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Las Vegas Employment Attorney Andre Lagomarsino – Third Circuit: Higher Standard is Needed to Certify FLSA Collective Actions

The Third Circuit has outlined its two-part test for Fair Labor Standards Act (FLSA) collective actions.

First, to meet the conditional certification standard of making a “modest factual showing,” named plaintiffs must present evidence “‘beyond pure speculation,’ that there is a factual nexus between the manner in which the employer’s alleged policy affected [them] and the manner in which it affected other employees.” Second, before final certification is granted, the court must determine whether the plaintiffs who have opted-in are in fact “similarly situated” to the named plaintiffs. The determination is a factual finding and made in light of the claims, defenses, and “all relevant evidence.” Like all other circuit courts, Third Circuit courts will now consider such factors as whether the plaintiffs work in the same department, whether they advance similar claims, whether they seek substantially the same relief, and whether they have similar circumstances of employment. The plaintiff’s burden of proof is by a preponderance of the evidence.

The Third Circuit has also outlined that the standard of review for Third Circuit appellate courts reviewing a Third Circuit district court’s certification decision has two components. First, appellate courts must select the right legal standard to see whether the proposed plaintiffs are similarly situated. Second, appellate courts must apply that standard to make the required factual finding. The standard of review for a district court’s selection of a legal standard is de novo, as a pure issue of law, while the district’s factual finding is reviewed only for clear error. As to the impact of the factual finding, the Third Circuit concluded, “We do not believe that the statute gives the district court discretion to deny certification after it has determined that plaintiffs are similarly situated.”

In Zavala v. Wal Mart Stores, Inc., the Third Circuit upheld the district court’s decertification of the janitors’ claims because, although Wal-Mart had a maintenance manual that specified cleaning procedures, and some Wal-Mart employees directed cleaning crews in their work, the janitors worked at 180 stores in 33 states for 70 cleaning contractors. In addition, the individuals worked varying hours and for different wages depending on the contractor. Moreover, the district court noted that Wal-Mart had different defenses available, including that Wal-Mart was not the individual janitors’ employer under the FLSA and that Wal-Mart paid cleaning contractors an adequate amount to support an appropriate wage for the cleaners. The Third Circuit reasoned that “common links are of minimal utility in streamlining resolution,” because “[l]iability and damages still need to be individually proven.” The court explained that similarly situated does not mean “simply sharing a common status” such as an illegal immigrant. Rather, similarly situated means that proposed plaintiffs were subjected to “some common employer practice that, if proved, would help demonstrate a violation of the FLSA.” The Third Circuit concluded: “The similarities among the proposed plaintiffs are too few, and the differences among the proposed plaintiffs are too many.”

This lawsuit was an overzealous exercise on behalf of thousands of janitors, claiming they were illegal immigrants, against an entity that was not their formal employer but rather was the company contracting with the cleaning companies for which the janitors worked. The lawsuit also featured creative theories of liability, including civil RICO and false imprisonment claims, both of which were dismissed. The FLSA claim faced the hurdle of proving that Wal-Mart–the principal of the cleaning contractors who employed the janitors–was an employer of the janitors. Proving employment status on an agency theory or a joint-employer theory depends on multiple factors that could hardly be the same across a purported class comprising the employees of 70 cleaning contractors at almost 200 stores.

The Las Vegas law office of Lagomarsino Law did not represent anyone involved in any cases that may be referenced above. This commentary is for educational purposes. If you would like to be represented by an attorney in our Las Vegas office, contact our office for a free confidential case review and receive a response within 24 hours. Call Toll Free 866-414-0400.