Category: Wage & Hour Litigation

By: Gerald L. Maatman, Jr, Daniel D. Spencer, Jamar D. Davis, and Kenny T. Tran

Duane Morris Takeaways: On September 18, 2026, in Sara Reyes v. Grow Smart Labor, Inc., No. 1:24-CV-00028, 2026 U.S. Dist. LEXIS 213967 (E.D. Cal. Sep. 18, 2026), Judge Jennifer L. Thurston of the U.S. District Court for the Eastern District of California denied class certification in a California wage-and-hour action after concluding that, although Plaintiff could identify a common question concerning whether the Donohue meal period presumption arose from Defendant’s timekeeping data, the rebuttal of that presumption would require extensive individualized farm-by-farm, crew-by-crew and day-by-day inquiries, demonstrating that individualized inquiries dominated over common questions.

Case Background

The case arose from Plaintiff Sara Reyes’ employment with Defendant Grow Smart Labor, a farm labor contractor that supplies agricultural workers to third-party farms. Id. at *1. Grow Smart’s workforce was anything but uniform: employees were assigned to different crops, locations, supervisors, and jobs; some were paid hourly while others were paid on a piece-rate basis; and the company used different timekeeping systems, including crew timecards and individual timecards. Id. at *8. Grow Smart presented evidence that its operations and timekeeping practices varied substantially by assignment, such that “farm-by-farm” or “crew-by-crew” investigation regarding meal breaks would ensue. Id. at *8-9.

The Court’s Reasoning

The meal period analysis was the centerpiece of the decision. The District Court recognized that under Donohue v. AMN Services, LLC, 11 Cal. 5th 58 (2021), time records showing missed, short, or delayed meal periods without corresponding compensation can create a rebuttable presumption that the employer violated California law. Id. at *4. But the Court emphasized that the Donohue presumption does not eliminate the separate requirements imposed by Federal Rule of Civil Procedure 23. Id. at *6.

Reyes’ expert provided class-wide evidence by analyzing Grow Smart’s timekeeping data, finding that almost none of Grow Smart’s records included entries that showed when employee meal breaks began or ended. Id. at *7. Grow Smart did not challenge the expert’s experience or qualifications, nor did it offer any contrary analysis of its own data or any rebuttal expert opinions. Id. at *7-8.The District Court concluded that Reyes had demonstrated a common question of law and fact concerning whether the class’s timekeeping data could trigger the Donohue presumption. Id. at *8.

However, Grow Smart successfully argued, to which the magistrate judge agreed to and found, that Reyes had not demonstrated that common questions are likely to predominate the rebuttal portion of the case: the degree of individualized inquiries needed to assess meal period compliance across all of Grow Smart’s California operations. Id. Grow Smart employees worked at different farms under different supervisors, some worked in crews while others had individualized timekeeping, and records varied from assignment to assignment. Id. Most importantly, Grow Smart presented evidence that whether meal periods were required to be recorded could depend on whether operations “ceased” during the relevant meal period. Id. at *8-9.The Court therefore anticipated that a class trial would devolve into “a long series of back-and-forth debates” concerning “what happened on Farm A versus Farm B or under the leadership of Supervisor 1 versus Supervisor 2.” Id. at *9.

The individualized nature of those inquiries also affected Reyes’ proposed class under Rule 23(b)(2). The Magistrate Judge found that a class action cannot be certified under 23(b)(2) when “each class member would be entitled to an individual award of monetary damages” and “a different injunction or declaratory judgment”, which Reyes did not object to.  Id. at *9-10. Since Reyes no longer worked for Grow Smart or cited any plans to return, she had not demonstrated that she could pursue prospective relief on behalf of a class of current employees, which is a prerequisite to seek such relief on behalf of a class of current employees. Id. at *10.

Takeaways and Implications for Employers

For employers defending wage-and-hour class actions, Reyes underscores an important distinction between identifying a statistical pattern and proving a class-wide violation. A plaintiff may be able to point to a common data anomaly, such as missing meal punches or apparent deductions, but the defense can still defeat certification by demonstrating that the meaning of those records depends on operational context. Here, the significance of a missing punch could not be evaluated in a vacuum because the company’s vast agricultural operations used different recordkeeping practices, including crew-level records that did not necessarily apply uniformly across business functions.

The decision also highlights the value of developing a factual record demonstrating operational variation before the certification stage. Employers should preserve and present evidence concerning different worksites, supervisors, scheduling practices, timekeeping systems, compensation methods, written policies, policy changes, and the actual practices followed in the field. Reyes shows how those facts can transform an apparently simple “missing meal punch” case into a series of individualized factual inquiries that plaintiffs cannot readily resolve through a single database or expert model. The result is a defense-friendly application of Rule 23’s predominance requirement: common data may establish a common issue, but it does not necessarily establish a common answer to the ultimate liability question.

By Gerald L. Maatman, Jr., Gregory Tsonis and Christian J. Palacios

Duane Morris Takeaways:  In Brown v. Equity Prime Mortgage, LLC, Case No. 1:25-CV-1832, ECF No. 38 (N.D. Ga. Aug. 27, 2026), U.S. District Judge Michael L. Brown of the Northern District of Georgia granted a plaintiff’s motion for conditional certification of an FLSA collective action on behalf of a group of mortgage underwriters, alleging misclassification and unpaid overtime violations.  This decision is yet another reminder for employers of how lenient the evidentiary standard is in jurisdictions that apply the longstanding “two step” conditional certification analysis employed by many courts.  This decision further highlights the potential risk associated with classifying broad categories of employees as “exempt” for overtime purposes, while relying exclusively on the FLSA’s administrative exemption (i.e. office workers that require the exercise of independent judgment on important matters). 

Background

Plaintiff Shameen Brown worked for Defendant Equity Prime Mortgage, LLC (“EPM”), a national mortgage lender, as an underwriter between March 2023 and May 2024.  Order at 2.  On April 7, 2025, she filed a class and collective action complaint against her EPM alleging misclassification and unpaid overtime violations, specifically that she typically worked 60 or more hours per week but received no overtime compensation because EPM misclassified her and others as exempt under the Fair Labor Standards Act.  Id.

On September 12, 2025, Brown moved to conditionally certify a collective action, pursuant to 29 U.S.C. § 216(b) of the FLSA, of “[a]ll current and former employees of [EPM] working as Underwriters throughout the United States during the time period from three years prior to the filing of this Complaint until final resolution of [the] action.”  Id. at 2.  Brown submitted a proposed notice and requested permission to send it to potential collective members via mail, e-mail, and text message.  She also requested access to the last four digits of collective members’ social security numbers and permission to send a reminder notice halfway through the notice period.  Order at 2-3.  EPM opposed the motion. Id.

The Court’s Ruling

On August 27, 2026, the Court granted Plaintiff’s motion for conditional certification.  At the outset of its decision, the Court observed that the Eleventh Circuit “sanctioned a two-stage procedure for district courts to effectively manage FLSA collective actions in the pretrial phase.”  Order at 3.

At the first stage, or the “notice” stage, the Court observed that it need only determine whether there existed other “similarly situated” employees who should be notified of their ability to join the litigation, describing the applicable standard as “not particularly stringent” and “fairly lenient.”  Id. at 4.  Only at the second stage, typically after close of discovery, would Plaintiff be required to satisfy a higher evidentiary burden to prove that the collective action is similarly situated and could proceed.  Id. at 4-5.

In support of conditional certification, Plaintiff submitted affidavits from other former underwriters describing their duties, alleging each underwriter was required to adhere to the same “predetermined underwriting guidelines” without “any authority to deviate” from those guidelines.  Id. at 6.  EPM argued that its underwriters were not similarly situated because underwriters worked on different loans, such as retail and wholesale, and were “likely exercising more judgment than an underwriter working primarily on loans to individuals with steady W-2 income and low debt.”  Id. at 7.

The Court agreed with Plaintiff that a collective should be conditionally certified, reasoning that Defendant’s position that underwriters were “likely exercising more judgment” did not contradict the “simplicity” of Plaintiff’s claim that EPM’s underwriters were required to “strictly adhere” to the same “predetermined guidelines” when reviewing loans, and that they were required to apply these guidelines without discretion.  Id.  The Court also rejected Defendant’s argument that different underwriters had different job descriptions, holding that the postings contained only “minute differences” and involved “similar duties.”  Id. at 7.  Finally, the Court rejected Defendant’s argument that opt-in plaintiffs were not similarly situated because they used different job descriptions in their LinkedIn postings, quipping that “[o]ne man’s Trash Collector is another man’s Sanitation Expert.” Id. at 8.

As a result, the Court granted Plaintiff’s motion for conditional certification and further approved the form of the proposed notice, authorizing it to be sent via mail, email, and text message.  Id. at 9.  However, the court denied Plaintiff’s request to send a reminder notice halfway through the notice period, concluding that such notices “would be redundant and ‘could be interpreted as encouragement by the Court to join the lawsuit.”’  Id at 10.  It also denied Plaintiff’s request that Defendant be required to provide the last 4 digits of the collective members’ social security numbers, citing privacy concerns.  Id. at 11.

Takeaway for Employers

As this case illustrates, employers will continue to face uphill battles at the “conditional certification” stage in jurisdictions that apply the lenient “two step” FLSA certification analysis. Although the Fifth, Sixth, and, most recently, the Seventh Circuit have rejected the majority rule in favor of more rigorous tests, most federal circuits, including the Eleventh Circuit, continue to utilize this plaintiff-friendly analysis.  Additionally, employers in all sectors, and in the mortgage industry specifically, should be mindful that classifying employees as exempt carries legal risk, particularly where the employer cannot easily demonstrate that the employees maintain meaningful discretion and exercise independent judgment on important matters as part of their job duties to satisfy the FLSA’s administrative exemption.

By Gerald L. Maatman, Jr., Mike Rosenblatt, and Anna Sheridan

Duane Morris Takeaways: On September 3, 2026, in Harris, et al. v. Shoe Show, Inc., No. 3:25-CV-00398 (W.D.N.C. Sept. 3, 2026), Judge Susan C. Rodriguez denied Plaintiffs’ pre-discovery motion for conditional certification of an FLSA collective action and granted Defendant’s emergency motion for expedited, single stage discovery.  The decision joins the growing trend of courts declining to bifurcate FLSA discovery into conditional certification and post-conditional certification stages.

Case Background

Plaintiffs Benjamin Harris and Marticilla Roberts brought suit against Shoe Show, Inc., alleging violations of the Fair Labor Stands Act (“FLSA”).  According to the Complaint, filed June 11, 2025, Defendant Shoe Show, Inc. allegedly failed to pay store managers for all overtime hours worked.  Specifically, Plaintiffs allege that they were required to communicate with co-workers and supervisors about work-related matters outside of the store while off-the-clock.  The Complaint defined Plaintiffs’ proposed FLSA collective action as “all hourly-paid and overtime-eligible Store Managers, who worked over 40 hours in any workweek for Defendant” for the prior three plus years (the alleged lookback period was slightly longer than the typical three years for an FLSA claim due to an alleged tolling agreement).

On July 25, 2025, Plaintiffs filed a pre-discovery motion for conditional certification of a collective action under FLSA § 216(b).  On July 28, 2025, Defendant filed a motion to expedite discovery and requested a stay on briefing on Plaintiffs’ pre-discovery motion for conditional certification.  Defendant’s motion stated that Plaintiffs used “boilerplate declarations” that “call[ed] into question their evidentiary value.”  Defendant also provided declarations from thirty store managers to counter Plaintiffs’ claims to demonstrate that their claims “are not commonly shared by the Company’s Store Managers.”

The District Court’s Ruling

In a 3-page opinion, Judge Rodriguez denied Plaintiffs’ pre-discovery motion for conditional certification and granted Defendant’s motion for expedited discovery.  The Court was brief in its analysis, citing “the arguments, record, and applicable authority, including the text” of the FLSA.  Op. at 1.

The Court primarily relied on the growing case law revisiting the so-called “two-step process” for certification of FLSA collective actions.  Prior to 2021, in what is commonly referred to as the Lusardi approach, courts almost universally applied a two-step process to certification of FLSA collective actions, first requiring a plaintiff to make a modest factual showing that plaintiff was similarly situated to others, followed by a second stage with a more thorough examination of evidence with the benefit of discovery.  See Lusardi v. Xerox Corp., 118 F.R.D. 351 (D.N.J. 1987).  In 2021, the Fifth Circuit in Swales, et al. v. KLLM Transport Services, LLC, 985 F.3d 430, 436 (5th Cir. 2021), rejected the two-step approach for evaluating motions for certification of collective actions, holding that district courts should “rigorously scrutinize the realm of ‘similarly-situated’ workers … at the outset of the case.”  In 2023, the Sixth Circuit in Clark v. A&L Homecare & Training Center, LLC, 68 F.4th 1003 (6th Cir. 2023), likewise rejected the two-step approach, though introduced a new standard requiring plaintiffs to demonstrate a “strong likelihood” that other employees are “similarly-situated” to the plaintiff.

Though the Fourth Circuit has yet to weigh in on this issue, Judge Rodriguez cited the Fifth Circuit’s approach in Swales, the Sixth Circuit in Clark, and two district court decisions within the Fourth Circuit rejecting bifurcated certification under the FLSA. Op. at 2. See Hubbard v. Southwood Realty Co., No. 3:24-CV-00481, 2026 WL 823169 (W.D.N.C. Mar. 25, 2026); Mathews v. USA Today Sports Media Grp., LLC, 1:22-CV-1407, 2023 WL 3676795 (E.D. Va. Apr. 14, 2023).

Implications for Companies

When addressing FLSA collective action claims, corporate counsel should be cautioned against accepting Lusardi’s bifurcated approach without pushback and cite to Swales and Clark to slow down a plaintiff’s race to conditional certification. After Hubbard, the Harris decision is now the second district court opinion within the Fourth Circuit in 2026 to reject Lusardi and adopt a single, streamlined discovery approach for FLSA certification.  While most circuits still use the Lusardi approach, the circuit split created by the Swales (5th Circuit), Clark (6th Circuit), and Richards, et al. v. Eli Lilly & Co., 149 F.4th 901 (7th Cir. 2025), rejecting Lusardi shows that momentum is moving away from bifurcated discovery.

In the Fourth Circuit in particular, companies can add Harris, in addition to Hubbard and Mathews,to their toolkit to strengthen their arguments against the two-step Lusardi approach.  As with any circuit split, this latest trend against bifurcated discovery reinforces how critical it is for companies to understand the approach in the district where they are being sued, but the recent trend away from Lusardi should give companies the impetus in any jurisdiction for arguing against bifurcated discovery and rushing to conditional certification.

By Gerald L. Maatman, Jr., Tiffany Alberty, and Brett Bohan

Duane Morris Takeaways: On August 21, 2026, in Lightner v. DaVita, Inc., No. 23-CV-03104 (D. Colo. Aug. 21, 2026), Judge Nina Y. Wang of the U.S. District Court for the District of Colorado denied a motion seeking conditional certification of a collective action under the Fair Labor Standards Act (“FLSA”). Plaintiff, a former DaVita nurse, alleged that the healthcare company maintained a practice of failing to pay its nurses and technicians for rest breaks lasting fewer than 20 minutes across 41 states. The Court concluded that Plaintiff had not made the threshold factual showing necessary to demonstrate that putative collective members were victims of a common policy or plan, despite the lenient standard that applies at the conditional-certification stage. The decision highlights the evidentiary burden that FLSA plaintiffs must meet to obtain conditional certification and demonstrates that conclusory allegations and sparse evidence, even at this early stage, will not suffice.

Case Background

Plaintiff Anduin Lightner, an hourly nurse formerly employed by DaVita, a nationwide dialysis and healthcare provider, filed this action in November 2023. Id. at 1-3. She alleged that DaVita routinely required its nurses and technicians to “remain responsible for patient care” during their meal breaks, causing frequent interruptions. Id. at 2. Despite those interruptions, DaVita automatically deducted 30 minutes from each shift lasting at least six hours, depriving employees of compensation for time they actually worked. Id. Lightner further claimed that DaVita required employees to clock out for rest breaks lasting fewer than 20 minutes. Id. Combined, she claimed, this off-the-clock time resulted in unpaid overtime for employees who worked more than 40 hours per week. Id.

Based on these allegations, Lightner moved for conditional certification of a collective covering “all current and former hourly nurses and technicians” who provided “direct patient care” at DaVita facilities across 41 states and who allegedly lost overtime pay because of the company’s failure to compensate them for short rest breaks. Id. at 3. Before the Court ruled on the motion, Lightner withdrew her request to certify a separate meal-break collective, narrowing the case to the rest-break theory alone. Id. at 3, n. 1.

After Lightner filed her motion, DaVita moved to strike all consent forms on the grounds of false and misleading communications to recruit opt-in plaintiffs. Id. at 3-4. The Court agreed and ordered a curative notice; approximately half of the original opt-in plaintiffs filed corrected consent forms. Id. at 4.

The Court’s Opinion

Applying the two-step framework approved by the Tenth Circuit in Thiessen v. General Electric Capital Corp., the Court assessed whether Lightner had raised substantial allegations that the proposed collective members were victims of a single decision, policy, or plan. Id. at 4.

The Court found that the complaint contained only conclusory assertions about DaVita’s supposed practice of failing to pay for short rest breaks. Id. at 10. The allegations did not explain how the alleged practice was implemented, how frequently it deprived employees of compensation, or which of DaVita’s many facilities (spanning 41 states) were involved. Id. The Court noted that such bare-bones allegations, without more, do not qualify as “substantial” for conditional-certification purposes. Id.

Turning to the evidentiary record, the Court found the showing equally deficient. Id. at 11-13. Lightner supported her conclusory allegations with citations to only one piece of evidence: the time records for a single employee (who had not filed a corrected consent form and who did not identify in which state she worked), but the Court determined this did “little to establish a companywide practice, across 41 states, of failing to compensate employees for short rest breaks.” Id. at 11-12. Although Lightner attached hundreds of pages of deposition testimony to her motion, she failed to “cite any of this evidence in support of her claim.” Id. at 12.

Nevertheless, the Court reviewed the deposition testimony and acknowledged that testimony from several employees established that their meal breaks were frequently interrupted. Id. at 12. However, that testimony did not demonstrate that interrupted employees “started working again within 20 minutes of starting their break.” Id. The Court concluded that Lightner had not bridged the gap between the “interruptions happening” and an alleged 41-state common practice of not paying for sub-20-minute breaks. Id. at 13-14.

The Court emphasized that while the conditional-certification standard is lenient, “it is not nonexistent, and it cannot be satisfied by unsupported assertions.” Id. at 14. Accordingly, the Court denied the motion. Id. at 15.

Implications For Employers

The Lightner decision offers several important lessons. First, it reaffirms that, even at the initial conditional-certification stage where the standard is intentionally modest, courts will scrutinize whether a plaintiff has offered any concrete evidence of a common policy or plan. Conclusory allegations that a practice existed “companywide” will not carry the day absent at least some factual support tying the alleged practice to the employer’s operations.

Second, the decision illustrates the challenges FLSA plaintiffs face when attempting to certify geographically broad collectives. The Court was unwilling to conclude that, because meal breaks were sometimes interrupted for some employees at some locations, Plaintiff had shown that the company systematically refused to pay for compensable short breaks across dozens of states.

Third, the ruling underscores the importance of employers maintaining clear timekeeping practices and policies. DaVita’s own time records were a focal point of the Court’s analysis, and the absence of widespread evidence of unpaid sub-20-minute breaks in those records undermined Plaintiff’s theory.

Finally, the case serves as a cautionary note about opt-in solicitation practices in FLSA collective actions. The Court’s finding that Plaintiff’s counsel used false and misleading communications to recruit opt-ins—resulting in a curative notice order and the loss of approximately half the original opt-ins—demonstrates the risks of aggressive solicitation tactics and the scrutiny courts will apply to the process.

By Gerald L. Maatman, Jr., Betty Luu, and Jamar D. Davis

Duane Morris Takeaways:  On August 18, 2026, in Maynor Mejia v. RXO Last Mile, Inc., No. 22-CV-08976, 2026 WL 2415257 (N.D. Cal. Aug. 18, 2026), Judge Susan Illston of the U.S. District Court for the Northern District of California denied a motion to certify a class of independent-contractor drivers and others who provided services to assist with the delivery of goods who alleged they were misclassified under California law. This decision underscores that even a facially strong misclassification theory can fail under Rule 23 if there is a conflict between the named plaintiff and the class the plaintiff seeks to represent.  Courts will look beyond a uniform contracting framework and probe whether the class representative’s individual circumstances make the representative typical and adequate and will pay close attention to all asserted legal theories that may undermine any effort to seek class certification.

Background:

Plaintiff Maynor Mejia (“Plaintiff”) worked as a contract carrier and delivery driver providing last-mile delivery services for Defendant RXO Last Mile, Inc. (“RXO”) by picking up merchandise at merchants’ stores or warehouses and delivering and installing the merchandise at customers’ homes or businesses.  Id. at 1-2.  Like other contract carriers in RXO’s network, Plaintiff contracted with RXO as an independent contractor rather than as a direct employee, and his work was governed by a Delivery Service Agreement (DSA) that set out the terms of the parties’ independent-contractor relationship, including the screening, qualification, and approval requirements imposed on contract carriers and the employees of the contract carriers.  Id. at 2-3.

On April 10, 2026, Plaintiff moved to certify a class for all persons who performed delivery services for RXO that were classified as independent contractors or otherwise worked as non-employees during the class period and cursorily suggested in the alternative that Judge Illston certify three sub-classes of contract carriers, drivers, and helpers.  Id. at 3.  Following a hearing on June 12, 2026, Judge Illston ordered additional briefing from Plaintiff clarifying, among other things, Plaintiff’s proposed sub-classes and how each sub-class independently meets the Rule 23(a) and (b) requirements.  Id. at 4.  On June 26, 2026, Plaintiff proposed three sub-classes for (1) contract carriers, defined as individuals who executed a DSA with RXO; (2) drivers, defined as individuals engaged by a contract carrier to perform deliveries for RXO who did not themselves execute a DSA with RXO; and (3) helpers, defined as individuals who performed delivery services for RXO as non-employee helpers (the latter two are the “Driver and Helper subclasses”).  Id. at 4.  Plaintiff contended that RXO’s standardized contracting model and uniform operational requirements misclassified the persons in the sub-classes as independent contractors when they should have been treated as employees.  Id. at 1. 

Through discovery, RXO identified 2,485 class members, including 652 contract carriers, 1,251 drivers, and 582 helpers.  Id. at 9. Plaintiff testified in his deposition that, as a contract carrier, he treated at least some of the members of the Driver and Helper subclasses as his own employees: he paid taxes on their behalf, engaged them as his “‘employees’” paid them, issued W-2s, paid them overtime, instructed them to take meal breaks, and assigned them routes based on their performance.”  Id. at 11.

The Court’s Findings:

Judge Illston denied certification, finding that Plaintiff failed to satisfy Rule 23’s commonality, typicality, and adequacy requirements.  Id. at 13.

As a threshold matter, Judge Illston determined that Plaintiff satisfied the numerosity and ascertainability requirements.  Id. at 8-9.  Specifically, Judge Illston found the proposed class ascertainable because Plaintiff adequately identified the class members, and RXO confirmed through its discovery responses that 2,485 individuals fell within that class definition.  Id.

For the commonality requirement, however, Judge Illston found that Plaintiff failed to meet his burden, at least with respect to the Driver and Helper sub-classes, because Plaintiff’s reliance on the ABC test is incompatible with the joint employment theory of liability Plaintiff intended to pursue against RXO on behalf of those sub-classes.  Id. at 10-11.  The ABC test, adopted by the California Supreme Court in Dynamex Operations W., Inc. v. Superior Court, 4 Cal. 5th 903 (2018), and later codified by Assembly Bill 5, presumes that a worker is an employee unless the hiring entity establishes that: (A) the worker is free from the control and direction of the hirer in connection with the performance of the work; (B) the worker performs work outside the usual course of the hiring entity’s business; and (C) the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.  Id. at 6-7.

Judge Illston observed that Plaintiff’s motion to certify “focused almost entirely on the ABC test [which Plaintiff argued] encompasses all claims in the [Complaint] and applies to all three sub-classes.”  Id. at 10.  However, in Plaintiff’s reply brief and at the certification hearing, Plaintiff confirmed his intent to pursue a joint employment theory of liability as to the Drivers and Helpers who did not sign a DSA.  Id.  This created a fundamental tension in Plaintiff’s case, as the ABC Test applies to misclassification claims, where the question is whether a worker is an employee or independent contractor, but it does not apply to joint employment claims, where the worker is already recognized as an employee of one entity and the question is whether a second entity is also liable as a joint employed.  Id. at 10-11.  Judge Illston’s analysis was guided by the Ninth Circuit’s decision in Bowerman v. Field Asset Servs., Inc. 60 F.4th 459, 473 (9th Cir. 2023), which established that because the “reasons for selecting the ABC test are uniquely relevant to the issue of allegedly misclassified independent contractors, the ABC test does not extend to the joint employment context, where those concerns are no longer present.”  Id. at 10. 

Judge Illston also rejected Plaintiff’s alternative argument that RXO was a joint employer of Driver and Helper sub-classes under the Martinez test.  Id. at 11.  Under Martinez v. Combs, 49 Cal. 4th 35, 64 (2010), a joint employment relationship exists where the alleged joint employer: “(1) have exercised control over the workers’ wages, hours, or working conditions; (2) suffered or permitted them to work; or (3) engaged them, thereby creating a common law employment relationship.”  Id.  Judge Illston found this argument “unavailing” because Plaintiff failed to “explain how the joint employment test would apply and how it would not require an individualized inquiry” into the employment practices of each Contract Carrier.  Id.

Judge Illston next considered the typicality and adequacy requirements together, noting that the considerations underlying these two prerequisites “overlap considerably.”  Id. at 11.  Judge Illston concluded that Plaintiff satisfied neither requirement with respect to the Driver and Helper subclasses because he had a conflict of interest with those sub-classes. Id. at 12.  Specifically, under Section 5(d) of the DSA, Plaintiff agreed to “assume sole responsibility” for his workers’ compliance with “all applicable laws, rules, and regulations, including but not limited to wage and hour laws…”  Id.  Thus, Plaintiff could be individually liable to the members of the Driver and Helper subclasses for the very claims he seeks to represent on their behalf.  Id.  As Judge Illston explained, “in order for [Plaintiff] to argue that his Drivers and Helpers were deprived of accurate wage statements, breaks, pay, and other employment protections, he would also have to admit that he deprived them of such employee benefits, creating antagonistic interests between [Plaintiff] and the subclasses he seeks to represent.”  Id.

Having concluded that Plaintiff failed to carry his burden on the commonality, typicality, and adequacy requirements under Rule 23, Judge Illston denied Plaintiff’s motion for class certification in its entirety.  Id. at 13.

Implications for Companies

This decision carries practical implications for companies utilizing independent-contractor structures.  Companies should ensure their contracting agreements expressly allocate wage-and-hour compliance obligations to downstream contractors, as such provisions expose named plaintiffs to individual liability for the very claims they assert on behalf of a class, creating conflicting interests that defeat typicality and adequacy.

The decision also serves as a useful reminder to be pragmatic and to scrutinize whether a plaintiff’s legal theories are consistent with binding precedent.  Companies should pursue early discovery into the working relationship between a plaintiff and workers.  As this case demonstrates, a named plaintiff’s personal employment practices can defeat certification even where a uniform contracting template governs the workforce.

By Gerald L. Maatman, Jr., Jennifer A. Riley, Betty Luu, and Jamar Davis

Duane Morris Takeaway:  On July 21, 2026, in Sara Reyes, et al v. Grow Smart Labor, Inc., et al, Case No. 1:24-CV-00028, Magistrate Judge Stanley Boone of the U.S. District Court for the Eastern District of California issued findings and recommendations denying an employee’s motion for class certification under the California Labor Code.  This decision is a reminder that courts scrutinizing motions for class certification will conduct a rigorous, fact-intensive analysis of each Rule 23 requirement rather than accept generalized allegations of common policies or practices.  Even where numerosity is easily met, courts will closely examine whether the proposed class is sufficiently uniform across workers, supervisors, pay methods, and timekeeping systems before finding that commonality, typicality, and predominance are satisfied.

Background:

On January 5, 2024, Plaintiff Sara Reyes (“Plaintiff”) filed a class action asserting claims for violations of the Migrant and Seasonal Agricultural Worker Protection Act and the California Labor Code on behalf of herself and those similarly situated in the State of California.  Id. at 6. 

Defendant Grow Smart Labor, Inc. (“Grow Smart”) employed Plaintiff as a grape picker and packer in August 2023 for a two-week period.  Id. at 3-4.  Plaintiff alleges she was paid less than the piece-rate basis, was not separately compensated for rest periods or other nonproductive time, and that Grow Smart supervisors instructed her and other employees not to take meal periods or rest breaks, instead directing them to continue working.  Id. at 4-6.

On May 14, 2026, Plaintiff moved to certify a class of all non-exempt agricultural employees employed by any Grow Smart from January 5, 2021 to the present.

The Magistrate Judge’s Findings and Recommendations:

The Magistrate Judge recommended denying Plaintiff’s motion for class certification and addressed each Rule 23(a) prerequisite in turn.  As to numerosity, the Magistrate Judge agreed with Plaintiff that her proposed subclasses (ranging from 160 to 1,067 members) comfortably exceeded the roughly 40-member threshold generally required in the Ninth Circuit.  Id. at 22-23.  On commonality, however, the Magistrate Judge found Plaintiff failed to meet her burden as to both her meal-break and piece-rate claims.  Id. at 23.  The Magistrate Judge reasoned that Grow Smart’s workforce was too heterogeneous to generate common answers, since employees worked for different third-party contractees, at different locations, under different supervisors, different pay methods, and different timekeeping systems.  Id. at 31-32.  The Court also rejected Plaintiff’s reliance on the rebuttable presumption of meal-period violations recognized in Donohue v. AMN Services, LLC, 11 Cal. 5th 58 (2021), explaining that Wage Order No. 14, unlike the wage order at issue in Donohue, exempts agricultural employers from recording meal periods when operations cease, so the absence of recorded breaks did not, on its own, establish noncompliance on a class-wide basis.   Id. at 23-32. 

On typicality, the Magistrate Judge found Plaintiff’s claims were not typical of the class she sought to represent.  Id. at 33.  Plaintiff worked only eight shifts, all for a single contractee, all on a piece-rate basis, and had no experience with the different contractees, supervisors, pay methods, or timekeeping systems used elsewhere in Grow Smart’s operations.   Id. at 33-35.  The Magistrate Judge also found Plaintiff could not represent employees who, beginning in March 2024, became subject to a mandatory arbitration agreement that Plaintiff herself never signed.  Id. at 33-38.  Because Plaintiff was not typical, the Magistrate Judge likewise found her inadequate to represent the class generally and, specifically, inadequate as to the arbitration-agreement subgroup.  Id. at 38.

Turning to Rule 23(b), the Magistrate Judge found Plaintiff met neither subsection she invoked.  Id. at 39.  Under Rule 23(b)(2), the Magistrate Judge held that class treatment was inappropriate because Plaintiff sought individualized monetary damages (not solely injunctive or declaratory relief), which Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 360-361 (2011),forecloses under that subsection, and because the arbitration agreements and varying work conditions meant no single injunction could resolve the claims class-wide.   Id. at 39-40.  Under Rule 23(b)(3), the Magistrate Judge found predominance lacking for the same reasons commonality failed, and further found Plaintiff had not shown superiority, since resolving the claims would require individualized inquiries into each employee’s assignment, contractee, timekeeping format, and pay method.  Id. at 41-43.  Having found Plaintiff met only numerosity while failing commonality, typicality, and both invoked Rule 23(b) categories, the Magistrate Judge recommended that the motion for class certification be denied in full.  Id. at 43. 

It should be noted that the Magistrate Judge’s findings and recommendations remain subject to adoption by the District Judge.  Under the Eastern District of California’s Local Rule 304 and 28 U.S.C. § 636(b)(1)(B) and (C), the parties have fourteen days from service to file objections, and the District Judge will then conduct the applicable review before deciding whether to adopt, modify, or reject the Magistrate Judge’s recommendation. 

Implications for Companies

This decision offers useful guidance for agricultural employers and other companies using third-party staffing arrangements across varied worksites.

The decision demonstrates that a named plaintiff’s own work history can substantially narrow the class she is permitted to represent, giving employers grounds to contest an overbroad proposed class even when certain claims otherwise survive.  Further, adopting an arbitration agreement even after litigation begins can carve out a meaningful subset of the workforce from any later-certified class, since a plaintiff who never signed such an agreement cannot represent employees who did.

By Gerald L. Maatman, Jr., Olga A. Romadin, and Elizabeth G. Underwood

Duane Morris Takeaways: On June 29, 2026, in Martinez v. T. Slack Environmental Services, Inc., No. A-1008-24 (N.J. App. Div. June 29, 2026), the New Jersey Appellate Division addressed key issues in a wage and hour representative action brought pursuant to the New Jersey Wage and Hour Law (“WHL”) and the Prevailing Wage Act (“PWA”), including whether a representative action brought under the WHL and the PWA is distinct from a class action under N.J. Rule 4:32-1, and the appropriate statute of limitations for companion wage claims.  Id. at 2.  The Appellate Division affirmed in part and reversed in part a decision of the trial court holding that the WHL and PWA statutory language is independent of Rule 4:32-1 and therefore does not require class certification, and finding that a two-year—and not six—statute of limitations applies to WHL and Earned Sick Leave Law (“ESLL”) claims.  Id. at 3.

This decision is significant for employers in because it confirms that representative wage actions under New Jersey’s wage statutes may proceed outside Rule 4:32-1 class certification procedures while also clarifying that WHL and ESLL claims carry a two-year limitations period, and PWA claims carry a six-year limitations period as breach of contract claims.

Case Background

Juan Martinez (“Martinez”) alleged that he worked as an hourly laborer for T. Slack Environmental Services, Inc. (“T. Slack”), a small, non-union New Jersey contractor that employed between six and ten hourly laborers subject to the same pay practices from 2006 to 2019.  Id. at 3-4.

In February 2020, Martinez filed a lawsuit in which he alleged that T. Slack failed to pay required prevailing wages for public work, including for tasks classified as “B” and “C” laborer functions under the PWA.  Id. at 4.  He also claimed that defendants miscalculated overtime by paying him at lower rates rather than using a blended or weighted rate when he worked on both public and private projects or in different job titles during the same week.  Id. at 5.  Martinez further alleged uncompensated “off-the-clock” work, including transporting equipment to and from worksites and defendants’ Kenilworth facility, and asserted that earned sick leave was improperly calculated using the lower private wage rate.  Id. at 5-6.

Following discovery conducted under the supervision of a special adjudicator, Martinez moved to certify a statutory representative action under the WHL and PWA in September 2024.  Id. at 6-7.  Defendants opposed on several grounds, arguing that Martinez had not satisfied the class action requirements of Rule 4:32-1, that a representative action was not permissible outside of Rule 4:32-1, that the putative class lacked numerosity, that Martinez was not an adequate representative, and that individualized questions precluded both representative and class treatment.  Id. at 7.

The motion court granted Martinez’s motion, certified the matter as a representative action, designated Martinez as the representative of defendants’ current and former employees, and imposed a six-year look-back period for overtime claims from February 28, 2014, to February 28, 2020.  Id. at 7.  Defendants appealed.  Id. at 8.

The Appellate Division’s Decision

The Appellate Division held, consistent with its recent decision in Cano v. County Concrete Corp., 483 N.J. Super. 459 (App. Div. 2026), that “the statutory language of both the WHL and PWA is independent of Rule 4:32-1 and therefore does not require class certification.”  Id. at 3.  The Appellate Division explained that the remedial nature of the PWA permits any worker “to maintain such action for and on behalf of [themselves] or other work[ers] similarly situated,” N.J.S.A. 34:11-56.40, and that this statute addresses the similar concerns of the WHL and ESLL.  Id. at 15.

In addition, the Appellate Division rejected T. Slack’s argument that Martinez was required to present evidence of other similarly situated employees to qualify as a representative action.  Id.  Instead, it determined that, as in Cano, Martinez’s complaint put defendants on notice regarding the existence of similarly situated employees, and that the plain language of the PWA and WHL does not require a named plaintiff to identify the similarly situated employees to defendants.  Id. at 15-16.  Defendants, moreover, were already aware of approximately fifteen employees whose names and contact information had previously been provided to Martinez.  Id. at 16.

Lastly, the Appellate Division reversed the six-year look-back period for WHL claims, and, by incorporation, ESLL claims.  Id. at 18.  Relying on Maia v. IEW Constr. Grp., 257 N.J. 330 (2024), the Appellate Division held that the 2019 amendment extending the WHL limitations period from two years to six years applies prospectively only, so the two-year limitations period governed those claims.  Id.

On the other hand, the Appellate Division affirmed the six-year look-back period for PWA claims.  Id. at 18-19.  Because PWA claims for unpaid prevailing wages are treated as breach of contract claims, and the PWA does not provide its own limitations period, the general six-year contract limitations period under N.J.S.A. 2A:14-1 applied.  Id. at 19.

Implications For Employers

This decision confirms that representative wage actions under New Jersey’s WHL, PWA, and ESLL may proceed independently of Rule 4:32-1 class certification requirements.  While this may expand procedural avenues for plaintiffs pursuing wage claims on behalf of similarly situated employees, employers should note that the decision also limits potential exposure for WHL and ESLL claims by applying a two-year statute of limitations to pre-2019 conduct.

By Gerald L. Maatman, Jr., Rebecca S. Bjork, and Olga A. Romadin

Duane Morris Takeaways: On June 3, 2026, addressing an issue of first impression on overtime gap time, the U.S. Court of Appeals for the Third Circuit in U.S. Department of Labor v. Comprehensive Healthcare Mgmt. Servs. LLC, No. 24-2842, 2026 WL 1582064 (3d Cir. June 3, 2026), partially reversed an order of a district court that had awarded damages to the U.S. Department of Labor(“DOL”), which had brought a lawsuit on behalf of 6,000 healthcare employees, alleging various overtime violations under the Fair Labor Standards Act (“FLSA”) by Comprehensive Healthcare Management Services LLC (“Comprehensive”). On appeal, Comprehensive argued that the district court had erred in finding that the FLSA affords a remedy for overtime gap time claims, which address non-overtime hours in a non-exempt employee’s workweek, as well as misapplied a lower burden of proof to some of the claims against it, had erred in its finding that certain employees were nonexempt, and in some of its factual findings. The Third Circuit agreed with the employer in part, and vacated and remanded the matter to the district court.

Case Background

In 2018, the DOL brought a lawsuit in the U.S. District Court for the Western District of Pennsylvania against fifteen nursing and assisted living entities owned and operated by Comprehensive Healthcare Management Services LLC and its chief executive officer, alleging that the defendants had failed to pay hourly employees for all hours worked and the appropriate rate of pay, as well as failing to keep accurate pay records in violation of the FLSA. Id. at *1. One of the claims involved overtime gap time, which occurs when an employee who exceeds the overtime threshold does not receive pay for all non-overtime hours worked. Id.

In January 2024, the district court held a bench trial, following which it ruled in favor of the DOL, finding that there were “system errors” in the calculation of pay. Id. at *2. The district court explained that the defendants’ timekeeping system had not kept an accurate record of employees’ working hours, and Comprehensive paid employees for scheduled hours instead of hours they actually worked, as well as that the system automatically deducted meal breaks, even if employees had worked through them, and that the defendants had failed to accurately pay overtime wages. Id. The district court found that employees were not paid the required one-and-one-half regular rate required under the FLSA, and that the regular rate did not include pay that was required to be calculated in it, including shift differentials, bonuses, and other types of pay. Id. The district court also concluded that some employees had been improperly classified as exempt from the FLSA’s overtime requirement. Id. The district court, noting that the Third Circuit had not yet ruled upon the “viability of overtime gap time claims,” nonetheless awarded $35,804,438.20 in damages against Comprehensive for these violations. Id. at *3. Comprehensive appealed.

The Third Circuit’s Decision

On appeal, Comprehensive argued that the district court had erred in finding that claims for overtime gap time were cognizable under the FLSA. Id. at *3. The Third Circuit noted a disagreement among the circuits, with the Second Circuit having opined that overtime gap time claims were not cognizable under the FLSA in Lundy v. Cath. Health Sys. Of Long Island, Inc., 711 F.3d 106, 115-17 (2d Cir. 2013), while the Fourth Circuit found that they were in Conner v. Cleveland County, 22 F.4th 412, 426 (4th Cir. 2022). Id. Writing for the majority in a split panel decision, Third Circuit Chief Judge Michael A. Chagares explained that “[w]hen the statutory language is clear, the text is the beginning and the end of our inquiry.” Id. at *4. On review of the text of the FLSA, the appellate court found no mention of overtime gap time and concluded that the statute does not provide a remedy to overtime gap claims.  Id. In finding that there was no support in the text of the statute for an overtime gap claims, the court of appeals rejected the Labor Secretary’s argument that under § 207 of the FLSA, the term “regular rate” contemplates an overtime requirement, and so requires that a regular rate must be paid for all hours worked. Id. Further, the Third Circuit was unconvinced by the Secretary’s reference to the DOL’s guidance, which stated that overtime under the FLSA requires the payment of all straight time worked during non-overtime hours, finding that this ran counter to the unambiguous text of the Act. Id. at *4-5. Finally, agreeing with the Court of Appeals for the Second Circuit, the Third Circuit determined that individuals seeking to bring such claims could do so under state laws. Id. at *5. Thus, agreeing with Comprehensive, the Third Circuit reversed the district court’s ruling finding that Comprehensive had violated the FLSA by failing to compensate certain employees for overtime gap time. Id.

In reviewing the remaining arguments brought by Comprehensive, the Third Circuit court found that the district court did not err in applying a lower evidentiary burden to the claims against Comprehensive under the Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946) burden-shifting framework, where an employee alleging an employer failed to keep adequate records may do so by producing sufficient evidence prior to the burden being shifted to the employer to counter the claims. Id. at *5-6. Noting that the district court based its findings on the time and pay records produced by Comprehensive, the appellate court concluded that “Mt. Clemens did not affect the analysis for these claims.” Id. at *6. The Third Circuit also found no clear error in the district court’s factual findings or finding of an ongoing pattern or practice of regular rate miscalculation, writing that the single witness that Comprehensive had produced in support of its contention that employees were paid for all hours worked instead of based on their scheduled hours was found to be unreliable by the district court, and that the Secretary of Labor had produced more concrete proof in the form of an investigation, and documentary proof corroborated by hundreds of employees. Id. Next, the Third Circuit affirmed the lower court’s finding that employees at different facilities were regularly not paid for work performed through meal breaks based on a representative sample of employee testimony and the testimony of the company’s regional consultant. Id. at *7.

Finally, the Third Circuit agreed with Comprehensive that the district court’s determination that certain employees were not exempt from the FLSA’s overtime requirements was an error because it had applied the “plain and unmistakable” burden of proof to its analysis, but under the U.S. Supreme Court’s decision in Encino Motorcars, LLC v. Navarro, 584 U.S. 79 (2018), an employer seeking to prove an employee’s exempt status does so by a preponderance of the evidence, and vacated the part of the lower court’s decision and remanded it for further proceedings. Id. at *8-9.

In a partial dissent, U.S. Circuit Court Judge Jane R. Roth wrote that the text of the FLSA “is far from clear,” and the case law defining a regular rate offered additional confusion that could be addressed by making the actual rate, contracted rate, and regular rate of pay to be the same, aligning with the Fourth Circuit decision in Conner and the U.S. Department of Labor guidance that the majority declined to endorse. Id. at *10-11.

Implications For Employers

Employers with a workforce falling under the FLSA should take heed in ensuring that exempt employees, such as those working in an executive, administrative, or professional capacity, meet the statutory minimums such as salary requirements to qualify as bona fide exempt from overtime requirements. Maintaining accurate pay and time records for exempt and non-exempt workers and conducting regular audits may serve well in defending against miscalculation allegations, as the appellate court here confirmed the lower court’s conclusion based on records provided by the company.

This federal appellate court decision further signals a circuit split on the issue of whether overtime gap time claims are cognizable under the FLSA, with the Third Circuit here joining the Second Circuit in deciding that under the plain meaning of the text they are not, while the Fourth Circuit maintains that the FLSA does offer relief for plaintiffs seeking to bring such claims.

By Gerald L. Maatman, Jr., Elisabeth Bassani, and Olga A. Romadin

Duane Morris Takeaways: On May 18, 2026, Judge Robert J. Colville of the U.S. District Court for the Western District of Pennsylvania issued an order severing claims of over 14,000 plaintiffs who had alleged violations of the Fair Labor Standards Act (“FLSA”) and state laws in Brannon, et al. v. Federal Express Corp., No. CV 2:24-1128, 2026 WL 1382330 (W.D. Pa. May 18, 2026), Abner, et al. v. Federal Express Corp., No. 2:25-1129, 2026 WL 1382330 (W.D. Pa. May 18, 2026), and Smith, et al. v. Federal Express Corp., No. 2:25-1507, 2026 WL 1382330 (W.D. Pa. May 18, 2026). Following an order to show cause, plaintiffs in each of the three matters filed motions to sever and to transfer venue, which the Court granted, tolling the statute of limitations to permit individual plaintiffs to file individual claims.

Case Background

Three mass actions were filed following voluntary decertification and dismissal by plaintiffs in Claiborne, et al. v. FedEx Ground Package Systems, Inc., No. 2:18-CV-1698 (W.D. Pa.), a conditionally certified class and collective action consisting of over 30,000 opt-ins alleging FLSA overtime violations which had been pending in the Western District of Pennsylvania for almost seven years. Id. at *1. The Court subsequently granted a Motion on Misjoinder, Change of Venue, and Separate Trials, and severed the claims of all plaintiffs in Claiborne, and a related matter entitled Atwood, et al. v. FedEx Ground Package Systems, Inc., No. 2:24-CV-1127 (W.D. Pa.). Id. The Court also issued a Memorandum Order in which it opined that Brannon and Abner were also likely mis-joined, and ordered the plaintiffs in those matters to show cause. Id. In response, the plaintiffs motioned to sever and transfer their claims to appropriate forums, as the court had granted in Claiborne and Atwood, which FedEx opposed. Id.

The Court’s Decision

The Court, including the Smith matter in its opinion due to all three matters being represented by the same law firm, granted the plaintiffs’ motion to sever, and tolled the statute of limitations at 60 days, though it declined to transfer the claims of the thousands of individual plaintiffs to appropriate forums as requested because it determined that doing so would be overly burdensome for the Court and the Clerk’s Office. Id. at *3.

Noting the wide disparity in the numbers of putative plaintiffs in Claiborne and Atwood, which had twelve and two, respectively,and the hundreds and thousands of named plaintiffs in the three matters at issue here, the Court warned that the mass actions had the appearance of “a tactical maneuver around the standard or collective action procedures,” which the plaintiffs were unable to maintain, and the Court found to be improper. Id. at *2.

The Court found, as it had in its prior orders, that the plaintiffs here were mis-joined under Federal Rule of Civil Procedure 20. Id. at *3. Noting that the U.S. District Court for the District of Massachusetts echoed its conclusions on mis-joinder in related cases before it, the Court wrote that its prior conclusions regarding impracticality of litigating the claims in Claiborne and Atwood were equally applicable here in that holding a trial for 14,296 individual plaintiffs with individual issues predominating was “patently untenable.” Id. Further, the Court found that the claims did not arise out of the same transaction, occurrence, or series of transactions or occurrences, as required for joinder under Rule 20, and thus elected to sever the claims. Id.

Finally, the Court determined that the plaintiffs’ severed claims would be continuations of their current cases, and therefore permitted an extension of the tolling period to allow them 60 days to file individual actions in appropriate forums, but cautioned that any further efforts to bring additional mass claims would be “at their own peril.” Id. at *4.

Implications For Employers

For employers with a workforce that may fall under the FLSA, this decision offers practical insight into maintaining a compliant overtime program.

The Court’s decision additionally highlights the proliferation of creative procedural tactics, such as mass actions, undertaken by plaintiffs’ attorneys as a strategic loophole when class and collective actions are otherwise unsuccessful.