chevron-down Created with Sketch Beta.
June 03, 2021

Fifth Circuit Challenges the FLSA Two-Step Conditional Certification Framework


Earlier this year, the Fifth Circuit issued a decision that purported to change the way conditional certification is managed by courts in Fair Labor Standards Act (“FLSA”) cases. In Swales v. KLLM Transport Servs, LLC, 985 F. 3d 430 (5th Cir. 2021), the court held that courts should, prior to issuing notice to members of a collective, determine “whether merits questions can be answered collectively” and “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.’” Id. at 441-42. The Swales decision marks a significant departure from the traditional two-step conditional certification framework adopted by other appellate and district courts, see, e.g., Myers v. Hertz Corp., 624 F.3d 537, 554–55 (2d Cir. 2010); Zavala v. Wal Mart Stores Inc., 691 F.3d 527, 536 (3d Cir. 2012); White v. Baptist Meml. Health Care Corp., 699 F.3d 869, 877 (6th Cir. 2012), and has prompted briefing around the country regarding the timing and standard for conditional certification.

The touchstones of the first-step, conditional certification inquiry are that (1) it takes place early on in the case, prior to discovery; (2) it is conducted based on minimal evidence—usually pleadings and affidavits; and (3) it is based on a very lenient standard, and often results in notice being issued. The rationale for early conditional certification and prompt notice is to preserve the statute of limitations on collective action members’ claims, which continues to run until they opt in. See Genesis Healthcare Corp. v. Symczyk, 569 U.S. 66, 75 (2013); Hoffman-La Roche Inc. v. Sperling, 493 U.S. 165, 170 (1989). This is because the opt-in procedures of the FLSA are fundamentally different from the opt out procedures of a class action brought under Fed R. Civ. P. 23. In an FLSA collective action, discovery is typically conducted after the collective is conditionally certified and the workers have been provided with an opportunity to join the case. At the close of discovery, defendants can move for decertification, and the court takes a closer look at the collective action members, using a more stringent standard, to determine whether they are, in fact, similarly situated.

However, according to the Fifth Circuit, “[w]hen a district court ignores that it can decide merits issues when considering the scope of a collective, it ignores the ‘similarly situated’ analysis and is likely to send notice to employees who are not potential plaintiffs. In that circumstance, the district court risks crossing the line from using notice as a case-management tool to using notice as a claims-solicitation tool.” Swales, 985 F.3d at 442. The approach proposed by Swales to avoid this issue is to “authorize preliminary discovery” to “determine if and when to send notice to potential opt-in plaintiffs.” Id. at 441.

The Fifth Circuit largely left the decision about which cases call for additional discovery and in what amount to the discretion of the district courts. The Fifth Circuit also did not address the attendant prejudice to potential opt-in plaintiffs in not being provided with timely notice and opportunity to join the case and toll the statute of limitations on their claims.

Defense counsel’s reaction to Swales has been swift. In the past few months, plaintiffs’ conditional certification motions have repeatedly been met with the “Swales argument”—namely, that the court needs more information to determine whether collective action members are, in fact, similarly situated, and that discovery is necessary prior to conditional certification. Defense counsel also argue that nothing in the text of the FLSA requires a two-step conditional certification analysis.

Plaintiffs’ counsel have pushed back against the Swales approach, arguing that that the pre-certification discovery and more stringent inquiry proposed by Swales conflates conditional certification with decertification, and that the delay caused by this approach frustrates the remedial purposes of the FLSA and the benefits of early notice as set out by the Supreme Court in Hoffman-LaRoche. Plaintiffs’ counsel have also argued that further delay prejudices the claims of potential opt-in plaintiffs, which diminish with each week that passes without notice.

The majority of district courts presented with Swales arguments so far have rejected Swales and have stood by the traditional two-step conditional certification approach. See, e.g., Wright v. Waste Pro USA, Inc., 2021 WL 1290299, at *3 (S.D. Fla. Apr. 6, 2021) (“no court outside of the Fifth Circuit has followed the Swales opinion in the three months since it was issued.”); Brewer v. Alliance Coal, LLC, 2021 WL 1307721, at *1 (E.D. Ky. Apr. 6, 2021) (“While the Court agrees that nothing in the Sixth Circuit’s case law precludes the use of an approach similar to that of the Fifth Circuit in Swales, the Court will nevertheless follow the historical, two-stage approach most often utilized in this circuit.”); McCoy v. Elkhart Prods. Corp., 2021 WL 510626, at *2 (W.D. Ark. Feb. 11, 2021) (“Defendant requests the Court to follow the recent Fifth Circuit opinion in Swales . . . The Court will follow the historical, two-stage approach, which has proven to be an efficient means of resolution of this issue . . . Defendant’s complaint that the two-stage approach leads courts to grant conditional certification without reviewing if potential opt-in plaintiffs are similarly situated is unfounded.”); Piazza v. New Albertsons, 2021 WL 365771, at *5, n. 6 (N.D. Ill. Feb. 3, 2021) (“The Court declines New Albertsons’ invitation to deviate from the well-established process or standard to allow the parties to engage in extensive discovery based on Swales.”).

For now, Swales and its reasoning appear confined to the Fifth Circuit, and the two-step approach to conditional certification of FLSA cases continues to have widespread support in district courts across the country.

Olena Savytska

Lichten & Liss-Riordan, P.C.

Olena Savytska is an associate attorney at Lichten & Liss-Riordan, P.C., in Boston, Massachusetts.