The Standard of Review for Final Certification in Fair Labor Standards Act Cases, and a Caution About Joint Appendices

Zavala v. Wal Mart Stores, Inc.., 691 F.3d 527 (3d Cir. 2012).  This Fair Labor Standards Act (“FLSA”) decision, written by Judge Smith, rejects a collective action under the FLSA and affirms the district court’s dismissal of plaintiff’s claims on the merits.  The decision has at least two components related to appellate law and practice.  First, an easy one.  The panel noted that although Federal Rule of Appellate Procedure 30(b)(1) requires the parties to cooperate to submit a joint appendix to which each party can contribute, the parties here submitted both a joint appendix and two other separate appendices, one for each side.  “This unnecessarily complicates the record on appeal, and we strongly discourage parties from pursuing such a course in the future.”  So don’t submit multiple appendices in the Third Circuit.

The second thing relates to the standard of review for final certification of a collective action in FLSA cases.  As Judge Smith explained, there are two different standards for certification of an FLSA collective action.  Early in the case, the court can issue what has been called “conditional certification,” though the panel in this case noted that the Third Circuit had previously said that that term is “not really a certification.”  Rather, it is “the district court’s exercise of its discretionary powers … to facilitate the sending of notice to potential class members.”  Only a “modest factual showing,” meaning “some evidence, beyond pure speculation, of a factual nexus between the manner in which the employer’s alleged policy affected [the  plaintiff] and the manner in which it affected other employees,” is required for “conditional certification.”

The standard for final certification (that is, certification of a collective action for trial) had never been announced by the Third Circuit.  Judge Smith stated that the test is whether the proposed collective plaintiffs are “similarly situated.”  The language of the FLSA itself makes clear that this must be the yardstick.  The Third Circuit, like some other Circuit Courts of Appeal, adopted the “ad-hoc approach” to whether plaintiffs are “similarly situated.”  The “ad-hoc approach” “considers all the relevant factors and makes a factual determination on a case-by-case basis.”  Those relevant factors, as listed by the panel here, 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.”  The burden is on plaintiffs to show that they are “similarly situated.”  The panel proceeded to use this test, and found that plaintiffs had not satisifed it.