Sixth Circuit Creates a Novel Standard for Fair Labor Standards Act Lawsuits in Ohio, Michigan, Kentucky, and Tennessee

Federal law authorizes employees to sue for violations of the Fair Labor Standards Act (FLSA) on behalf of themselves and also those “similarly situated” to them. Over 30 years ago, the Supreme Court recognized that, at least in some circumstances, district courts have discretion to “facilitate” notice of pending litigation to employees who may be “similarly situated” to the plaintiff — meaning that they worked for the same employer in a similar role during the relevant time period, while being harmed by the same allegedly unlawful policies or practices.1 As a practical matter, this typically involves the plaintiff’s attorney or a third-party administrator sending court-approved notices of the lawsuit to a defendant’s employees using the contact information the defendant has been ordered to provide. However, the Supreme Court has never explained what a plaintiff must show before a court that may authorize such notices.

The timing and circumstances under which a district court authorizes notice to be issued are significant for two main reasons:

  • First, unlike in a traditional class action, in which all class members automatically participate unless they affirmatively opt out, a “collective action” brought under the FLSA requires every would-be participant to affirmatively opt in to the lawsuit.
  • Second, sending notice of a lawsuit to potential opt-in plaintiffs can increase the number of participating plaintiffs by a hundredfold or more, placing significant settlement pressure on the defendant. Indeed, most FLSA cases settle soon after the court approves issuing notice to potential opt-ins.

The Sixth Circuit’s Decision

Recently, the U.S. Court of Appeals for the Sixth Circuit — which hears appeals from the federal district courts in Ohio, Michigan, Kentucky, and Tennessee — became one of the few circuit courts to weigh in on the important question of what a plaintiff needs to show before notice of a pending FLSA lawsuit may be sent to potential participants.

In Clark v. A&L Homecare & Training Center, LLC, a divided panel of the Sixth Circuit ruled that the district court had been too quick to authorize notice, and in so doing created a new evidentiary standard for authorizing notice in FLSA cases.2 Referencing the familiar preliminary injunction standard, the Sixth Circuit concluded that plaintiffs seeking the court’s assistance in facilitating notice of an FLSA suit “must show a ‘strong likelihood’ that those employees are similarly situated to the plaintiffs themselves.”

Impacts of the New Standard

As a practical matter, this decision should make it somewhat more difficult for plaintiffs within the Sixth Circuit to obtain authorization to send notice to potential opt-in plaintiffs, at least until the parties have an opportunity to engage in limited discovery.

The Clark case is also significant in that it highlights the extent to which the important question of how a district court should evaluate whether to facilitate notice in an FLSA case remains an unsettled question of law nationally. In the absence of guidance from the appellate courts, most district courts across the country have used some version of a two-step approach first articulated by a district court in New Jersey in 1987.3 Under this so-called Lusardi test, courts will first “conditionally certify” a putative collective action if the plaintiff makes a “modest” or “fairly lenient” evidentiary showing that other employees are similarly situated to the plaintiff. Then, after the parties have completed merits discovery, the court will decide whether to grant “final certification” of the collective or to “decertify” it, based on a more rigorous analysis of whether the members of the collective are, in fact, similarly situated.

Lusardi’s dominance began to wane in 2021, when the U.S. Court of Appeals for the Fifth Circuit rejected Lusardi and instructed the district courts in Texas, Louisiana, and Mississippi to “rigorously scrutinize the realm of ‘similarly situated’ workers, and . . . do so from the outset of the case, not after a lenient, step-one ‘conditional certification.’”4

A National Standard?

Notably, all three members of the Sixth Circuit’s panel in Clark wrote separately to express their views about how a court should consider whether to facilitate notice in FLSA cases, and none expressed support for either Lusardi or Swales. As such, it is very likely that other circuit courts – and perhaps eventually the Supreme Court – will eventually weigh in on this topic as well.

For questions about how to ensure that workplace policies comply with applicable laws, contact an attorney in the Wage and Hour Law team.

1 See Hoffmann-La Roche v. Sperling, 493 U.S. 165 (1989). This case arose under the Age Discrimination in Employment Act, but it has been widely applied in FLSA cases as well.
2 No. 22-3101, 2023 WL 3559657 (6th Cir. May 19, 2023).
3 See Lusardi v. Xerox Corp., 118 F.R.D. 351, 361 (D.N.J. 1987).
4 Swales v. KLLM Transp. Servs., L.L.C., 985 F.3d 430, 433 (5th Cir. 2021). The U.S. Court of Appeals for the Seventh Circuit has also recognized that courts should not facilitate notice where the defendant proves by “a preponderance of the evidence” that the relevant employees signed valid arbitration agreements. Bigger v. Facebook, Inc., 947 F.3d 1043 (7th Cir. 2020).

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