Client Alerts
May 24, 2023

Sixth Circuit Heightens Standard for Sending Notices in FLSA Collective Actions

Stites & Harbison Client Alert, May 24, 2023

The Sixth Circuit has significantly altered the way in which Fair Labor Standards Act (FLSA) collective actions are to be litigated in Kentucky, Ohio, Tennessee, and Michigan. Rejecting the lenient standard for sending notices of the litigation to non-party employees that district courts have applied for decades, the Sixth Circuit in Clark v. A&L Homecare & Training Ctr., LLC, No. 1:20-CV-00757, 2023 WL 3559657, (6th Cir. May 19, 2023), held that plaintiffs now must show a “strong likelihood” that other employees are similarly situated to themselves in order for the court to send notice of the FLSA suit to those other employees.

The FLSA requires employers to pay a federal minimum wage and overtime to certain employees. 29 U.S.C. §§ 206(a), 207(a). Though the FLSA permits employees to sue for alleged violation “on behalf of . . . themselves and other employees similarly situated,” the Act also states that “[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 such action is brought.” Id. In 1989, the Supreme Court held that § 216(b) grants courts the implied power to “facilitat[e] notice” of FLSA suits to “potential plaintiffs” in order to attain those potential plaintiffs’ “consent in writing to become such a party.” Hoffman-La Roche v. Sperling, 493 U.S. 165, 169 (1989). But the Hoffman-La Roche Court did not elaborate on the circumstances that may justify a district court sending such a notice.

For the past 30 years, most district courts—including those in the Sixth Circuit—have applied a two-step approach first described in Lusardi v. Xerox Corp., 118 F.R.D. 351, 361 (D.N.J. Nov. 5, 1987). Under step one, a plaintiff must present a “modest factual showing” that he or she is “similarly situated” to other employees. If the plaintiff satisfies this lenient first step, the district court “conditionally certifies” the collective, facilitates sending notice of the plaintiff’s FLSA suit to other employees, and permits those employees the opportunity to opt in to the suit. See, e.g., Noble v. Serco, Inc. (E.D. Ky. Sep. 28, 2009). Under step two, after notice has been provided, other employees have opted in to the suit, and the parties have engaged in full merits discovery—an expensive and time consuming endeavor—the court more closely examines whether the opt in plaintiffs are, in fact, similarly situated to the original plaintiff. See, e.g., Hathaway v. Masronry, No. 5:11-CV-121, 2013 WL 1878897, at *2-5 (W.D. Ky. May 3, 2013). If the court is satisfied that the opt-in plaintiffs are similarly situated to the original plaintiff, the court grants “final certification” and permits the case to proceed as a collective action. See id.

In Clark, a group of Ohio home-health aides brought a collective FLSA action against their employer and asked the court to facilitate notice to other employees whom they alleged to be similarly situated. The district court followed the Lusardi approach and granted “conditional certification” of the class after concluding that the group had provided a “modest factual showing” of similarity. But on interlocutory appeal under 28 U.S.C. § 1292(b), a divided Sixth Circuit rejected the Lusardi approach’s lenient standard for sending notices. Instead, the majority held that the district court should have required a showing of a “strong likelihood” that the other employees identified by the original plaintiffs were similarly situated to the original plaintiffs. The Sixth Circuit also eschewed any use the of terms “certification” or “conditional certification” in FLSA collective actions, in order to avoid any confusion with Rule 23 class actions.

Borrowed from the standard for obtaining a preliminary injunction, the majority explained that a “strong likelihood” 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.” In so holding, the Sixth Circuit noted that the low “modest factual showing” evidentiary burden under step one of the Lusardi approach often unduly pressured defendant employers to settle, as they were faced with an expansion of “plaintiffs’ ranks a hundredfold” before the district court even determined if the employees to whom notice was sent are actually similarly situated to the original plaintiffs. Nonetheless, the Sixth Circuit also recognized that a district court often cannot conclusively determine whether employees are “similarly situated” to the plaintiffs without their presence in the case. As a result, the Sixth Circuit rejected the Fifth Circuit’s recent holding in Swales v. KLLM Transport Services, L.L.C., 985 F.3d 430 (5th Cir. 2021), that court-approved notice may be sent only to employees who are “actually” similarly situated to the original plaintiffs.

Thus, the Sixth Circuit seemed to try to take a middle ground approach by adopting a higher standard than the lenient Lusardi step one, but less than the actual similarity required by Swales. And as the dissent noted, the Sixth Circuit majority’s holding altered only the standard which plaintiffs must reach before court-approved notices are sent, and still seems to contemplate a two-step process in which notice is sent before a final similarity determination is made by the district court.

The “strong likelihood” heightened standard takes effect immediately and may provide employers additional opportunities to prevent a single-plaintiff case from turning into a collective action. Stites & Harbison employment attorneys can advise you regarding your obligations under the FLSA, assist with training managers and human resource professionals, and help you defend against FLSA single and collective actions.

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