On January 12, 2012, the United States Court of Appeals for the Fifth Circuit announced a new certification standard for collective actions under the Fair Labor Standards Act (FLSA).  The appellate court vacated a grant of conditional certification, ruling that at the outset of the case district courts “must rigorously scrutinize” whether potential opt-in plaintiffs are similarly situated.  This standard requires the court identify the material facts and legal considerations needed to decide whether employees are similarly situated and authorize limited discovery on these issues before deciding conditional certification and authorizing class notice.

The Fifth Circuit’s decision explicitly rejects the widely-used two-step FLSA certification process consisting of “conditional certification”—where plaintiffs must, in essence, allege only that potential plaintiffs are subject to an unlawful common policy or practice, with the court revisiting the certification after discovery to make a final decision as to whether plaintiffs and opt-ins are similarly situated. 

While this ruling is presently binding on district courts in the Fifth Circuit, time will tell if other circuits will adopt this heightened standard and whether the United States Supreme Court will weigh-in on the issue.