The Sixth Circuit has become the second federal appeals court to toughen the standard for plaintiffs seeking court-authorized notice to potential claimants in a collective action under the Fair Labor Standards Act (FLSA). On May 19, 2023, the U.S. Court of Appeals for the Sixth Circuit held in Brooke Clark v. A&L Homecare and Training Center, LLC that a plaintiff must demonstrate a "strong likelihood" that members of the notice group are similarly situated to the plaintiff for a district court to authorize giving notice of the lawsuit to those individuals.
The History of FLSA Notice
Thirty-five years ago in Lusardi v. Xerox Corp., 118 F.R.D. 351 (D.N.J. 1987), the district court established a procedure for "conditionally certifying" a collective action based upon a "modest factual showing" that plaintiffs are similarly situated to the individuals they seek to represent in a collective action. Under Lusardi, once a plaintiff makes this modest factual showing, notice of the lawsuit issues to individuals the plaintiff claims are similarly situated. The parties then engage in discovery, after which defendant has an opportunity to seek "decertification" of the conditionally certified action by showing that the individuals who joined the lawsuit were not, in fact, similarly situated to the plaintiff. District courts nationwide have almost uniformly followed the Lusardi procedure since the opinion was issued. Lusardi resulted in the issuance of notice in some cases to thousands of putative plaintiffs based only on threadbare allegations of a common policy or practice.
In January 2021, after decades of employer challenges to this procedure, the Fifth Circuit became the first court of appeals to reject it, in Swales v. KLLM Transport Services, LLC, 985 F.3d 430, 434 (5th Cir. 2021). Swales held that district courts have a duty to "consider all of the available evidence" before issuing notice to potential members of a collective action. District courts in the Fifth Circuit are now empowered to move beyond the bare allegations of the pleadings to consider all evidence presented when ruling on a motion to issue notice to potential plaintiffs in a collective action.1 In Swales, the Fifth Circuit stressed that district courts should rigorously enforce the FLSA's "similarly situated" requirement at the outset of litigation and allow parties sufficient early discovery to permit the court to analyze this requirement.
In A&L Homecare, the Sixth Circuit directly rejected Lusardi as well as use of the term "conditional certification." The case involved several former home-health aides who brought suit against A&L alleging violations of the FLSA. The district court conditionally certified the collective action pursuant to Lusardi.
But the district court opinion noted several open questions of law, including the lack of direct authority from the Sixth Circuit endorsing Lusardi and the Fifth Circuit's recent rejection of the Lusardi procedure. Accordingly, the district court certified its order for interlocutory review and the Sixth Circuit considered cross appeals from the parties.
Rejecting Lusardi, the Sixth Circuit reasoned that authorizing notice in a collective action is comparable to a provisional decision of whether to grant a preliminary injunction, specifically with respect to the standard's fourth element: a strong likelihood of success on the merits.
In order to have the court facilitate notice of an FLSA suit to other employees, the Sixth Circuit said, plaintiffs must show a "strong likelihood" that those employees are similarly situated to the plaintiffs themselves. The Sixth Circuit said this standard requires a showing greater than necessary to create a genuine issue of fact (as in opposing summary judgment), but less than necessary to show a preponderance of the evidence. In applying this standard, district courts are directed to expedite their decision to the extent practicable, because the FLSA statute of limitations is typically two years. To this end, a district court may promptly authorize discovery relevant to a motion to provide notice to the allegedly affected group.
What This Holding Means for Employers
The Sixth Circuit pointed out the practical reality that granting FLSA notice often determines the outcome of a case by prompting an employer to settle when "the issuance of notice can easily expand the plaintiffs' ranks a hundredfold." Adoption of a higher standard for giving such notice may help level the playing field between employees and employers in collective actions. After successes in the Fifth and Sixth Circuits, employers likely will continue to push courts in other circuits to adopt similarly heightened standards in considering motions for notice in collective actions.
1 Federal district courts in Alabama (11th Cir.) and just last week in Virginia (4th Cir.) have followed or applied Swales. See Mathews v. USA Today Sports Media Group, LLC, No. 1:22-cv-1407 (E.D. Va. Apr. 14, 2023); Broome v. CRST Malone, Inc., 2022 U.S. Dist. LEXIS 11329 (N.D. Ala. Jan. 21, 2022).
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