United States: Third Circuit Clarifies Standard For Final Certification Of FLSA Collective Actions

In Zavala v. Wal-Mart Stores, Inc., 2012 WL 3217522 (3d Cir. August 9, 2012), the Third Circuit Court of Appeals clarified the standard for final certification of a collective action under the Fair Labor Standards Act (FLSA), affirming the district court's decision to deny final certification of a class of janitors that alleged that Wal-Mart failed to pay overtime, and instead engaged in an unlawful enterprise of transporting and harboring illegal immigrants and imprisoning them in stores, in violation of the Racketeer Influenced and Corrupt Organizations Act. 

The Third Circuit held that to certify an FLSA collective action for trial, the district court—after considering the claims and defenses of the parties and all relevant evidence—must make a finding of fact that the members of the collective action are "similarly situated." Relevant factors in the "similarly situated" analysis include: whether the plaintiffs are employed in the same corporate department, division, and location; whether they advance similar claims; whether they seek substantially the same form of relief; whether they have similar salaries and circumstances of employment; and whether the employer's defenses are individualized. The court explained that the plaintiffs bear the burden of demonstrating that they are similarly situated, and concluded that they must make that showing by a preponderance of the evidence. Applying this test to the facts, the court found that the plaintiffs in question were not similarly situated, as they worked in 180 different stores across 33 states, for 70 different contractors and subcontractors, and worked for varying hours and for different wages depending on the contractor. 

The Third Circuit's opinion made no reference to the U.S. Supreme Court's recent decision in Wal-Mart Stores, Inc. v. Dukes, leaving the oft-debated question of whether Dukes applies to FLSA cases unsettled.

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