The Sophisticated Employer Blog

In an apparent win for employers, the U.S. Court of Appeals for the Sixth Circuit issued an opinion on May 19 in Clark et al. v. A&L Homecare and Training Ctr, et al., Case No. 22-3101/3102, adopting a heightened standard for district courts to facilitate notice to “other employees” in actions under the Fair Labor Standards Act of 1938 (FLSA).

The ruling will likely result in federal district courts more strictly reviewing and potentially limiting putative collective actions to employees who are legitimately, and not just arguably, likely to be found “similarly situated” to the other plaintiffs. 

In issuing its decision, the appellate court rejected both the lenient standard for “conditional certification,” which requires only a modest factual showing that employees are similarly situated to the original plaintiffs, and the stricter approach of the U.S. Court of Appeals for the Fifth Circuit, which requires a final determination of substantial similarity before facilitating notice of the suit to other employees.

The Sixth Circuit adopted a middle-ground approach akin to the standard for granting a preliminary injunction. Under this approach, for a district court to facilitate notice of an FLSA suit to other employees, the plaintiffs must show a “strong likelihood” that those employees are similarly situated to the plaintiffs themselves. 

The FLSA mandates that employers pay a federal minimum wage and overtime to certain types of employees. 29. U.S.C. §§ 206(a), 207(a). Employees can sue for alleged violations of these mandates on “behalf of … themselves and other employees similarly situated.” 29 U.S.C. § 216(b). But “[n]o employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which the action is brought.” Id. 

Therefore, “similarly situated” other employees only become parties to an FLSA suit if they affirmatively choose to do so. This is typically facilitated by a court-approved notice of an FLSA suit to “other employees” as potential plaintiffs. 

In its analysis, the appellate court rejected the characterization of the widely-accepted “conditional certification” approach adopted first in Lusardi v. Xerox Corp., 118 F.R.D. 351 (D.N.J. 1987), noting that the term “certification” is borrowed from Fed. R. Civ. P. 23, which governs whether a case may proceed as a class action. Distinguishing FLSA collective actions from Rule 23 class actions, the appellate court held the term “certification” has no place in FLSA actions for multiple reasons: plaintiffs in FLSA collective actions must affirmatively join the suit, rather than being part of a representative class, and courts do not certify an FLSA class under § 216(b) but simply add parties to the suit.

Additionally, the appellate court highlighted issues with the competing approaches advocated by the parties, the fairly lenient “conditional certification” and the stricter “substantial similarity” approaches. In particular, under the fairly lenient standard, the appellate court noted the potential for notice sent to employees who are not, in fact, eligible to join the suit, to amount to solicitation of those employees to bring suits of their own.  Additionally, under the stricter standard, the appellate court noted the practical difficulty of conclusively determining that employees who are not present in the case are “similarly situated,” which depends on fact-specific considerations related to the employees such as tasks performed, applicable policies or individual defenses like arbitration agreements.

In adopting the strong likelihood approach, the appellate court recognized that a district court’s determination to facilitate notice in an FLSA suit is analogous to a court’s decision whether to grant a preliminary injunction. Specifically, both decisions are provisional, as the court does not render a final decision on the underlying issue until after the record for that issue is fully developed, and both decisions have immediate consequences for the parties.

Further, the appellate court noted the undisputable commonality between notice determination and preliminary injunction decisions: the requirement that the party moving for the relief demonstrate to a certain degree of probability that they will prevail on the underlying issue when the court renders its decision. 

Under this standard, the plaintiffs in an FLSA action must show a “strong likelihood” that other employees, to whom they seek issuance of court-approved notice, are similarly situated to the plaintiffs themselves. This requires a showing greater than the one necessary to create a genuine issue of fact, but less than the one necessary to show a preponderance of the evidence.  The appellate court directed district courts applying this standard to “expedite their decision to the extent practicable” and to “waste no time in adjudicating” motions for court-approved notice to other employees in an FLSA suit. In furtherance of that guidance, the appellate court noted that a district court may promptly initiate discovery relevant to the motion, including if necessary by court order under Fed. R. Civ. P. 26(d)(1). 

Again, this decision is largely a win for employers, who can expect district courts to scrutinize more strongly and limit the members of a putative collective-action to those employees who are legitimately, and not just arguably, likely to be found as “similarly situated” as the other plaintiffs.  However, employers should be prepared to engage in fact-intensive analysis with their counsel to highlight the distinctions among the plaintiffs and the putative collective-action members, as this decision will inevitably result in more contentious early motion practice.

Employers would also benefit from reviewing job descriptions, job responsibilities, applicable policies related to timekeeping and compensation, and other objective criteria that will be utilized in the similarly situated analysis.