The Sixth Circuit has announced new standards for collective action lawsuits under the FLSA in Clark v. A&L Homecare and Training Center.  There are already many good summaries of this decision around the legal internet, so this recap will be short.  The question is how to determine whether other potential plaintiffs are “similarly situated” so that the district court should issue a formal notice to those potential plaintiffs about the claims.  Though this notice does not endorse the lawsuit, it has the inevitable effect of significantly bolstering both the number of plaintiffs and their bargaining position.  The majority opinion holds that the two-step “certification” approach that district courts have applied for 35 years (which began with Lusardi v. Xerox, 118 F.R.D. 35 (D.N.J. 1987)) is not grounded in the statute and does not incorporate the Supreme Court’s guidance on the subject.  It also rejects the Fifth Circuit’s new FLSA standard in Swales v. KLLM Transport Services, 985 F.3d 430 (5th Cir. 2021). 

Judge Kethledge’s opinion demands more a rigorous analysis than the “modest showing” of similarity required by Lusardi.  It explains that “similarity” requires a “factbound” analysis that can only be made after notice and after other plaintiffs are subject to discovery.  To obtain notice, however, the court adopts the “strong likelihood” standard from preliminary injunctions, holding 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.  That standard 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.”  Courts should also consider arbitration agreements when deciding whether to authorize notice.

In a concurrence, Judge Bush notes that the circuit’s new standard “may significantly lengthen” the notification process.  He then opines that equitable tolling should be available under FLSA actions to avoid “deplet[ing] remedies that Congress has duly provided.”  Judge Bush suggests that tolling “should be recognized by analogy to class actions.” 

Judge White gently chides the majority for overturning a framework “reflects years of dialogue among district and appellate courts.”  But she also says the new standard is “not unreasonable” and appreciates “the majority’s desire to clarify the notice standard.”  She agrees with Judge Bush that equitable tolling should be available “to would-be opt-in plaintiffs.”  The majority opinion does not mention equitable tolling, but the agreement on the issue between Judge Bush and Judge White is a strong hint to district courts.

In sum, FLSA plaintiffs will likely have a harder time persuading district courts to issue notice of the lawsuit to other potential plaintiffs.  Many of the common factual and legal battles, perhaps including discovery issues, will now be front-loaded so trial courts can decide if plaintiffs have met the “strong likelihood” standard.