Sixth Circuit: New Standard in Federal Wage and Hour Collective Actions

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May 19, 2023

  

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  • Plaintiff employees in the Sixth Circuit must show a “strong likelihood” that other employees are similarly situated before pursuing a collective action under the FLSA.

In Clark v. A&L Homecare and Training Center, LLC, the Sixth Circuit Court of Appeals adopted a new test for plaintiffs when seeking to bring a collective action under the Fair Labor Standards Act (FLSA), requiring a plaintiff to show a “strong likelihood” that other employees are similarly situated before a district court may facilitate notice of an FLSA lawsuit to those employees as prospective plaintiffs. Here, a group of home health aides sued their former employer alleging they were paid improper rates for overtime premiums and vehicle expense reimbursements. The former employees sought to bring their federal FLSA claims as a collective action, on behalf of themselves and other similarly situated employees, on the basis that they were all subjected to the same policy or practice. The employer challenged this minimal standard and argued for a stronger showing to warrant a collective action.

Under the FLSA, the Court may facilitate notice to potential plaintiffs who are then given an opportunity to join the lawsuit by affirmatively “opting in” through a consent form. To determine who qualifies as a potential plaintiff, many courts have adopted a two-step approach: (1) conditional certification, where a plaintiff establishes a “modest factual showing” that other potential plaintiffs are “similarly situated” to them; and (2) a closer look through discovery, which requires the courts to evaluate more closely whether those potential plaintiffs are, in fact, “similarly situated” to the original plaintiff.

In this case, the Sixth Circuit determined that a “modest showing,” as required under the first prong of the analysis, was too light of a showing, stating “to the extent practicable … court-approved notice of the suit should be sent only to employees who are in fact similarly situated.” To achieve this, the Sixth Circuit said that a plaintiff seeking to bring a collective action suit under the FLSA must show a “strong likelihood” that other potential plaintiffs were similarly situated.

However, the Sixth Circuit did not outline what exactly will constitute a “strong likelihood” under the new standard. The Court noted that a determination of whether employees are similarly situated is very fact intensive, particularly regarding the tasks they perform and the timekeeping and compensation policies that apply to them. The case was ultimately sent back to the district court to apply the “strong likelihood” standard. Therefore, employers should continue to monitor developments and interpretations under this heightened standard.

 

Action Items

  1. Review employee compensation policies and practices to ensure compliance with the FLSA, and any other applicable state or local laws or regulations.
  2. Consult with legal counsel regarding applicability of heightened standard in the event of claims brought under the FLSA.
  3. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

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. © 2023 ManagEase