Seventh Circuit: More Flexible Standard for Issuing Notice of Collective Actions

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August 5, 2025

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Quick Look

  • The Seventh Circuit replaced the long-standing Lusardi framework for FLSA collective actions with a new, more flexible standard that allows courts to weigh both parties’ evidence before authorizing notice.
  • Plaintiffs must now show a material factual dispute about whether proposed collective members are similarly situated, and courts may consider rebuttal evidence and authorize limited pre-notice discovery.

Discussion

In Richards v. Eli Lilly & Co., and signaling a major departure from longstanding precedent, the Seventh Circuit rejected the widely used Lusardi two-step framework for issuing notice in collective actions under the Fair Labor Standards Act (FLSA). Instead, the court adopted a more flexible, evidence-based standard that requires plaintiffs to show a material factual dispute about whether the proposed collective is similarly situated, while also allowing defendants to submit rebuttal evidence at the notice stage.

 

This new approach emphasizes judicial neutrality, timely and accurate notice, and the prevention of procedural abuse. In reaching the decision, the Seventh Circuit criticized the Lusardi standard for enabling early notice based on minimal evidence, which could pressure employers into premature settlements and blur the line between case management and claim solicitation.

 

While the Seventh Circuit declined to adopt the stricter standards from the Fifth and Sixth Circuits, it still raised the bar for plaintiffs by requiring “some evidence” of a common unlawful employment practice before notice can be issued. District courts now have greater discretion to weigh competing evidence, authorize limited pre-notice discovery, or defer notice decisions altogether.

 

This decision signals a shift toward more rigorous scrutiny at the outset of collective actions, potentially reducing the number of conditionally certified collectives and increasing the burden on plaintiffs to substantiate their claims early in the process.

 

Action Items

  1. Consult with legal counsel on litigation strategy for collective actions.

 

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase