Proper Conditional Certification Standard Still Uncertain Despite Fifth Circuit’s Implicit Approval of Two-Step Approach


Based on a review of recent district court cases, uncertainty remains regarding the proper standard for certifying a Fair Labor Standards Act (“FLSA”) collective action in the Fifth Circuit Court of Appeals. The absence of a definitive test remains because the Fifth Circuit, in March 2013, avoided the opportunity to apply a stricter certification standard than the one the courts have been using. Apparently, the district courts are holding out for more definitive guidance.

Courts recognize two different standards for determining whether to conditionally certify a class in a FLSA collective action – the Lusardi or the more rigorous Rule 23 class action approach. The Lusardi approach has two steps: (1) the “notice stage,” in which the court examines pleadings and a limited amount of evidence to determine if an order facilitating notice to potential class members is justified, and (2) the “de-certification stage,” usually following discovery, in which the court decides if the class that was conditionally certified is still comprised of “similarly situated” plaintiffs. Under the stricter Rule 23 class action approach, the court reviews the numerosity, commonality, and typicality of the plaintiffs as well as the adequacy of representation to determine whether a class should be conditionally certified. Much to the chagrin of employers, district courts in the Fifth Circuit most commonly use the two-step Lusardi approach, which frequently results in conditional certification. While Lusardi is the most commonly used approach, district courts throughout the Fifth Circuit regularly note that the appeals court has declined to adopt one approach over the other.

In Wells Fargo Wage and Hour Employment Practices Litigation (No. III), the Fifth Circuit had the opportunity to adopt one of these approaches, but declined to do so. No. H-11-2266, 2012 U.S. Dist. LEXIS 112769 (S.D. Tex. Aug. 10, 2012). In the underlying case, the United States District Court for the Southern District of Texas found that two groups of Wells Fargo mortgage officers met the lenient Lusardi standard for conditional certification. In response to the district court’s holding, Wells Fargo filed a petition for a writ of mandamus with the appeals court, asking the Fifth Circuit to overturn the district court’s decision granting conditional certification on the basis that the district court applied the wrong standard. The Fifth Circuit denied Wells Fargo’s petition with a one sentence order that contained no explanation for its decision. Now, Wells Fargo’s case continues at the district court level as a typical FLSA collective action until Wells Fargo can attempt to decertify the class after discovery.

Arguably, the underlying message of the Fifth Circuit’s order is that the Lusardi two-step approach is the appropriate standard for certifying an FLSA collective action; nevertheless, over the last ten months, the district courts have continued to view this issue as unsettled. For example, in Kelly v. Healthcare Services Group, Inc., the court explained that, “[t]he Fifth Circuit has discussed both approaches, but has not adopted a specific approach.” No. 2:13-cv-00441-JRG, 2013 U.S. Dist. LEXIS 149204 (E.D. Tex. Oct. 16, 2013). Opinions from the Western District and the Southern District used similar language. See Lay v. Gold’s Gym Int’l, Inc., No. SA 12-CV-754-DAE, No. SA-12-CV-930-DAE, 2013 U.S. Dis. LEXIS 144264 (W.D. Tex. Oct. 4, 2013); Fox v. W. Talk, L.C., No. H-12-3726, 2013 U.S. Dist. LEXIS 153892 (S.D. Tex. Oct. 28, 2013). To be sure, not a single district court case has interpreted the Fifth Circuit’s denial of Wells Fargo’s writ of mandamus to demonstrate that the Fifth Circuit favors the Lusardi approach.

Although the Fifth Circuit’s refusal to adopt a higher standard for conditional certification in Wells Fargo may have disappointed employers, the reality is that not much has changed; the vast majority of district courts continue to use the two-step Lusardi approach. Employers must continue to focus on attacking collective actions at the crucial decertification stage. As recent district court cases demonstrate, the argument for application of a stricter certification standard has not been foreclosed. When addressing initial certification, employers should not forget that the proper certification standard remains uncertain and, particularly in appropriate cases, should continue to push courts to adopt stricter standards.

For more information, please contact the Haynes and Boone attorney with whom you work or any of the following attorneys in the firm’s Labor and Employment Practice Group:

Laura E. O'Donnell



Tamara I. Devitt




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