Fifth Circuit Rejects Two-Step Certification Process For FLSA Collective Actions

CATEGORY: Client Update for Public Agencies, Fire Watch, Law Enforcement Briefing Room, Public Education Matters
CLIENT TYPE: Public Education, Public Employers, Public Safety
DATE: Feb 25, 2021

The Fair Labor Standards Act (FLSA) permits “similarly situated” employees to bring a collective action against their employer for federal wage and hour violations.  However, the FLSA does not define what “similarly situated” means. Congress later amended the FLSA’s collective action procedure, through the 1947 Portal-to-Portal Act, to require similarly situated employees to opt-in via written consent.  Neither Congress nor the U.S. Supreme Court, however, have provided further guidance for the proper procedure for certifying collective actions.

District courts across the nation have arrived at a loose consensus as to the process for certifying the appropriateness of FLSA collective actions.  Courts have adopted a nearly universal two-step approach.  In the first step, known as “conditional certification,” the employee must make a modest factual showing that they and the potential opt-in employees were victims of a common policy or plan that violated the law.  If conditional certification is granted at the first step, the court proceeds to the second step.  In the second step, following discovery, the court will decide whether the case can proceed on a collective basis by determining whether the employees who have joined the lawsuit are in fact “similarly situated.”  If the employees are not similarly situated, the action may be decertified.

KLLM Transport Services (KLLM) transports refrigerated goods throughout the county, using either company-owned trucks operated by its employee-drivers, or trucks provided by other drivers classified as independent contractors.  A number of workers at KLLM who drove trucks under independent contractor agreements with the company initiated a collective action lawsuit alleging that KLLM misclassified them, and all other “similarly situated drivers,” as independent contractors rather than employees.  The workers alleged KLLM violated the FLSA’s minimum wage requirement they were entitled to as employees.

After the parties conducted a significant amount of discovery, the workers moved for conditional certification.  Applying its own variation of the two-step approach, the district court ultimately granted the workers’ request for conditional certification, thereby certifying a collective action of potentially thousands of KLLM truck drivers.  KLLM immediately filed a petition for appeal by permission, which the Fifth Circuit granted.

On appeal, the Fifth Circuit rejected the two-step certification rubric.  The court relied on the only two principles it found to be binding on district courts: 1) the FLSA’s text that declares (but does not define) that only those “similarly situated” may proceed as a collective action; and 2) the Supreme Court’s admonition that a district court may “facilitat[e] notice to potential” employees for case-management purposes.  The court noted that while the two-stage approach may be “common practice,” nothing in the FLSA, nor in Supreme Court precedent interpreting it, requires or even authorizes any “certification” process.

Instead, the court concluded that a district court should identify, at the outset of the case, which facts and legal considerations will be material to determining whether a group of employees is “similarly situated.”  Then, the district court should authorize preliminary discovery accordingly.  The Fifth Circuit noted that a district court should make this determination “as early as possible” and not after a lenient, step-one “conditional certification.”

Swales v. KLLM Transp. Servs., L.L.C., 2021 WL 98229 (5th Cir. Jan. 12, 2021).


As a Fifth Circuit decision, this case is not binding on California courts. However, the Ninth Circuit has also rejected the two-step approach because it “improperly sanctions the decertification of collective actions the district court finds procedurally challenging.”

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