The use of the two-tier method to determine whether collective actions should proceed under Section 216(b) of the Fair Labor Standards Act (“FLSA”) is inappropriate because it: (1) conflates Rule 23 standards with non-applicable wage and overtime claims under the Fair Labor Standards Act; and (2) wastes judicial resources and the resources of the parties. While the two-tier approach is popular among the district courts, the Eleventh Circuit has stressed that “[n]othing in [the Eleventh Circuit’s] precedent … requires district courts to utilize this approach. Hipp v. Liberty Nat. Life Ins. Co., 252 F.3d 1208, 1219 (11th Cir. 2001). Thus, courts should consider the utility of authorizing notice under Section 216(b) rather than relying on jurisprudential concerns that are based in “imprecise pleading and stare decisis yield[ing] path-dependence and lock-in.” Turner v. Chipotle Mexican Grill, Inc., 123 F. Supp. 3d 1300, 1306 (D. Colo. 2015).
The two-tier approach is a method of determining whether collective actions should proceed under Section 216(b). The first phase uses a very lenient standard to determine whether the named plaintiffs are similarly situated to the putative opt-in plaintiffs and whether there are similarly situated individuals who want to join the litigation. Most plaintiffs clear the low bar of the first phase, just to, in most cases, have their classes de-certified in second phase when the court makes a factual determination on the “similarly situated” issue. See Hipp 252 F.3d at 1218 (“Based on our review of the case law, no representative class has ever survived the second stage of review”).
The conflation of Rule 23 class action standards with the application of 216(b) to collective actions can traced to the 1976 enactment of the Age Discrimination Enforcement Act (“ADEA”). The ADEA authorized similarly situated plaintiffs to aggregate their claims by incorporating 216(b) as its enforcement mechanism. As a result of the proliferation of ADEA lawsuits, the leading cases that address collective action proceedings under section 216(b) are ADEA actions, rather than actions brought under the FLSA. Moreover, because ADEA 216(b) cases often import Title VII discrimination standards that are subject Rule 23 class certification. Thus, what should be a relatively straightforward analysis of wage and overtime claims under the FLSA, is now a confounding analysis that assesses wage and overtime claims with the Rule 23 like two-tiered method, which was designed to address patterns and practices of discrimination. See Turner 123 F. Supp. 3d at 1305–06 (finding that reliance on Rule 23 “class certification” concepts in true 216(b) FLSA cases to be the result of a confluence of factors, including haphazard terminology, a misunderstanding of precedent and legislative intent, and excessive path dependence in the application of stare decisis.) “Rule 23 actions are fundamentally different from collective actions under the FLSA,” Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523, 1530 (2013), as such, courts should not default to the use of the two-tier method when determining if a class should be conditionally certified.
The use of the formulaic two-tier system to authorize court facilitated notice or conditional certification of a “class” under 216(b) wastes resources. Congress authorized collective treatment of actions under 216(b) for the purposes of judicial economy. See Holt v. Rite Aid Corp., 333 F. Supp. 2d 1265, 1269 (M.D. Ala. 2004) (““the judicial system benefits by efficient resolution in one proceeding of common issues of law and fact arising from the same alleged discriminatory [or illegal] activity.”) However, the pervasiveness of the two tiered method has made the “[s]eeking out and notifying sleeping potential plaintiffs”- an activity that “was once demeaned as a drain on judicial resources” – into a misguided “tool of judicial administration.” See Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165 (SCALIA, J., dissenting). As many courts grant conditional certification without “cognizan[ce] of the factual and legal issues presented by the case,” West v. Verizon Communications, Inc., WL 2957963, at *4 (M.D. Fla. Sept. 10, 2009), the goal of judicial economy is vitiated by the futile litigation regarding class certification. “To create a collective action class, including the cost associated with that when a Court is convinced that there is insufficient support for the same prior to certification would be an exercise in futility and wasted resources for all parties involved.” Hart v. JPMorgan Chase Bank, N.A., WL 6196035, at *6 (M.D. Fla. Dec. 12, 2012). Thus, courts should use their discretion to practically assess the appropriateness of conditional certification. See id. at *4 (“[d]istrict [c]ourts enjoy broad discretion in deciding how best to manage the cases before them”). For a discussion regarding how employers can successfully defend against Section 216(b) collective actions, please our article addressing this topic and the defense of “individualized” claims.
Peter T. Mavrick has successfully represented many businesses in labor and employment law litigation. This article is not a substitute for legal advice tailored to a particular situation. Peter T. Mavrick can be reached at: Website:www.mavricklaw.com; Telephone: 954-564-2246; Address: 1620 West Oakland Park Boulevard, Suite 300, Fort Lauderdale, Florida 33311.