Sixth Circuit Rejects Traditional Certification Process in FLSA Collective Actions, Deepening Circuit Court Divide

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In Clark v. A&L Homecare & Training Ctr., LLC, 68 F.4th 1003 (6th Cir. 2023), the Sixth Circuit Court of Appeals recently created a new standard for its district courts to employ when determining whether to authorize notice in Fair Labor Standards Act (FLSA) cases, or what other Circuits typically refer to as the “conditional certification” phase of a FLSA collective action.  In fact, the Sixth Circuit altogether rejects characterization of this notice stage as “certification” of anything, conditional or otherwise, noting that the term is borrowed from Rule 23’s governance of class actions, which are “fundamentally different” from FLSA collective actions.

Sixth Circuit’s New Standard

Rather than adopt the widely applied “two step” conditional certification process first set forth in Lusardi v. Xerox Corp., 118 F.R.D. 351, 361 (D.N.J. 1987), and subsequently adopted and followed by district courts in the majority of Circuits, including the First, the Clark court created a new heightened “strong likelihood” standard.

The Clark court borrowed its new standard from one prong of the preliminary injunction standard applied by federal courts. “A district court’s determination to facilitate notice in an FLSA suit is analogous to a court’s decision whether to grant a preliminary injunction. Both decisions are provisional, in the sense that the court renders a final decision on the underlying issue (whether employees are ‘similarly situated’ here, success on the merits there) only after the record for that issue is fully developed; yet both decisions have immediate consequences for the parties.”

Acknowledging that three of the four prongs of the preliminary injunction standard are “inapposite” to whether a court should authorize notice, the Clark court found that the fourth prong (the movant must demonstrate to a certain degree of probability that she will prevail on the underlying issue when the court renders its final decision) is what plaintiffs must demonstrate to trigger notice to other employees under the FLSA. “We hold that, for a district court to facilitate notice of an FLSA suit to other employees, the plaintiffs must show a ‘strong likelihood’ that those employees are similarly situated to the plaintiffs themselves.”

This new standard raises the bar for plaintiffs at this stage, where previously (and elsewhere) plaintiffs could make a modest factual showing of the existence of any other similarly situated employees to “conditionally certify” the collective and proceed with notice.  The widely used two-step conditional certification process has long been criticized by the defense bar for arming plaintiffs with far too much leverage before any discovery has taken place, thus placing extreme pressure on defendants to settle FLSA collective actions at an early juncture. In fact, the two-step standard often feels, in practice, less like a hurdle for plaintiffs to overcome and more like a rubber-stamping.

Growing Circuit-Level Divide on FLSA Certification

With Clark, we now see several conflicting standards in use throughout the various Circuits. The Fifth Circuit similarly rejected the Lusardi two-step standard, but in favor of a heightened standard that is arguably more stringent than Clark’s “strong likelihood” standard.  See Swales v. KLLM Transport Services, L.L.C., 985 F.3d 430, 434 (5th Cir. 2021). Clark, in fact, rejected both the Lusardi two-step approach as well as the Swales standard.  The majority of courts are still following the two-step approach, including the First Circuit.

At the time of this blog post, no district courts in the First Circuit have considered (in a published decision at least) the Clark standard, but it seems only a matter of time before a defendant advocates for its application.  What will the First Circuit decide when confronted with the competing standards? We will continue to watch what happens on this front, as this issue appears ripe for ultimate SCOTUS review.

Written by former litigation partner, Katherine S. Kayatta.