In order to continue operating legally, businesses are required to follow certain procedures and standards. When a business fails to comply with what is required of it, employees may choose to sue their employer. Additionally, when a defective product injures people, they have a cause of action against its manufacturer. 

When multiple people share the same legal claim (the same problem for which they want to receive compensation), their claims are often combined into a group action – either a class action or a collective action. 

A class action lawsuit automatically assumes that an employee is part of the group that has been impacted – unless he or she chooses to opt out of it. Someone can opt out of a class action lawsuit by simply signing a document asserting that they don’t wish to participate. 

Class action lawsuits may be filed in federal court if they relate to federal law of if they meet certain criteria. After a complaint has been filed, the plaintiffs most file a motion for class certification. However, the defendant(s) can object to this based on various grounds. 

While not exhaustive, some common class action lawsuits include the following:

• Consumer protection law violations
• Workplace discrimination
• Product liability (manufacturing defect)
• Consumer protection law violations
• Antitrust violations
• Environmental issues/toxic exposure

Collective action lawsuits are brought in state or federal court. The biggest difference between a class action lawsuit and a collective action lawsuit is that as stated, a class action lawsuit requires affected workers to opt out, whereas a collective action lawsuit requires that they opt in. They can opt in by signing a document stating that they would like to participate. However, if someone who would otherwise be allowed to join a collective action lawsuit fails to opt in, he or she is not entitled to any form of compensation that should come from it. 

Additionally, collective action lawsuits require evidence in a certification process, that group members are “similarly situated.” For example, this means that an Asian employee who files a collective action lawsuit because of race discrimination would have to provide evidence that non-Asian employees were treated better. 

Whether you are an employee or an employer, it’s equally important that you understand the difference between class actions and collective actions, as it determines who has the right to recover compensation – should it be awarded. It is especially important to understand the difference with opting out versus opting in to the lawsuit. 

If you are involved in a class action or collective action lawsuit, the attorneys at ST Legal Group can help. We’ll make sure that you understand the type of lawsuit and what is required on your behalf to receive the best outcome. To learn more, or to schedule a consultation, contact us today!

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