{"id":1735,"date":"2024-09-12T09:33:11","date_gmt":"2024-09-12T13:33:11","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/classactiondefense\/?p=1735"},"modified":"2024-09-12T09:33:11","modified_gmt":"2024-09-12T13:33:11","slug":"the-class-action-weekly-wire-episode-73-wisconsin-federal-court-blazes-a-new-path-on-flsa-conditional-certification-process","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/classactiondefense\/2024\/09\/12\/the-class-action-weekly-wire-episode-73-wisconsin-federal-court-blazes-a-new-path-on-flsa-conditional-certification-process\/","title":{"rendered":"The Class Action Weekly Wire \u2013 Episode 73: Wisconsin Federal Court Blazes A New Path On FLSA Conditional Certification Process"},"content":{"rendered":"<p><strong><em><a href=\"http:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2024\/09\/73-cover.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignleft size-full wp-image-1736\" src=\"http:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2024\/09\/73-cover.png\" alt=\"\" width=\"1920\" height=\"1080\" srcset=\"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2024\/09\/73-cover.png 1920w, https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2024\/09\/73-cover-300x169.png 300w, https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2024\/09\/73-cover-1024x576.png 1024w, https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2024\/09\/73-cover-768x432.png 768w, https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2024\/09\/73-cover-1536x864.png 1536w\" sizes=\"auto, (max-width: 767px) 89vw, (max-width: 1000px) 54vw, (max-width: 1071px) 543px, 580px\" \/><\/a><\/p>\n<p><\/em><\/strong><\/p>\n<p><strong><em>Duane Morris Takeaway:<\/em><\/strong> This week&#8217;s episode of the Class Action Weekly Wire features Duane Morris partner Jennifer Riley and associates Greg Tsonis and Derek Franklin with their analysis of a Wisconsin federal court decision weighing in on the two-step process for issuing notice of a Fair Labor Standards Act (\u201cFLSA\u201d) collective action, illustrating a gaining momentum among district courts toward rejecting a two-step \u201cconditional certification\u201d approach in favor of a one-step standard.<\/p>\n<p>Check out today\u2019s episode and subscribe to our show from your preferred podcast platform: <a href=\"https:\/\/open.spotify.com\/show\/2HZP212kEycOPXPY7Qppzr\">Spotify<\/a>, <a href=\"https:\/\/music.amazon.com\/podcasts\/a23249e0-d394-470c-ba27-b4d87dcf4381\/the-class-action-weekly-wire\">Amazon Music<\/a>, <a href=\"https:\/\/podcasts.apple.com\/us\/podcast\/the-class-action-weekly-wire\/id1709589577\">Apple Podcasts<\/a>, Samsung Podcasts, <a href=\"https:\/\/podcastindex.org\/podcast\/6626090\">Podcast Index<\/a>, <a href=\"https:\/\/tunein.com\/radio\/The-Class-Action-Weekly-Wire-p3882927\/\">Tune In<\/a>, <a href=\"https:\/\/www.listennotes.com\/podcasts\/the-class-action-weekly-wire-duane-morris-uQEYrwG7MOU\/\">Listen Notes<\/a>, <a href=\"https:\/\/www.iheart.com\/podcast\/269-the-class-action-weekly-wi-124460701\/\">iHeartRadio<\/a>, <a href=\"https:\/\/www.deezer.com\/us\/show\/1000307221\">Deezer<\/a>, and <a href=\"https:\/\/www.youtube.com\/@DMClassAction\">YouTube<\/a>.<\/p>\n<p><iframe loading=\"lazy\" title=\"Episode 73: Wisconsin Federal Court Blazes A New Path On FLSA Conditional Certification Process\" width=\"525\" height=\"295\" src=\"https:\/\/www.youtube.com\/embed\/8sOEBtHXBEU?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<p><strong><em>Episode Transcript<\/em><\/strong><\/p>\n<p><strong>Jennifer Riley:<\/strong> Thank you for being here again, for the next episode of our weekly podcast, the Class Action Weekly Wire. I\u2019m Jennifer Riley and with me today are Greg Tsonis and Derek Franklin. Thank you for being on the podcast today guys.<\/p>\n<p><strong>Derek Franklin:<\/strong> Great to be here, thanks for having me.<\/p>\n<p><strong>Greg Tsonis:<\/strong> Yes, thanks Jen, I\u2019m happy to be here.<\/p>\n<p><strong>Jennifer:<\/strong> Today we are discussing a recent ruling coming from the U.S. District Court for the Eastern District of Wisconsin, <em>Laverenz v. Pioneer Metal Finishing<\/em>. Greg, can you tell us a little about the background of this case?<\/p>\n<p><strong>Greg:<\/strong> Sure, so in this case the plaintiff Amanda Laverenz filed a class and collective action lawsuit under the FLSA and Wisconsin state law alleging that Pioneer deprived her and other similarly situated hourly employees of wages through its practice of rounding employees\u2019 time clock entries to the nearest quarter hour and paying employees based on that rounded time. Now the plaintiff moved for conditional certification of a collective action, and argued that the court should employ a lenient two-step certification process established in 1987 by a Third Circuit district court in <em>Lusardi v. Xerox Corp<\/em>. Under the <em>Lusardi<\/em> framework, named plaintiffs need only present what courts have described as a \u201cmodest factual showing\u201d that similar potential plaintiffs exist to satisfy the first step of conditional certification. In the second step, assuming others have joined the lawsuit as opt-in plaintiffs and the parties have completed discovery on the merits, the court would then make a final determination whether the opt-in plaintiffs actually qualify as parties to the litigation on the basis of substantial similarity to the named plaintiffs in what is known as a second-stage final certification order. Now here, Pioneer responded that the Court should follow the Fifth Circuit\u2019s 2021 decision in <em>Swales v. KLLM Transport Services, LLC<\/em>, which rejected the longstanding approach developed in <em>Lusardi<\/em>.\u00a0 Pioneer argued that the two-step approach \u201cis inconsistent with the FLSA\u2019s purpose and Seventh Circuit case law stressing the similarities of FLSA certification to Rule 23 certification, which requires \u2018rigorous\u2019 scrutiny.\u201d<\/p>\n<p><strong>Jennifer:<\/strong> Yes, the <em>Swales<\/em> ruling changed the conditional certification analysis significantly. The Fifth Circuit in that case recognized that nothing in the text of the FLSA even mentions \u201cconditional certification.\u201d The <em>Swales<\/em> court directed that courts should consider all available evidence to determine if analyzing the merits of pending claims required a \u201chighly individualized inquiry\u201d into each opt-in\u2019s circumstances and, if so, to declare a certification inappropriate. Derek, which standard did the court in the <em>Laverenz<\/em> action ultimately use?<\/p>\n<p><strong>Derek:<\/strong> Well, Jen, the court chose to go with Pioneer\u2019s requested standard. The court adopted the Fifth Circuit\u2019s FLSA collective certification approach in Swales and denied Plaintiff\u2019s motion for conditional certification. The court actually cited in its ruling a 2022 Annual Class Action Report our colleague and Duane Morris partner Gerald L. Maatman, Jr. served as General Editor. In its ruling, the court noted that federal courts in 2021 granted FLSA conditional certification motions in 81% of rulings on such motions during the first stage of the two-step process despite \u2013 in that same year \u2013 granting 53% of FLSA decertification motions at the next stage. The Court gleaned from that data that \u201cover half of those conditionally certified putative classes failed to survive upon a more rigorous review\u201d and concluded, as a result, that the two-step certification process \u201cdefeats the very goal it set out to accomplish \u2014 efficiency.\u201d The court ultimately found that \u201csignificant factual differences exist regarding how the [time rounding] policy affected each employee\u201d given that \u201cthe rounding benefitted some and negatively affected others.\u201d The court also stated that too many individualized claims remained in the matter that would necessarily involve fact-specific inquiries. And the court explained that \u201cit would seem particularly inefficient and unfair to notify a broad class of employees,\u201d given its conclusion that Plaintiff\u2019s proposed collective action claims \u201cinvolve highly individualized inquiries and defenses.\u201d\u00a0 Toward that end, the Court determined that \u201cauthorizing notice in a case such as this would turn a tool into a sword,\u201d and that \u201cmany a plaintiff would likely join the line, requiring Pioneer to defend dozens \u2014 possibly hundreds \u2014 more claims despite the fact that Laverenz has not even showed a violation of law.\u201d Ultimately, the Court concluded that Plaintiff \u201cfailed to provide a sufficient basis for the court to facilitate notice to potential plaintiffs,\u201d and therefore, the Court denied Plaintiff\u2019s motion for conditional certification.<\/p>\n<p><strong>Jennifer:<\/strong> Wow, thanks for the overview. What a significant ruling for employers. How do you both imagine this will impact future rulings on conditional certification in the Seventh Circuit?<\/p>\n<p><strong>Greg:<\/strong> Well Jen, the Duane Morris Class Action Review actually analyzed FLSA conditional certification rates, and, <a href=\"https:\/\/online.flippingbook.com\/view\/954167557\/256\/\">in 2023<\/a>, plaintiffs won 75% of first stage conditional certification motions. However, only 56% of those conditionally certified collective actions survived motions for decertification involving a more rigorous scrutiny. Hence, the stakes are quite meaningful in terms of the approach outlined in the <em>Laverenz<\/em> ruling.<\/p>\n<p><strong>Derek:<\/strong> And I would add to that \u2013 as any employer who has been sued by a plaintiff seeking to represent an FLSA collective action knows \u2013 the discovery burden imposed by application of the two-step Lusardi standard is onerous. Full merits discovery lasting more than a year is common, as opposed to a narrowly-targeted investigation of the work performed by the plaintiffs along with facts relating to the relevant factors. For that reason alone, employers with operations within the Seventh Circuit will be happy to know they can cite this ruling in the future.\u00a0 While no one can predict the future with any particular degree of certainty, it seems likely that this new legal trend regarding the collective action notice process may eventually need to be resolved by the U.S. Supreme Court.<\/p>\n<p><strong>Jennifer:<\/strong> Thank you both for your great analysis of this ruing and the possible implications it might have in the future on conditional certification motions. We will be providing the new edition of the Duane Morris Class Action Review in early January, which will have statistics on how conditional certification is shaping up for 2024. Greg and Derek, thanks for being here today, and thank you so much to our listeners for tuning in.<\/p>\n<p><strong>Greg:<\/strong> Thanks Jen and thank you listeners.<\/p>\n<p><strong>Derek:<\/strong> Happy to be here and thanks everyone.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Duane Morris Takeaway: This week&#8217;s episode of the Class Action Weekly Wire features Duane Morris partner Jennifer Riley and associates Greg Tsonis and Derek Franklin with their analysis of a Wisconsin federal court decision weighing in on the two-step process for issuing notice of a Fair Labor Standards Act (\u201cFLSA\u201d) collective action, illustrating a gaining &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/blogs.duanemorris.com\/classactiondefense\/2024\/09\/12\/the-class-action-weekly-wire-episode-73-wisconsin-federal-court-blazes-a-new-path-on-flsa-conditional-certification-process\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;The Class Action Weekly Wire \u2013 Episode 73: Wisconsin Federal Court Blazes A New Path On FLSA Conditional Certification Process&#8221;<\/span><\/a><\/p>\n","protected":false},"author":583,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[90],"tags":[],"ppma_author":[30],"class_list":["post-1735","post","type-post","status-publish","format-standard","hentry","category-class-action-weekly-wire"],"authors":[{"term_id":30,"user_id":583,"is_guest":0,"slug":"classactiondefense","display_name":"Class Action Defense","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2020\/10\/dmlogo.jpg","author_category":"","last_name":"Defense","first_name":"Class Action","job_title":"","user_url":"","description":""}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/1735","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/users\/583"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/comments?post=1735"}],"version-history":[{"count":0,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/1735\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/media?parent=1735"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/categories?post=1735"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/tags?post=1735"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/ppma_author?post=1735"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}