Class Action (Rule 23 Opt-Out)

A federal procedural mechanism allowing a named plaintiff to sue on behalf of all similarly situated class members who do not affirmatively exclude themselves. Rule 23 class actions in employment contexts — covering discrimination, benefits disputes, and some wage claims — produce larger potential damages pools than FLSA collective actions, making them attractive to litigation funders evaluating aggregate recovery potential against investment risk.

The opt-out default structurally produces a larger certified class than an FLSA collective covering the same workforce, which is why funders view Rule 23 employment claims as carrying higher aggregate upside but also higher certification risk, since Rule 23's commonality and predominance requirements are more demanding than FLSA's similarly-situated standard. Funders size capital commitments to Rule 23 employment matters only after independently assessing whether the underlying policy is uniform enough to support classwide proof.