A Fair Labor Standards Act (“FLSA”) case is working its way through the Sixth Circuit and could have serious ramifications for plaintiff-side employment law practitioners in the Sixth Circuit.  In this post, we discuss the potential sea change a decision in In re: A&L Home Care and Training Center, et al. could effect in the Sixth Circuit’s jurisprudence on certification of collectives in the FLSA context.

Lusardi v. Xerox Corp., 118 F.R.D. 351 (D.N.J. 1987) set out the ubiquitous two-step process for certifying collectives under FLSA:  a conditional certification stage and a final certification stage.  It is this standard that Defendants asked a motions panel of the Sixth Circuit to consider in deciding whether to grant interlocutory review of the District Court’s decision.

Judge McFarland, sitting in the Southern District of Ohio, had the first bite at the apple.  In his thorough opinion, Judge McFarland provided a helpful explanation of how the bifurcated Lusardi process typically works. First, conditional certification “takes place at the beginning of discovery” and, in this stage, “plaintiffs need only make a modest factual showing that they are similarly situated to the proposed class of employees.” This standard is “fairly lenient and usually results in conditional certification of a representative class.”  Once a conditional class is certified, plaintiffs “may send opt-in notices to current and former employees who potentially satisfy the definition of the collective.”  In the second stage, after discovery concludes, courts examine the conditional class more closely and employ stricter standards beyond “simple allegations and affidavits to demonstrate similarity.”

Defendants asked Judge McFarland to join the Fifth Circuit in abandoning Lusardi. In Swales v. KLLM Transport Services, L.L.C. 985 .3d 430 (5th Cir. 2021), Judge Willet applied a thoroughly textualist reading of the FLSA, noting that “‘certification,’ much less ‘conditional certification,’ appears nowhere in FLSA.”  According to Judge Willet, the FLSA commands district courts to (1) only allow “similarly situated” individuals to opt-in to collective litigations and (2) not signal approval on the merits in class certification.  In Judge Willet’s view, Lusardi flouts the plain text of the FLSA in modifying those two conditions.  Moreover, Judge Willet reasons, “similarly situated” is a rigorous standard.  Here Judge Willet faults Lusardi again for construing “similarly situated” as a lenient standard at the conditional certification stage.

Judge McFarland declined Defendants request to abandon Lusardi. As Judge McFarland noted, the Sixth Circuit, “it is true, does not appear to have expressly adopted Lusardi, although the circuit has acknowledged that district courts use the bifurcated certification framework.” And, Judge McFarland continued, “the circuit has recognized that the evidentiary standard at the conditional stage is fairly lenient.” (quotation marks omitted). Because “this district routinely appl[ies] the two-step process in FLSA cases[,]” Judge McFarland concluded his hands were tied.  “[A]bsent contrary direction from the Sixth Circuit,” Judge McFarland agreed to “follow the two-step process.”

Critically, however, because “Defendants’ challenge of two-step certification raise[d] issues that merit[ted] the Sixth Circuit’s attention,”  Judge McFarland certified the case for “conditional certification of the collective actions for immediate review under 28 U.S.C. sec. 1292(b) (“1292(b)”).”  1292(b) grants appellate courts discretion to hear an order certified for interlocutory appeal by the district court if three elements are met: “(1) the order involves a controlling question of law; (2) an immediate appeal may materially advance the ultimate conclusion of the litigation; and (3) a substantial difference of opinion exists regarding the correctness of the decision.”

In granting the interlocutory appeal, a Sixth Circuit motions panel (consisting of Chief Judge Sutton, Judge Griffin, and Judge Nalbandian) agreed with Judge McFarland “that the statutory factors support review of these issues,” and cited to Judge McFarland’s analysis of Lusardi and Swales.  In so doing, the Sixth Circuit followed a familiar pattern of accepting interlocutory review of a decision that the district court itself certified as worthy of the Sixth Circuit’s immediate attention pursuant to 1292(b).

The Sixth Circuit’s local rules do not say whether the judges on the motions panel will also serve on the merits panel.  But, in our experience, that is not the Sixth Circuit’s typical practice.  Generally, a merits panel consists of a different group of randomly selected judges.  In any event, whoever ultimately serves on the merits panel, it’s fair to say that Lusardi’s viability in the Sixth Circuit is in limbo pending a decision on the merits.

If the merits panel finds Judge Willet’s opinion persuasive, then plaintiffs will have to meet a higher standard to establish a collective and get discovery under the FLSA.  And regardless of what the Sixth Circuit decides, there seems significant potential here for a successful cert petition down the road.