Fifth Circuit Requires "Rigorous Scrutiny" Before District Courts Authorize Notice In FLSA Collective Actions

Published date02 April 2021
Subject MatterEmployment and HR, Litigation, Mediation & Arbitration, Discrimination, Disability & Sexual Harassment, Employee Benefits & Compensation, Trials & Appeals & Compensation
Law FirmJones Day
AuthorMs Joanne Bush, Wendy Butler, Elizabeth L. Dicus, Craig S. Friedman, Brian Jorgensen, Brent D. Knight, Matthew W. Lampe and Elizabeth B. McRee

In Short

The Situation: A district court in the Fifth Circuit granted conditional certification under the Fair Labor Standards Act ("FLSA") to a class of allegedly misclassified truck drivers, analyzing certification using the widely used and rarely reviewed two-step Lusardi approach. However, the court sua sponte certified its decision for interlocutory appeal given the inconsistencies in how district courts have evaluated collective action treatment under the FLSA.

The Result: On review, the Fifth Circuit rejected the two-step Lusardi approach to evaluating collective action certification, holding instead that district courts must "rigorously scrutinize the realm of 'similarly situated' workers ... at the outset of the case[.]" Swales v. KLLM Transportation Services, L.L.C., --- F.3d ---, 2021 WL 98229, at *2 (5th Cir. Jan. 12, 2021).

Looking Ahead: Following Swales, district courts in the Fifth Circuit likely will take on a stricter gatekeeping role before certifying collective actions, and litigants outside the Fifth Circuit should consider the persuasiveness of Swales when developing strategy for the defense of putative collective actions.

Issuing Notice in FLSA Collective Actions

The FLSA authorizes employees to sue for minimum wages or overtime compensation "for and in behalf of ... themselves and other employees similarly situated." 29 U.S.C. ' 216(b). Section 216(b) neither defines "similarly situated" nor sets out procedural requirements for proceeding collectively, and the Supreme Court has provided limited guidance. As a result, federal district courts largely have been left to define the contours of collective action proceedings with limited circuit court review; such certification orders are not final orders subject to immediate review, and such cases often settle before final judgment.

Two predominant methods of assessing collective action certification have emerged. An overwhelming majority of courts follow the two-step approach announced in Lusardi v. Xerox Corp., 118 F.R.D. 351, 359 (D.N.J. 1987). During the first step'the so-called "notice" step'the court performs a very lenient "similarly situated" review early in the case, often based only on pleadings and (sometimes) limited affidavit evidence, to determine whether the named plaintiffs have shown they are similar enough to the putative collective action members that notice should issue inviting members of the putative collective action to opt in to the litigation. If the named plaintiff(s) clear the first step's hurdle, the court authorizes notice to all putative...

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