In an FLSA collective action brought in Delaware, Pennsylvania, or New Jersey (the three states within the 3d Circuit), there is a two-step process for class certification. At the initial stage, called conditional certification, the burden is low. At the second stage, called final certification, the standard is more stringent but the precise test that should be applied has been unclear. Until now.
On August 9, 2012, the Third Circuit issued an opinion in Zavala v. Wal Mart Stores, Inc., in which it decided the standard that courts must apply. Specifically, the Third Circuit held that, at the final-certification stage, the district court must "make a finding of fact that the members of the collective action are 'similarly situated'" and that the burden to establish this fact by a preponderance of the evidence rests with the plaintiffs.
The court adopted an ad hoc approach to making the decertification decision. This approach requires the consideration of all relevant factors to determine similarity on a case-by-case basis. Factors that may be relevant include: whether the plaintiffs are employed in the same department, division, and location; whether they advance similar claims; whether they seek the same form of relief; and whether they have similar salaries and circumstances of employment. The plaintiffs may be found to be dissimilar based on the existence of individualized defenses.
Finally, the court concluded that the plaintiffs must meet their burden to establish similarity by a preponderance of the evidence in order to obtain final certification and proceed with the case as a collective action.
This is the second opinion from the Third Circuit on important FLSA issues. in the last several weeks. The court's decision on a third important FLSA issue, Smyczyk v. Genesis Healthcare Corp., has been appealed to the U.S. Supreme Court, where arguments will be heard this term. Needless to say, the FLSA remains a very hot topic in the world of employment law.