Sixth Circuit Announces Stricter Standard For Sending Notice In FLSA Collective Actions

• Published date: 08 June 2023
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution, Class Actions
• Law Firm: Dickinson Wright PLLC
• Author: Mr Joshua Burgener and M. Reid Estes, Jr.

A recent court opinion from the Sixth Circuit Court of Appeals clarified an important point of law concerning the Fair Labor Standards Act ("FLSA"), specifically what "showing ... is necessary for a district court to facilitate notice of an FLSA suit to employees who were not originally parties" to the lawsuit. This case, Clark v. A&L Homecare and Training Center, L.L.C. (6th Cir. 2023), applies to FLSA litigation in Kentucky, Michigan, Ohio, and Tennessee (which comprise the Sixth Circuit) and adds a third standard that district courts across the country will use to decide whether to send notice in FLSA cases. Let's unpack what all this means and how this new standard will affect FLSA litigation in the Sixth Circuit and across the country.

Background: Competing Standards

Until recently, the generally accepted standard for deciding whether individuals were "similarly situated" was lenient. First articulated by the District of New Jersey in Lusardi v. Xerox Corp, 975 F. 2d 964 (3d Cir. 1992), courts adopted a two-step approach to this question: first, at a stage called "conditional certification," a federal district court would facilitate notice of the suit to other employees upon a "modest factual showing" that the proposed class members were "similarly situated" to the original plaintiffs. Only later, after the completion of discovery, would the Court take a closer look at whether the new employees were similarly situated to the original plaintiffs, i.e., the decertification stage.

In its 2021 Swales v. KLLM Transport Services, L.L.C., 410 F. Supp. 3d 786 (5th Cir. 2021)opinion, the Fifth Circuit discarded the Lusardi standard and articulated a new approach requiring plaintiffs to show they were "actually similar" to the class to whom notice was sent. Under this approach, district courts would not be permitted to approve notice be sent to prospective FLSA plaintiffs unless the employees were "actually similar" to the named plaintiffs. The defendants in Clark specifically asked the Sixth Circuit to adopt the more stringent Swales standard. Instead, the Court articulated a new standard altogether, adding another layer of complexity to this area of law.

The Sixth Circuit Weighs In

In its opinion issued on May 19, 2023, the Sixth Circuit adopted a "middle course," repudiating both the "fairly lenient" Lusardi standard while also rejecting the "actually similar" Swales standard. Specifically, the Court held that "for a district court to facilitate...