearly indicated its representative nature, and was filed within the then applicable two year statute of limitations for non willful violations of ADEA.
Sperling had already notified 600 potential plaintiffs and over 400 filed
written consents within the two year statute of limitations applicable to their individual
actions. To ensure that all potential plaintiffs would receive notice of the suit,
Sperling moved for discovery of the names and addresses of all similarly situated
employees and requested the court to send notice of the action to all potential class
members in accordance with section 7(b) of ADEA,
[0]
borrowed from section 16(b) of FLSA.
The district court granted Sperling's motion on January 5, 1988 and required all consent
*9
forms to be filed with the court within a definite, limited time. See Sperling v.
Hoffmann-La Roche,
In April 1990, notice of the pendency of this action was circulated to Hoffmann La Roche's former employees. In response, within the time permitted by the district court's order but after the two year statute of limitations on their individual actions had expired, another 102 persons filed consents to join Sperling's representative acti In September 1991, Sperling asked the district court to hold that these 102 consents were timely filed because the complaint in the representative action legally tolled the statute of limitations under ADEA. The district court referred the matter to a Special Master. The Special Master recommended granting Sperling's motion to join or incorporate into the opt-in class the 102 persons who filed consents in accordance with the procedure the district court established in its order after the statute would have run on their individual actions.
The district court adopted the Special Master's recommendation and granted
Sperling's motion for legal tolling. See Sperling,
*11 The district court did not base its decision solely on the selective incorporation theory. It also recognized that ADEA
does share some procedural similarities with the FLSA, [but] it also shares many similarities with Title VII, which is governed by Rule 23. . . . Thus, it is reasonable that Congress intended the tolling rule applicable to Title VII cases to apply, rather than the non- tolling rule of Section 256 of the FLSA. Courts have looked to and applied other Title VII procedural aspects to ADEA class actions.
Id. (citations omitted). According to the district court, legal tolling in ADEA cases is consistent with the goals of any statute of limitations--to provide notice to defendants of claims against them and to discourage plaintiffs from sleeping on their rights. 364. In addition, the district court described some of the practical problems that would ensue if tolling were not permitted. Sperling filed the complaint on May 7, 1985, three months after the alleged discriminatory act occurred. The district court did not grant Sperling's motion for court-authorized service of notice until January 1988, almost three years after the alleged unlawful conduct. Under Hoffmann-La Roche's interpretation, the statute of limitations would have expired before the court had authorized service of notice on putative members of the opt-in class. Id. at 365.
After the district court handed down its order, Hoffmann-La Roche moved to certify the legal tolling issue for interlocutory appeal pursuant to 28 U.S.C.A.
§ 1292(b). The district court granted permission for an interlocutory appeal and a motions panel of this Court granted Hoffmann-La Roche's petition for permission to appeal pursuant to 28 U.S.C.A. § 1292(b).
II.
violation may be commenced within three years after the cause of action accrued.
29 U.S.C.A. § 255.
This case is a private, representative action authorized by section 7(b) of ADEA. The district court had subject matter jurisdiction under 28 U.S.C.A. § 1331 (West 1993). We have appellate jurisdiction over the district court's order granting Sperling's motion for legal tolling under 28 U.S.C.A. § 1292(b).
Whether a consent to opt-in must be filed by a class member who wishes to
participate in an ADEA class action within the same time limit he or she has to file an
individual complaint is a question of law. Accordingly, our review of the district
court's decision is plenary. See Gavalik v. Continental Can Co.,
III.
Our holding that ADEA's statute of limitations is tolled for eligible class
members by the initial filing of a representative complaint, as long as the representative
nature of the action is clear on the complaint's face, is foreshadowed by our opinion in
*13
Lusardi v. Lechner,
A.
In ADEA, Congress borrowed portions of many other statutes. It incorporated parts of FLSA, parts of the Portal-to-Portal Act, and parts of Title VII of the Civil Rights Act of 1964, 42 U.S.C.A. §§ 2000e to 2000e-17 (West 1981 & Supp. 1993). Each of these acts employs one of two types of class actions as aids to enforcement: the opt representative action permitted by Federal Rule of Civil Procedure 23(b)(3) and the opt representative action authorized by section 16(b) of FLSA. Analysis of the district court's order permitting persons to opt-in after their individual actions could have been barred by limitations requires a brief review of these two types of class actions.
The opt-in class action that section 16(b) of FLSA permits has its antecedents in the old equity Bill of Peace, a device Chancellors once used to join numerous parties with common interests so that their common claims could be disposed of efficiently in one suit. See Ellen E. Sward, Values, Ideology and the Evolution of the Adversary System Ind. L.J. 301, 331 (1989). In its inception, the Bill of Peace was a response to the *14 strict limits the common law placed on joinder of parties, though only the representative parties were named. The modern opt-out class action also evolved out of the joinder mechanism of the old Bill of Peace, but it no longer has any easily perceptible traces of its antecedents in permissive joinder. The opt-out class action is governed by Federal Rule of Civil Procedure 23(b)(3), which differs in important respects from the opt- class permitted by section 16(b) of FLSA. See, e.g., Fed. R. Civ. P. 23(c)(3) (a class action judgment is binding on all class members "who have not requested exclusion"). Thus, if a person does not wish to be bound by an order in a Rule 23 class action he must specifically ask to be excluded.
While ADEA's opt-in class action is not governed by Federal Rule of Civil
Procedure 23(b)(3), class actions brought under Title VII are governed by the opt-out
provisions of Rule 23. See Edwards v. Boeing Vertol Co.,
[T]he difficulties and potential for unfairness which, in part, convinced some courts to require individualized satisfaction of the statute of limitations by each member of the class, have been eliminated, and there remain no conceptual or practical obstacles in the path of holding that the filing of a timely class action complaint commences the action for all members of the class as subsequently determined. Whatever the merit in the conclusion that one seeking to join a class after the running of the statutory period asserts a "separate cause of action" which must individually meet the timeliness requirements, such a concept is simply inconsistent with Rule 23 as presently drafted. A federal class action is no longer "an invitation to joinder" but a truly representative suit designed to avoid, rather than encourage, unnecessary filing of repetitious papers and motions.
American Pipe,
When class relief is sought pursuant to section 16(b) of FLSA, as modified
section 7 of the Portal-to-Portal Act, the rule governing the timeliness of an opt-
class member's consent to join a class is different. By section 7 of the Portal-to
Act, all class members who seek relief under FLSA must submit their affidavits of consent
before the statute of limitations applying to their individual claims has run. In the
early case of Gibbons v. Equitable Life Assurance Society of United States,
The restrictive provisions of the Portal-to-Portal Act were thought necessary to
control what Congress viewed as the virtually unlimited liability generated by the United
States Supreme Court's decision in Anderson v. Mt. Clemens Pottery Co.,
The uncertainty of the present situation with its tremendous threat is seriously interfering with efforts to return to a peacetime economy with full and efficient production; it has clogged the courts with new and expensive litigation; it interferes with the right of collective bargaining; it threatens to add greatly to the cost of goods and services bought by the Government, while at the same time reducing the Federal revenue; it is a serious burden on interstate commerce.
House Comm. on the Judiciary, Portal-to-Portal Act of 1947, H.R. Rep. No. 71, 80th Cong., 1st Sess., reprinted in 1947 U.S.C.C.A.N. 1029, 1034. Thus, when Congress enacted the Portal-to-Portal Act of 1947, one year after Mt. Clemens, it severely restricted the claims an employee could make for back wages by various means, including a strict statute of limitations.
The representative mechanism Congress created for use in age discrimination cases differs from both the Rule 23 class action used in Title VII and the more restrictive representative action FLSA permits. These differences seem clear from the language of ADEA as well as its legislative history.
Congress did not incorporate all the class action provisions of FLSA and the
Portal-to-Portal Act into ADEA, nor did it add an age discrimination cause of action to
either FLSA or Title VII. Indeed, Congress declined to adopt a bill that would have
amended FLSA to bring age discrimination within its prohibitions. See Levine v. Bryant
Congress was precise in selecting the portions of other acts that were to comprise ADEA. Only specific subsections of FLSA, the Portal-to-Portal Act and Title VII were incorporated. Among those left out was section 7 of the Portal-to-Portal Act, one of *17 the restrictive clauses which Congress felt was needed to stem the tide of litigation it feared would otherwise follow the decision in Mt. Clemens.
The opt-out class mechanism of Rule 23(b)(3) and (c)(2) was also excluded by
Congress's incorporation of the opt-in provisions of section 16(b) of FLSA. Thus, age
discrimination plaintiffs must affirmatively express their desire to join a pending
representative action. The converse is true under Rule 23(c)(2). Members of a Rule
23(b)(3) class are automatically included and remain so unless they make a timely election
to opt-out. On the other hand, "the prohibitions of the [ADEA] were derived in haec
verba from Title VII." Lorillard v. Pons,
We see nothing in either the unamended statutory text or the legislative hist
of ADEA that indicates we should incorporate section 7 of the Portal-to-Portal Act's
restrictions into it. Indeed, we think this would be inconsistent with both the Act's
text, as it appeared prior to 1991, and Congress's intent. Cf. Lorillard, 434 U.S. at
581-82. We are not persuaded to the contrary by O'Connell v. Champion International
Corp.,
The District Court held, and we agree, that the relation-back doctrine must yield in ADEA cases to the specific provision of 29 U.S.C. § 256 that an action may be commenced only by the filing of a complaint by the named individual, or by his affirmatively opting into a previously commenced class action.
Id. at 394. The O'Connell court did not expand on its reasoning or consider the possibility that Congress's refusal to incorporate section 7 of the Portal-to-Portal Act into ADEA was an indication that ADEA's statute of limitations, taken verbatim from *18 section 6 of the Portal-to-Portal Act, should be tolled for the benefit of persons who opt-in to a timely filed representative action. [0]
We are bound by the intent of Congress, as we perceive it. In deciding to
borrow parts of FLSA's statute of limitations for ADEA, Congress refused to carry over
section 7 of the Portal-to-Portal Act requiring class members who desire to opt-in to
representative actions brought under FLSA to do so within the time limits imposed on
individual claims. Instead, it chose to incorporate only section 6's limitations on
individual claims. Its incorporation of selected provisions into section 7(b) of ADEA
indicates that Congress deliberately left out those provisions not incorporated. See
Morelock v. NCR Corp.,
explained in Continental Casualty Co. v. United States,
[I]n enacting the ADEA, Congress exhibited both a detailed knowledge of the FLSA provisions and their judicial interpretation and a willingness to depart from those provisions regarded as undesirable or inappropriate for incorporation.
*19
Lorillard,
In Trans World Airlines, Inc. v. Thurston,
Moreover, the special problems of open-ended unanticipated claims that Mt Clemens created are not present under ADEA so long as both the charge and the complaint put the employer on notice that class relief will be sought.
B.
An opt-in class action under ADEA is more than a device for the permissive
joinder of parties. Hoffmann-La Roche's argument that the opt-in procedure of section
16(b) of FLSA is a substitute for permissive intervention and therefore that Federal Rule
of Civil Procedure 24(b) provides an appropriate analogy for determination of the
timeliness of a consent to a representative action under ADEA is not persuasive.
Hoffmann-La Roche's argument that Rule 24 applies is only a variation on the equally
unpersuasive argument that incorporation of section 16(b) of FLSA into ADEA incorporates
*20
Rule 20's rules on permissive joinder. We rejected this analogy to permissive joinder
under Rule 20 in our earlier decision in this case. See Sperling,
We think a representative action brought under ADEA is commenced on behalf of
all consenting class members when the original representative complaint is filed.
Fed. R. Civ. P. 3 ("A civil action is commenced by filing a complaint with the court.").
It has already been firmly settled, in the context of Rule 23 class actions, that "a
tolling rule for class actions is not inconsistent with the purposes served by statutes of
limitations." See Crown, Cork & Seal Co. v. Parker,
Rule 23(d) then allows a district court to prevent abusive tolling extensions
through its case management power.
[0]
See Sperling,
provides, in pertinent part:
In the conduct of actions . . . the court may make appropriate orders: . . . (2) requiring, for the protection of the members of the class or otherwise for the fair conduct of the action, that notice be given in such manner as the court may direct to some or all of the members of any step in the action, or of the proposed extent of the judgment, or of the opportunity of members to signify whether they consider the representation fair and adequate, to intervene and present claims or defenses, or otherwise to come into the action; . . . (5) dealing with similar procedural matters. Because employers generally have business records containing the vital statistics and
work histories of their past employees, they are in the best position to define the outer limits of class size.
filed. Such a controlled tolling of ADEA's statute of limitations seems to us to accomplish fully the intent of Congress without inflicting any untoward inequity on an employer who knows before the statute runs that he is dealing with a representative class action.
IV.
Accordingly, in answer to the question certified, we hold that the filing of the original complaint tolled the applicable two year statute of limitations for those plaintiffs who joined the action after the limitations period for their individual actions had run. Section 7 of the Portal-to-Portal Act cannot be used to limit the time within which persons "similarly situated" to a representative plaintiff who has filed a timely complaint for age discrimination may opt-in to an ADEA representative class action. Legal tolling is consistent in this case with the purposes behind a statute of limitations. The district court's order granting Sperling's motion for legal tolling will be affirmed and the case remanded to it for further proceedings consistent with this opinion.
[0] At the time Sperling filed suit, former section 626(e)(1) of ADEA incorporated the two year statute of limitations for non-willful violations set forth in section 6 of the Portal-to-Portal Act. See 29 U.S.C.A. § 626(e)(1) (West 1985). The Civil Rights Act of 1991, Pub. L. No. 102-166, Title I, § 115, 105 Stat. 1079, amended section 626(e)(1) of ADEA. Under the current version of section 626(e), effective November 21, 1991, section 6 of the Portal-to-Portal Act is no longer expressly incorporated and the statute of limitations for an age discrimination action is 90 days after receipt of a notice that "a charge filed with the [EEOC] under this chapter is dismissed or the proceedings of the [EEOC] are otherwise terminated by the [EEOC]." 29 U.S.C.A. § 626(e) (effective Nov. 1991) (West Supp. 1993). Neither party argues that the new limitations period applies retroactively. Thus, the unamended version of section 626(e)(1) is the applicable statute of limitations. See also infra n.14.
Notes
[0] As a prerequisite to their court action, we have previously held that the class
representatives must include a similar notice in the charge they file with the EEOC
Lusardi v. Lechner,
[0] Section 7(b) of the ADEA reads, in relevant part: The provisions of this chapter shall be enforced in accordance with the powers, remedies, and procedures provided in sections 211(b), 216 (except for subsection (a) thereof), and 217 of this title, and subsection (c) of this section. . . . 29 U.S.C. § 626(b).
[0] Section 16(b) of the FLSA requires each plaintiff to opt-in to the class actions it allows. It reads, in pertinent part: (b) . . . An action . . . may be maintained against any employer . . . by any one or more employees for and in behalf of himself or themselves and other employees similarly situated. No employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought. . . . 29 U.S.C.A. § 216(b).
[0] At the time Sperling filed this motion, the issue of the availability of legal tolling under the ADEA was before this Court in Mershon v. Elastic Stop Nut Div. of Harvard Indus., Inc., No. 90-5597 (3d Cir. 1991) (order dismissing appeal as moot). The parties in Sperling agreed to defer further proceedings until decision of this Court. Both Sperling and Hoffmann-La Roche had filed briefs as amicus curiae in Mershon. After we heard oral argument in Mershon, but before we decided the case, the parties in Mershon reached a settlement and we dismissed the appeal as moot.
[0] Section 7 reads: In determining when an action is commenced for the purposes of section 255 of this title, an action . . . under the Fair Labor Standards Act of 1938, as amended [29 U.S.C.A. § 201 et seq.], . . . shall be considered to be commenced on the date when the complaint is filed; except that in the case of a collective or class action instituted under the Fair Labor Standards Act of 1938, as amended, . . . it shall be considered to be commenced in the case of any individual claimant-- (a) on the date when the complaint is filed, if he is specifically named as a party plaintiff in the complaint and his written consent to become a party plaintiff is filed on such date in the court in which the action is brought; or (b) if such written consent was not so filed or if his name did not so appear--on the subsequent date on which such written consent is filed in the court in which the action was commenced. 29 U.S.C.A. § 256.
[0] Section 6 of the Portal-to-Portal Act, expressly incorporated into ADEA until 1991, reads, in pertinent part: Any action commenced . . . to enforce any cause of action for unpaid minimum wages, unpaid overtime compensation, or liquidated damages, under the Fair Labor Standards Act of 1938, as amended [29 U.S.C.A. § 201 et seq.], . . .-- (a) if the cause of action accrues on or after May 14, 1947--may be commenced within two years after the cause of action accrued, and every such action shall be forever barred unless commenced within two years after the cause of action accrued, except that a cause of action arising out of a willful
[0] Section 1292(b), which gives us jurisdiction over interlocutory appeals, provides in pertinent part: [A] district judge, in making in a civil action an order not otherwise appealable under this section, shall be of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, he shall so state in writing in such order. The Court of Appeals which would have jurisdiction of an appeal of such action may thereupon, in its discretion, permit an appeal to be taken from such order, if application is made to it within ten days after the entry of the order: Provided, however, That application for an appeal hereunder shall not stay proceedings in the district court unless the district judge or the Court of Appeals or a judge thereof shall so order. 28 U.S.C.A. § 1292(b) (emphasis in original).
[0] It is also in accord with Anderson v. Montgomery Ward & Co. ,
[0] If the original version of Rule 23, with its "spurious" class action, were still in effect, plaintiffs would still have to opt-in to be bound by the decision. See Fed. Civ. P. 23 advisory committee's notes to 1966 amendment; see also Sward, supra, at 332.
[0] The rationale of O'Connell may be inconsistent with that of the same court in Kloos v.
Carter-Day Co.,
[0] Translated, the maxim reads: "expression of one thing is the exclusion of another." Black's Law Dictionary 521 (5th ed. 1979).
[0] For a comprehensive critique of Mt. Clemens and a full consideration of the problems it raises, see H. Hart & A. Sacks, The Legal Process: Basic Problems in the Making and Application of Law 1296-1301 (tent. ed. 1958).
[0] We do not think this rationale is weakened by the 1991 amendment to section 626(e) of ADEA. The amendment deleted the reference to section 6 of the Portal-to-Portal Act and