Employer May Have to Face More Plaintiffs in Wage and Hour Dispute

June 16, 2009 (PLANSPONSOR.com) - A Calhoun, Georgia carpet and flooring manufacturer may have to face more plaintiffs in a wage and hour legal dispute as a federal appellate court that has thrown out a lower court decision refusing to certify the suit as a class action.

The 11 th U.S. Circuit Court of Appeals did not specifically direct U.S. District Judge Harold L. Murphy to declare the lawsuit by Mohawk Industries’ hourly wage employees a class action. Rather, appellate judges told Murphy to take another look at the 2008 ruling and “conduct a pragmatic assessment” about whether the common themes about the plaintiffs’ potential legal actions were more central than individual differences among employees over their pay or employment circumstances.

The three-judge 11 th Circuit panel took that action after ruling that Murphy had mistakenly decided that the Mohawk plaintiffs had not proven their legal claims against the employer were sufficiently alike – a critical requirement to get a class-action request approved.

The suit claims that Mohawk, via temporary employment agencies, has violated federal laws by hiring illegal aliens as a way to depress hourly wages. The plaintiffs have asked that the racketeering class be defined as all Mohawk hourly workers legally allowed to work in the U.S. and who have worked at the company between January 1999 and the present.

The appellate panel asserted that Mohawk employees’ claims, unlike many employment discrimination claims, were joined by a common thread: the question of whether Mohawk engaged in concert with others in a pattern of illegal activities that was intended to uniformly depress hourly wages.

The appellate panel took issue with Murphy’s decision not to permit a hybrid class that could seek not just monetary damages but also an injunction to put a halt to the hiring practices that the suit challenges. “The district court declined to certify a hybrid case because allowing many individual suits for liability and monetary relief followed by judicial resolution of class-wide equitable relief would be overly cumbersome, confusing and highly inefficient,” the appellate opinion stated. “This inefficiency dissolves if the district court determines common issues predominate.”

Mohawk had argued that wages of its hourly employees and the terms of their employment could vary, often significantly, from employee to employee, making a class action impractical and unwieldy. Company attorneys had also argued that Mohawk’s hiring and wage-setting practices were decentralized, “that there was no evidence of a single enterprise or conspiracy and that proof of injury was not possible,” according to the opinion.

The ruling in  Williams v. Mohawk Industries , No. 08-13446, is available here .