Tuesday, August 14, 2012

Third Circuit on FLSA Collective Action Certification

A man of my word, here is the FLSA analysis I promised you last week. In Zavala v. Wal Mart Stores, Inc., the Third Circuit laid down important rules for FLSA collective action certification.

FLSA collective action plaintiffs must clear the initial threshold of "conditional certification," which is a lenient standard requiring only substantial allegations that class members were victims of a single decision, policy, or plan. But to get to the real deal, "final certification," the plaintiffs must clear a higher bar. In Zavala, the Third Circuit set that bar.

Plaintiffs must establish that they are "similarly situated." Courts must make this determination on an ad hoc basis, applying all relevant factors on a case-by-case basis. The Court even gave us some factors to consider:
[W]hether the plaintiffs are employed in the same corporate department, division, and location; whether they advance similar claims; whether they seek substantially the same form of relief; and whether they have similar salaries and circumstances of employment.
The Court also declared that plaintiffs bear the burden of establishing that they are "similarly situated" by a preponderance of the evidence.

The Court also provided some analysis of the standard of review on appeals. "[A]pplying the legal standard to conclude whether the proposed plaintiffs actually are similarly situated" is a factual question subject to review only for "clear error." The Court just gave us the legal standard to apply, so moving forward the Court anticipates reviewing cases only for clear error "as only fact-finding should be at issue." In other words, the trial courts will have pretty broad discretion in this area.

Image: Third Circuit seal public domain as work of federal government. Used in commentary on Third Circuit. Not official use.