The Third Circuit Adopts Standard for Final Certification of Collective Actions

In a case brought by Wal-Mart cleaning crew members – illegal immigrants who took jobs with contractors and subcontractors Wal-Mart engaged to clean its stores – the Third Circuit, for the first time, adopted a standard for final certification of collective actions. In Zavala v. Wal-Mart Stores, Inc., No. 11-2381 (3d Cir. Aug. 9, 2012), the Third Circuit affirmed the district court’s decertification of the collective action following discovery into the merits of the plaintiffs’ claims.

It is fairly well settled that two different standards apply for certification of the collective action under the FLSA, one for conditional certification and another for final certification. As the court noted in Zavala, conditional certification at the initial stages of the litigation requires only a “fairly lenient standard” and some courts “require nothing more than substantial allegations that the putative class members were together the victims of a single decision, policy or plan.” However, the Third Circuit found that based on the statutory text of the FLSA, the standard to be applied on final certification is whether the proposed collective plaintiffs are “similarly situated.”

The Third Circuit approved an ad hoc approach adopted by other courts in which all relevant factors are to be considered to make a final determination on a case-by-case basis. Relevant factors to be considered in this analysis include (but are not limited to): whether the plaintiffs are employed in the same corporate department, division, and location; whether they advance similar claims; whether they seek substantially the same form of relief; and whether they have similar salaries and circumstances of employment. Plaintiffs may also be found dissimilar based on the existence of individualized defenses.

The Court resolved what no other Court of Appeals has directly done, answer the question as to the level of proof the plaintiffs must satisfy at final certification of collective actions. The Third Circuit held that the plaintiffs must satisfy their burden by a preponderance of the evidence. Applying this standard, the Third Circuit held that the plaintiffs in Zavala failed to satisfy the “similarly situated” standard.

Abbey Spanier, LLP, located in New York City, is a well-recognized national class action and complex litigation law firm.