Similarly Situated Defined?

Updated: May 17, 2021

The Supreme Court Is Asked to Provide Guidance on the “Similarly Situated” Standard For § 216(b) Of The FLSA.

By Robert Morelli

November 11, 2020

On April 1, 2020, the Second Circuit Court of Appeals decided Scott v. Chipotle Mexican Grill, Inc. In Scott, the district court denied a group of Chipotle managers’ motion for Fed. R. Civ. P. 23 class certification and granted the employer’s motion to decertify the conditionally certified FLSA collective action. The employees appealed. The Second Circuit vacated the district court’s order decertifying the collective action, and remanded for further proceedings.

In doing so, the Second Circuit explained that district court applied a standard too similar to Rule 23 class certification and that on remand it should evaluate whether the employees have “one or more similar questions of law or fact” in common. In other words, the employees could proceed in a collective action because they were able to show they shared at least one common claim. Chipotle filed a petition for a writ of certiorari on August 28, 2020.

In their petition, the company rightly points out that the Ninth Circuit is the only other federal appeals court to take the Second Circuit’s approach, while the Third, Sixth, Eighth and Eleventh Circuits have all embraced similar tests. The Tenth and Seventh Circuits have applied still different standards, leaving the federal appeals courts in “an unsustainable state of disarray.”

On November 2, 2020, the workers asked the High Court to deny Chipotle’s petition. According to the workers, the Second Circuit’s decision “is grounded in the text of the FLSA and . . . tracks the opinions of most other appellate courts in emphasizing material similarities among party plaintiffs and rejecting analogies to [class actions].”

So, what does this all mean? Even if SCOTUS grants Chipotle’s certiorari petition, neither management-side lawyers nor worker’s advocates should expect a sea-change in the law.

Courts almost universally apply a two-stage certification framework - the Lusardi approach - for FLSA certification. Chipotle involves the latter, decertification stage. With only a “modest” showing typically required to get past the first “conditional certification” stage, wage & hour litigators can still expect FLSA collective action notice to remain the routine and not the exception.

However, should the Court tighten and further refine the similarly situated standard for decertification, employers might find that consenting to initial class notice and then using discovery to defeat collective allegations may be the best litigation strategy moving forward.

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