FLSA Collective Actions: Fifth Circuit Finally Puts Horse Before the Cart

Federal courts have long struggled with the “unique species of group litigation” created by the Fair Labor Standards Act (“FLSA”). 7B Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1807 (2007). “Unlike other employment-discrimination class suits under Title VII or the Americans with Disabilities Act that are governed by Rule 23 [of the Federal Rules of Civil Procedure], actions on behalf of individuals claiming that employers violated the FLSA are brought as ‘collective actions’ under the statute.” Id.

The FLSA says an action may “be maintained against any employer … in any Federal or State court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated.” 29 U.S.C § 216(b) The Act further provides that “[n]o employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought.” Id.

The requirement that potential plaintiffs “opt-in” to the collective action is the primary feature distinguishing FLSA collective actions from class actions subject to Rule 23. Rule 23 requires putative class members to opt out if they do not wish to be bound by the outcome of the class action. See Fed.R.Civ.P. 23(c)(2)(B)(“For any class certified under Rule 23(b)(3), the court must direct to class members the best notice practicable under the circumstances … that the court will exclude from the class any member who requests exclusion….”).

Unlike Rule 23, however, the FLSA does not set forth a procedure for litigating collective actions. It has thus been left up to the courts to adopt a procedure for such actions. Until the January 12, 2021 decision by the Fifth Circuit in Swales v. KLLM Transport Services, Inc., judicial efforts in this regard were problematic.

Hoffman-La Roche v. Sperling

Although the Supreme Court addressed collective actions in 1989 in Hoffman-La Roche, Inc. v. Sperling, the Court only provided limited guidance for lower courts:

“[I]n exercising the discretionary authority to oversee the [collective action], courts must be scrupulous to respect judicial neutrality. To that end, trial courts must take care to avoid even the appearance of judicial endorsement of the merits of the action.”

Lusardi v. Xerox Corporation

One early approach to FLSA collective actions originated in the the 1987 New Jersey district court opinion in Lusardi v. Xerox Corporation. Lusardi laid out a two-step procedure to determine whether prospective opt-in plaintiffs are “similarly situated” under the FLSA.

In step one, the district court determines whether to grant “conditional certification” to a putative collective. This step requires little more than pleadings and affidavits showing that the putative collective has been the victim of a single decision, policy or plan.

If “conditional certification” is ordered then court-approved written notices are sent to the putative collective advising as to their ability to opt-in to the suit. Individual members of the collective then have a certain time frame for filing written consent forms with the court.

Step two occurs at the conclusion of discovery. The plaintiff files a motion to certify or, more commonly, the defendant files a motion to decertify. With the benefit of discovery, the court makes a final determination as to whether the named plaintiff and opt-in plaintiffs may proceed to trial as a collective action.

A fundamental problem with the two-step procedure of Lusardi is it often puts the cart before the horse. Rather than conducting discovery to determine who should be part of the collective action, the procedure often relegates discovery to the question of who should not be part of the collective action.

This inverted procedure has real consequences for litigation. Often, discovery and corresponding disputes as to who should not be part of the collective are more expensive. Indeed, litigation costs is a reason why many collective actions settle.

Furthermore, thanks to court-approved notice, individuals who might not have otherwise sued the employer on their own have been educated as to their FLSA claims. Even if they are dismissed from the collective action, they may choose to pursue these claims separately, provided the statute of limitations has not expired. By allowing them to be included in the collective action, the court has likely succeeded only in stirring further litigation against the employer, in contravention of the mandate of Hoffman- La Roche. This damage cannot be undone by the court.

Shushan v. University of Colorado

A second approach to FLSA collective actions originated in the 1990 Colorado district court opinion in Shushan v. University of Colorado. Shashan laid out a two-step procedure similar to Lusardi, but held the plaintiff to a higher burden for “conditional certification.”

The court specifically held that, for “conditional certification”, the plaintiff “must satisfy all of the requirements of [R]ule 23, insofar as those requirements are consistent with § 216(b).” That means courts utilizing this procedure consider “numerosity”, “commonality”, “typicality” and “adequacy of representation” in determining whether to conditionally certify a collective action.

A fundamental problem with this approach is that it invites the consideration of factors other than whether the putative collective is “similarly situated.”

Swales v. KLLM Transport Services, LLC

Each of the foregoing procedures was unequivocally rejected in Swales v. KLLM Transport Services, LLC. The Court held:

“Instead of … any test for ‘conditional certification,’ a district court should identify, at the outset of the case, what facts and legal considerations will be material to determining whether a group of ’employees’ is ‘similarly situated.’ And then it should authorize preliminary discovery accordingly. The amount of discovery necessary to make that determination will vary case by case, but the initial determination must be made, and as early as possible.”

After preliminary discovery, the court must then consider all of the available evidence in determining whether or how the suit may proceed as a collective action. Presumably, this evidence must be presented by the named plaintiff. 

To be sure, a court may determine, based upon the evidence, the case should proceed as a collective action and ratify the scope of the collective advocated by the name plaintiff. Nevertheless, Swales underscored the availability of other options:

“After considering all available evidence, the district court may conclude that the [p]laintiffs and [o]pt-ins are too diverse a group to be ‘similarly situated’ for purposes of answering whether … Plaintiffs have met their burden of establishing similarity. If that is the case, it may decide that it needs further discovery to make this determination. Or it may find that only certain subcategories of [employees] … should receive notice.”


The procedure set forth by the Fifth Circuit puts the cart where it belongs, after the horse. By determining at the outset if, or to what extent, the putative opt-in plaintiffs are “similarly situated” to the named plaintiff, the court avoids (1) needless notices to individuals who should not be part of the collective, (2) stirring up potential new litigation, and (3) the need to determine at a later date whether the collective should be culled.

It remains to be seen whether other circuits will follow the lead of the Fifth Circuit. For now, Lusardi is ostensibly still followed in the Eleventh Circuit (Morgan v. Family Dollar Stores), and the Tenth Circuit (Thiessen v. General Electric Capital Corp.).

Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor & employment issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com

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