FLSA Collective Action: Erosion of Lusardi Two-Step Certification, Alternative Standards, Circuit Split

Description

The Fifth and Sixth Circuit court decisions in Swales and Clark have broken away from the Lusardi two-step certification method for FLSA collective actions and created alternative standards that have also begun to be adopted by district courts in other circuits.

Under the more lenient Lusardi approach, courts conditionally certify a collective action with a minimal showing by plaintiffs that potential collective members are similarly situated. However, in Swales v. KLLM Transport Services L.L.C. (2021), the Fifth Circuit rejected Lusardi and established a new standard whereby district courts should identify at the outset of the litigation the facts and legal considerations to determine whether potential collective members are similarly situated; authorize preliminary discovery necessary to make the similarly situated determination; and rigorously scrutinize the available evidence to determine whether and to whom notice should issue.

Furthermore, in Clark v. A&L Home Care and Training Center L.L.C. (2023), the Sixth Circuit also rejected Lusardi but declined to accept the Swales standard. The court found that deciding whether to issue notice was analogous to the decision of whether to grant a preliminary injunction, and it adopted a standard wherein plaintiffs must show a "strong likelihood" that other employees are similarly situated to the plaintiffs before the court issues notice.

The Swales and Clark decisions have created a circuit split. These decisions have also begun to influence jurisprudence in other circuits. District courts in the Fourth and Eleventh Circuits have adopted the Swales standard, creating a split within those circuits. And the Seventh Circuit is currently examining what should be the applicable standard.

Listen as our expert panel examines the state of FLSA collective action certification after Swales and Clark. The panel will discuss the impact those decisions may have on FLSA collective action litigation strategy moving forward for plaintiff and defense counsel and describe best practices for practitioners.