Labor & Employment Law Daily Wrap Up, WAGE-HOUR—CLASS ACTIONS—W.D.N.C.: FLSA collective action dismissed after representative plaintiff withdraws, (May 21, 2026)

By Steven Melendez

The withdrawal deprived the district court of jurisdiction.

A federal court lost jurisdiction over a putative collective action under the Fair Labor Standard Act when the named plaintiff withdrew, making it impossible to substitute another plaintiff at a later date, a federal district judge ruled in dismissing the case. The judge also declined to exercise supplemental jurisdiction over a related North Carolina Wage and Hour Act claim, finding it better suited for a state court to hear (Hood v. Capstone Logistics, LLC, No. 3:22-CV-00292-MEO-DCK (W.D.N.C. May 20, 2026)).

Minimum wage and overtime claims. An ex-employee of Capstone Logistics, LLC, filed a complaint against the company on June 30, 2022, alleging Capstone failed to pay minimum wage and overtime as required by law. He sought to bring a collective action under the FLSA, including Capstone employees throughout the United States, and a class action under the North Carolina Wage and Hour Act, including employees in North Carolina.

Withdrawal. After “substantial motions practice,” the ex-employee notified his attorney on January 29, 2025, that a health situation would make it “nearly impossible” for him to continue as representative plaintiff, according to the ruling in the matter. On February 4, 2025, he signed a declaration confirming his desire to withdraw as representative plaintiff but to remain part of the putative class and collective, while agreeing to be replaced by another representative plaintiff.

On February 10, 2025, his counsel told Capstone’s counsel that counsel was trying to find a new representative and that the original ex-employee would not be participating in discovery or a deposition. At the time, there were no other opt-in plaintiffs in the matter, according to the ruling.

First motion to dismiss. On March 12, 2025, Capstone filed a motion to dismiss for failure to participate in discovery. On March 18, the ex-employee’s counsel filed a “Motion for Leave to Amend Complaint and Substitute Class Representative,” asking the court to allow 30 days to find a new representative. In June 2025, two people agreed to join the collective action as opt-in plaintiffs, and a third did so in September 2025.

Second motion to dismiss. On February 17, 2026, the case was re-assigned to the current judge, and on April 6, 2026, Capstone filed a new motion to dismiss, arguing the court lost jurisdiction once the original ex-employee withdrew from participation.

Jurisdiction. Counsel for the employees argued the original ex-employee and three other opt-in parties are sufficient for the court to retain jurisdiction.

The court found that the text of the FLSA, which refers to an action “by any one or more employees,” indicates a claim “must be maintained by at least one individual,” pointing to precedent in Smith v. ERJ Dining, LLC, which found a court lost subject-matter jurisdiction over an FLSA claim when a plaintiff severed ties with counsel.

Substituting a named plaintiff after the fact is different from an immediate substitution, the court found, ruling that it lost jurisdiction the moment the original ex-employee indicated his desire to withdraw. Thus, the claim must be dismissed, the court found.

State claim. The court also declined to exercise supplemental jurisdiction over the North Carolina state-law claim, finding it best resolved by a state court. Though the parties have “already consumed significant time and resources on the litigation of this case, the state-law issues have not been extensively briefed before this Court,” the federal district court ruled, dismissing the state claim without prejudice.

The case is No. 3:22-CV-00292-MEO-DCK.

Judge: Orso, M.

Attorneys: Carolyn Hunt Cottrell (Schneider Wallace Cottrell Kim) for Tyler Hood. Alex W. Karasik (Duane Morris) for Capstone Logistics, LLC.

Companies: Capstone Logistics, LLC

Cases: WageHour ClassActions MinimumWage Overtime Procedure NorthCarolinaNews