18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 129 whether Plaintiff would ultimately prevail in proving an FLSA violation, but whether the Court could make the determination of whether the drivers were employees or independent contractors on a collective-wide basis. The Court opined that based on the current record, Plaintiff had provided sufficient evidence showing the relevant threshold issues could be determined on a collective-wide basis. Plaintiff submitted deposition testimony that the drivers in the METROLift program all had the same job title, performed the same duties, were paid under the same compensation arrangements, wore the same uniforms, followed the same policies and procedures, were subject to the same hiring requirements, completed the same training, were supervised in the same way, were subject to the same level of control, and were required to follow identical METROLift contracts. Id . at *7. The Court ruled that Plaintiff demonstrated that all collective action members’ claims centered on the same facts and evidence as to whether the drivers were employees or independent contractors. For these reasons, the Court granted Plaintiff’s motion for conditional certification of a collective action. Swales, et al. v. KLLM Transport Services, LLC, 2021 U.S. App. LEXIS 827 (5th Cir. Jan. 12, 2021). Plaintiffs, a group of truck drivers, filed a collective action alleging that Defendant misclassified them as independent contractors, thereby denying Plaintiffs the right to minimum wages in violation of the Fair Labor Standards Act (“FLSA”). Plaintiffs moved for conditional certification of a collective action, and the District Court granted the motion. In granting Plaintiffs’ motion, the District Court used the two-step certification test from Lusardi v. Xerox Corporation , 118 F.R.D. 351 (D.N.J. 1987), which involved: (i) first, a “conditional certification” determination as to whether the members of the putative collective action were similar enough to receive notice; and (2) second, a “final” certification determination that was typically prompted by a motion to decertify after the conclusion of discovery. Id. at *9-10. On Defendant’s appeal, the Fifth Circuit vacated the District Court’s order. It held that “a District Court must rigorously scrutinize the realm of ‘similarly-situated’ workers, and must do so from the outset of the case, not after a lenient, step-one ‘conditional certification.’” Id. at *4. The Fifth Circuit rejected the Lusardi test on the basis that it frustrates the notice process and ignores key issues at the certification stage. Specifically, the Fifth Circuit reasoned that the Lusardi test was unsupported by the text of the FLSA – which includes no language concerning “conditional certification” – and postpones addressing potential merits questions until after notice is sent out. According to the Fifth Circuit, this process ignored evidence of threshold matters while also leading to unpredictable outcomes in light of the test’s broad flexibility. Rather than using the Lusardi test, the Fifth Circuit held that “a District Court should identify, at the outset of the case, what facts and legal considerations will be material to determining whether a group of ‘employees’ is ‘similarly- situated.’ And then it should authorize preliminary discovery accordingly.” Id. at *21. With respect to this case, the Fifth Circuit remanded for the District Court to address Defendant’s evidence as to the alleged differences between certain Plaintiffs in the collective. This evidence included varying contract lengths, at least 41 different compensation arrangements, and differences as to whether Plaintiffs leased their trucks from Defendant or a third-party. Therefore, the Fifth Circuit vacated the District Court’s order granting certification and remanded for further proceedings consistent with its opinion. Editor ’ s Note: The Fifth Circuit’s ruling in Swales may well be the most significant FLSA ruling of 2021. It rejected the traditional approach of the majority of courts in analyzing motions for conditional certification. T.S., et al. v. Burke Foundation, 521 F. Supp. 3d 691 (W.D. Tex. 2021). Plaintiffs, a group of residents at Defendant’s Burke Center for Youth’s ("Burke") Pathfinders Ranch ("Pathfinder-RTC"), a residential treatment center for minor boys with "severe emotional or mental-health issues," alleged that they worked on various work assignments ("Work Projects") and were not paid wages for their work in violation of the FLSA. Id . at 694. Plaintiffs filed a motion for conditional certification of a collective action, which the Court granted. Plaintiffs asserted that they were directed by Pathfinder-RTC to complete Work Projects that included "cleaning buildings, weed-eating, moving rocks, clearing cedar, cleaning camp, cooking, helping in the kitchen and cafeteria, and moving office supplies,” and that they were not paid for Work Projects apart from being occasionally awarded "Burke Bucks," which "could only be used at the Pathfinders-RTC campus store." Id . at 696. Defendant did not dispute that residents engaged in Work Projects, but argued that proposed collective action members were not similarly-situated because not all residents participated in Work Projects that involved manual labor, and that residents participated in the Work Projects voluntarily. The Court ruled that whether or not residents engaged in physical or non-physical labor, Plaintiffs made a sufficient factual showing that the potential collective action members’ claims all centered on the same factual nexus and injury, i.e. , non-payment of wages for completion