On January 12, 2026, the U.S. Supreme Court declined to address a deepening circuit split about the process for certifying collective class actions under the Age Discrimination in Employment Act ("ADEA") and the Fair Labor Standards Act ("FLSA"). As a result, uncertainty persists for employers and employees alike, with federal courts adopting a range of standards.
Historical Class Certification Standard
Both Rule 23 class actions and FLSA section 216(b) collective actions allow employees to bring suit on behalf of others who are "similarly situated." Section 216(b) mandates employee-plaintiffs opt-in to the lawsuit, which requires courts to approve and oversee the circulation of class notice to potential plaintiffs. The same process applies to ADEA class actions. In Hoffman-La Roche, Inc. v. Sperling (1989), the U.S. Supreme Court authorized the sending of notice of a FLSA collective action to potential opt-in plaintiffs so long as that notice is neutral, timely and accurate. Following the Supreme Court's holding in Hoffman-La Roche, most federal courts adopted a plaintiff-friendly, two-step analysis articulated in Lusardi v. Xerox Corp. Under the Lusardi approach, plaintiffs who demonstrate that employees are "similarly situated" based on a "modest factual showing" achieve conditional certification.
Conditional certification permits district courts to oversee the circulation of notice to potential class action members. Courts then consider final certification or decertification at a later point in the case. Practically, this lenient standard has increased class sizes and created pressure for employers to settle early, before incurring the time and expense associated with the seemingly perfunctory "conditional" certification process and, thereafter, the final, evidence-based class certification decision.
Seventh Circuit's Approach
In August, the Seventh Circuit, in Richards v. Eli Lilly & Company, departed from the two-step Lusardi analysis. There, the Seventh Circuit held that district courts must consider evidence from both sides concerning whether workers are similarly situated enough to proceed together. Under the Seventh Circuit's approach in Richards, a plaintiff must first make a threshold showing that there is a material factual dispute as to whether the proposed collective is similarly situated. Thereafter, employer/defendants may submit rebuttal evidence. Once the court determines a material dispute exists, the decision to issue notice rests on its assessment of the factual dispute before it. Overall, this standard requires more evidence than Lusardi, which can reduce the pressure employers feel to settle that has traditionally accompanied conditional certification.
Fifth and Sixth Circuit Approach
Like the Seventh Circuit, the Fifth and Sixth Circuits have moved away from the traditional Lusardi standard.
In the Fifth Circuit (Swales v. KLLM Transport Services LLC), plaintiffs must meet a more demanding one-step test, showing it is "more likely than not" that employees are similarly situated. When crafting this standard in Swales, the Fifth Circuit noted the more lenient Lusardi approach resulted in broad circulation of conditional class notice to plaintiffs who were not truly similarly situated. This was frequently used as leverage against employers to compel them to settle. Similar to the Seventh Circuit, the Fifth Circuit now requires lower courts to vet plaintiffs at the outset of litigation and consider all available evidence before authorizing class notices. This standard is far more favorable to employer/defendants.
In the Sixth Circuit (Clark v. A&L Homecare and Training Center, LLC), plaintiffs must demonstrate a "strong likelihood" that the proposed group is similarly situated. The Sixth Circuit rejected the "more likely than not" standard as too high of a bar for plaintiffs, but found the Lusardi approach too lenient. Thus, in the Sixth Circuit, a plaintiff must make a showing that goes beyond creating a genuine issue of fact, but it need not rise to the level of "more likely than not" or a "preponderance". Accordingly, the standard of proof in the Sixth Circuit falls between Lusardi and Swales.
The Supreme Court Denies Certiorari in Richards
In Richards, Eli Lilly submitted a petition for certiorari—which was joined by several amici—arguing that it was critical the Supreme Court resolve the growing circuit split in class certification standards. Last week, however, the Supreme Court denied certiorari. Richards will now head back to the district court, which will likely apply the new Seventh Circuit standard to determine class certification.
What Employers Need to Know
The Supreme Court's refusal to hear argument in Richards leaves a variance in class certification standards across jurisdictions. While most federal courts continue to apply the Lusardi approach—a relatively low bar for plaintiffs to obtain condition certification—recent decisions in the Fifth, Sixth, and Seventh Circuits have created stricter, more employer-friendly standards. These varying criteria will almost certainly have the strategic effect of encouraging collective action plaintiffs to file suit—if jurisdictionally possible—in circuits other than the Fifth, Sixth, and Seventh. Until the Supreme Court provides definitive guidance, employers must remain aware of the disparate standards and procedures that accompany collective action lawsuits across the country. Employers seeking more information may contact Sheppard Mullin's Labor and Employment team for additional insights and strategies.
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