Last week, the Third Circuit issued a precedential decision holding that the federal common law standard for successor liability is applicable to claims brought under the Fair Labor Standards Act.  The plaintiff filed a class and collective action complaint alleging that she was hired as a mortgage underwriter and was not paid overtime in accordance with federal law and the New Jersey Wage and Hour Law.  The district court dismissed plaintiff’s amended complaint, but the Third Circuit vacated the district court’s decision and remanded for further proceedings.

The Third Circuit now applies the same successor liability standard as the Seventh and Ninth Circuits.  Under this standard a court considers the following factors: (1) continuity of operations and work force of the successor and predecessor employers, (2) notice to the successor-employer of its predecessor’s legal obligation, and (3) ability of the predecessor to provide adequate relief directly.  The Court of Appeals also concluded that the complaint adequately pled a claim under the successor liability theory and noted that “we will not fault [plaintiff] for her inability to make specific allegations as to the continuity of ownership at this stage, particularly given her reasonable assertion that the inner working of the privately held corporations at issue remain hidden to her.”

The Third Circuit also held that the complaint adequately alleged that the two corporate defendants were joint employers explaining that “the scenario described by [plaintiff], in which she and virtually all other Security Atlantic employees were abruptly and seamlessly integrated into REMN’s commercial mortgage business while some of those same employees continued to be paid by Security Atlantic, supports [plaintiff’s] claim that the two companies shared authority over hiring and firing practices.”  Finally, the Third Circuit determined that the amended complaint provided enough information to “allow the court to draw the reasonable inference that the [individual] defendants are liable for misconduct alleged.”

Abbey Spanier, LLP, located in New York City, is a well-recognized national class action and complex litigation law firm.



As discussed in a post last year, on March 19, 2013, Justice van Rensburg of the Ontario Superior Court of Justice issued an opinion relating to overlapping class action proceedings against IMAX Corporation (“IMAX”) in the United States and Ontario, Canada (the “March 2013 Order”).  In her decision, Justice van Rensburg recognized a U.S. class action settlement with IMAX, which had already been approved by a U.S. Court and amended its previous decision certifying a “global” class of investors that acquired IMAX shares on both the NASDAQ and TSX stock exchanges.  The March 2013 Order amended the definition of the Ontario global class by removing all persons previously within the Ontario global class who decided to participate in the settlement arising out of the parallel U.S. proceedings, and approved by the U.S. Court.  The removal from the Ontario global class of all class members who would partake in the U.S. settlement was a condition of that settlement and prevented any double recovery from both jurisdictions.

Shortly after the decision, Plaintiffs in the Canadian Action appealed the March 2013 Order.

On October 29, 2013, Justice Tzimas of the Ontario Superior Court of Justice issued an order denying the Canadian plaintiffs’ July 29, 2013 motion for leave to appeal the March 2013 Order.  See Silver v. IMAX Corp., [2013] ONSC 1667 (Can. Ont. Sup. Ct. J.), Reasons for Judgment, October 29, 2013.   A copy of that decision can be found here.  In rejecting the Canadian plaintiffs’ motion for leave, Justice Tzimas determined, among other things that, “The amendment of the class would facilitate the exercise of a class member’s litigation autonomy. It would not take anything away. Nobody would be forcing a class member to exercise his option on the day of reckoning in one way or another.  To the contrary, a refusal to amend the class would effectively extinguish the U.S. settlement completely, and therefore, take away the settlement option from the class members who wanted to settle their claim.”  Id. at ¶44.

In November 2013, after the parties in the U.S. Class Action determined that the March 2013 Order is now final and unappealable, Lead Plaintiff in the U.S. Class Action moved the U.S. Court for entry of final judgment.  On November 21, 2013, the Court entered a final judgment dismissing all claims against defendants IMAX, Richard L. Gelfond, Bradley J. Wechsler, Francis T. Joyce and PricewaterhouseCoopers-Canada LLP (the “Final Judgment Order”).   The Final Judgment Order permits the U.S. settlement to be concluded and payments to eligible claimants to proceed.

Abbey Spanier, LLP, located in New York City, is a well-recognized national class action and complex litigation law firm.