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On January 12, 2021, the Fifth Circuit Court of Appeals issued a landmark decision rewriting the rules for obtaining certification in collective actions under the Fair Labor Standards Act (FLSA).

In Swales v. KLLM Transport Services, L.L.C., No. 19-60847, the Fifth Circuit rejected the lenient approach first articulated in a 1987 New Jersey district court opinion. Instead, the Fifth Circuit now requires district courts to conduct a more searching analysis before ordering notice to potential plaintiffs who may be eligible to opt in to an FLSA lawsuit.

The 1987 New Jersey case articulates a two-step approach. Under the first step, a plaintiff only needs to make a minimal showing of “similarly situated” employees to obtain “conditional certification” and have notice sent to potential plaintiffs. This initial showing could be based entirely upon a plaintiff’s own pleadings and affidavits. As a practical matter, this means that notices have routinely been sent out regardless of the merits of the underlying case. The second step occurs after employees have had the opportunity to opt in and the parties have completed substantial discovery. At the end of this second step, the defendant may move to “decertify.” As Fifth Circuit Judge Don Willett acknowledged in his opinion, the 1987 case’s two-step approach has been followed as a “‘near- universal practice’” by the district courts. That approach, however, has never been adopted by the Fifth Circuit, the Supreme Court of the United States, or a majority of other circuits.

In KLLM, the Fifth Circuit found that the 1987 case’s two-step process was unsupported by the statutory language of the FLSA and that it could foster misuse—for example, by coercing settlements based on minimal evidence. The court did not find support for the more demanding Rule 23 class action approach either. Instead, the Fifth Circuit struck a middle ground. The opinion states as follows:

Instead of adherence to [the 1987 opinion], or 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. In other words, the district court, not the standards from [the 1987 opinion], should dictate the amount of discovery needed to determine if and when to send notice to potential opt-in plaintiffs.

The amount of discovery necessary for application will vary depending on the type of case. In some cases, minimal discovery may be required because of the obvious uniformity of a challenged practice. In other cases, extensive discovery may be required. The Fifth Circuit stated that a district court should take the ultimate legal standards into consideration when determining the scope of discovery and making the certification decision. In the Fifth Circuit’s view, that process does not constitute an improper inquiry into the merits of the case, even if much of the evidence may overlap.


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