On Friday, a divided Sixth Circuit addressed the proper standard for determining what “other employees” are “similarly situated” and should be notified of a FLSA collective action and given the opportunity to join the lawsuits as plaintiffs. Clark v. A&L Homecare and Training Center, LLC, No. 22-3101 (6th Cir. 2023). The scope of the notification of “other employees” can involve hundreds of employees (and “potential plaintiffs”) and often forces defendant employers to settle the lawsuit prior to any discovery or evaluation of the merits or similarly situatedness. The Court’s majority rejected the prevailing lax standard first utilized in New Jersey and the Fifth’s Circuit’s recent, more stringent preponderance of the evidence standard. Instead, the Court determined 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 is similar to the standard already used in preliminary injunction hearings, which is less than a preponderance of the evidence standard, but higher than a summary judgment standard. The plaintiffs will bear the burden of proving similarly situatedness. The Court also rejected the employer’s arguments that individualized defenses – such as the existence of arbitration agreements or expired limitations period -- of “other employees” would necessarily prevent them from being similarly situated and exclude them from notification, but those defenses should be considered when evaluating whether they are similarly situated.
The lawsuit was brought by former home health aides who
alleged that they were not paid for all overtime hours worked and were under
reimbursed for travel expenses, thereby unlawfully reducing their minimum
wages. Under the FLSA, employees may
bring suit on behalf of themselves and other employees similarly situated. The other
employees must give written consent to joining the lawsuit. The Supreme Court had held that a trial court
has discretion to notify these other potential plaintiffs of the lawsuit in
appropriate cases. FLSA collective
actions are not Civil Rule 23 class actions because the “other employees” who
elect to join the lawsuits become party plaintiffs, just like the original
plaintiffs. The original plaintiffs are
not class representatives.
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. . . . . What the notice determination undisputedly shares in common with a preliminary-injunction decision, rather, is the requirement that the movant demonstrate to a certain degree of probability that she will prevail on the underlying issue when the court renders its final decision.
We adopt that part of the preliminary-injunction standard here; and 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. See, e.g., id. 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. The strong-likelihood standard is familiar to the district courts; it would confine the issuance of court-approved notice, to the extent practicable, to employees who are in fact similarly situated; and it would strike the same balance that courts have long struck in analogous circumstances.
In applying this standard, district courts should expedite their decision to the extent practicable. The limitations period for FLSA claims typically is two years. 29 U.S.C. § 255(a). If the plaintiffs in an FLSA suit move for court-approved notice to other employees, the court should waste no time in adjudicating the motion. To that end, a district court may promptly initiate discovery relevant to the motion, including if necessary by “court order.” Fed. R. Civ. P. 26(d)(1).
. . .
As for the plaintiffs’ argument itself, “the different defenses to which the plaintiffs may be subject” is already a factor when determining whether other employees are similarly situated to the original plaintiffs. . . . And for that purpose a defense based on an alleged arbitration agreement is a defense like any other. The parties can present whatever evidence they like as to such a contention; the district court should consider that evidence along with the rest in determining whether the plaintiffs have made the requisite showing of similarity. Moreover, to be clear, “[e]mployees bear the burden of satisfying this requirement.” Id. A defense based on putative arbitration agreements does not shift that burden more than any other defense does.
. . . The very point of the “similarly situated” inquiry is to determine whether the merits of other-employee claims would be similar to the merits of the original plaintiffs’ claims—so that collective litigation would yield “efficient resolution in one proceeding of common issues of law and fact arising from the same alleged discriminatory activity.” Hoffman-LaRoche, 493 U.S. at 170. Thus, on remand, the district court should consider the parties’ evidence as to arbitration agreements along with all the other evidence in determining whether the plaintiffs have met the strong-likelihood standard.
Finally, as to the plaintiffs’ remaining argument, a limitations defense is likewise a defense like any other for purposes of determining similarity. Hence the district court should consider the parties’ respective showings on that issue when making its notice determination on remand.
The dissent argued that the Court’s new standard will make it
too difficult for plaintiffs and employees to pursue their right to unpaid
wages, but agreed with the rejection of the Fifth Circuit’s new standard. The
concurring opinion asserted that equitable tolling of the limitations period
should apply to the claims of “other employees.”
NOTICE: This summary is designed merely to inform and alert
you of recent legal developments. It does not constitute legal advice and does
not apply to any particular situation because different facts could lead to
different results. Information here can change or be amended without notice.
Readers should not act upon this information without legal advice. If you have
any questions about anything you have read, you should consult with or retain
an employment attorney.
