Sperling v. Hoffman-La Roche, Inc.

• Decision Date: 03 May 1994
• Docket Number: HOFFMANN-LA,No. 93-5290,93-5290
• Citation: 24 F.3d 463
• Parties: 64 Fair Empl.Prac.Cas. (BNA) 910, 64 Empl. Prac. Dec. P 43,011, 62 USLW 2695 Richard SPERLING; Frederick Hemsley; and Joseph Zelauskas, Individually and on behalf of all other persons similarly situated, Appellees, v.ROCHE, INC., a New Jersey corporation, Appellant.
• Court: U.S. Court of Appeals — Third Circuit

Page 463

24 F.3d 463

64 Fair Empl.Prac.Cas. (BNA) 910,

64 Empl. Prac. Dec. P 43,011, 62 USLW 2695

Richard SPERLING; Frederick Hemsley; and Joseph Zelauskas Individually and on behalf of all other persons similarly situated, Appellees, v. HOFFMANN-LA ROCHE, INC., a New Jersey corporation, Appellant.

No. 93-5290.

United States Court of Appeals Third Circuit.

Argued Feb. 14, 1994.

Decided May 3, 1994.

Richard S. Zackin, (argued), J. Timothy McDonald, Crummy, Del Deo, Dolan, Griffinger & Vecchione, Newark, NJ, and Harold F. Boardman, Vice President and Gen. Counsel, Hoffmann-La Roche, Inc., Nutley, NJ, for appellant.

Leonard N. Flamm, Law Offices of Leonard N. Flamm, New York City, and Ben H. Becker, (argued), Jill Schwartz, Schwartz, Tobia & Stanziale, Montclair, NJ, for appellees.

Present: BECKER, HUTCHINSON and COWEN, Circuit Judges.

OPINION OF THE COURT

HUTCHINSON, Circuit Judge.

By leave granted pursuant to 28 U.S.C.A. Sec. 1292(b) (West 1993), Hoffmann-La 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. Secs. 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. Sec. 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. Sec. 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. Secs. 251-262 (West 1985)). Section 6 of the Portal-to-Portal Act, 29 U.S.C.A. Sec. 255, was expressly incorporated into ADEA until 1991. See 29 U.S.C.A. Sec. 626(e)(1) (amended as of Nov. 21, 1991). ¹

Section 7 of the Portal-to-Portal Act, 29 U.S.C.A. Sec. 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., 145 F.R.D. 357, 366 (D.N.J.1992).

Hoffmann-La Roche moved for interlocutory review of the legal tolling issue pursuant to 28 U.S.C.A. Sec. 1292(b). The district court certified the following question to us pursuant to 28 U.S.C.A. Sec. 1292(b):

[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 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 therefore 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. ² 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-La 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, ³ borrowed from section 16(b) of FLSA. ⁴ The district court granted Sperling's motion on January 5, 1988 and required all consent forms to be filed with the court within a definite, limited time. See Sperling v. Hoffmann-La Roche, 145 F.R.D. 357, 358 (D.N.J.1992). Both this Court and the United States Supreme Court subsequently affirmed this order. See Sperling v. Hoffmann-La Roche, Inc., 862 F.2d 439 (3d Cir.1988), aff'd, 493 U.S. 165, 169-171, 110 S.Ct. 482, 486, 107 L.Ed.2d 480 (1989) (district court has discretion under ADEA to implement 29 U.S.C.A. Sec. 216(b) by facilitating notice to potential plaintiffs who had not yet filed written consents to join).

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 action. 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. ⁵ 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, 145 F.R.D. at 366. It concluded "[a]nalysis of the statutory scheme of ADEA, the existing case law, and the policies and goals underlying class actions and statutes of limitations, persuades me to find that the best resolution of this issue is that the statute of limitations is tolled in ADEA class actions." Id. at 360. It rejected Hoffmann-La Roche's argument that section 7 of the Portal-to-Portal Act ⁶ was implicitly incorporated into unamended section 7(e) of ADEA along with section 6 of the Portal-to-Portal Act's incorporation. Instead, the district court reasoned that Congress intended to incorporate only certain provisions of section 16(b) of FLSA, as amended by the Portal-to-Portal Act, into ADEA. Id. at 361. Section 6 of the Portal-to-Portal Act ⁷ was expressly incorporated while section 7 of that Act was not. Id.

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...