Good news for at least some employers facing Fair Labor Standards Act (FLSA) collective actions. In Clark v. A&L Home Care and Training Center et al., the 6th Circuit adopted a new standard for collective action conditional certification that, if it becomes the prevailing standard, restores sanity and logic to the conditional certification process.

Here is what you need to know.

The FLSA permits individuals to assert claims on behalf of themselves and others “similarly situated.” To bring this sort of a collective action, a plaintiff must give notice to “similarly situated” current or former employees and obtain their consent to pursue litigation on their behalf. This begs the question of who is to receive that notice and, later, who is to be included in the final certified class.

Traditionally, courts have applied a two-step process. In step one - a.k.a. “conditional certification” - the court permits a notice to go out to any employees the plaintiff has made a “modest factual showing . . . are similarly situated.” Id.  If the case does not settle, after discovery is completed the court conducts a more in-depth inquiry into whether those added employees are actually similarly situated. This step is known as “final certification.” In reality, no matter what the evidence shows, it is difficult to unring the conditional certification bell, and the final certified class is often identical to the conditionally certified class.

In Clark, the 6th Circuit held this “lenient standard” requiring only a “modest showing” at the conditional certification stage is unsupported by law. Instead, at least within the 6th Circuit, before a court can compel notice to go to any “other employees, the plaintiffs must show a strong likelihood that those employees are similarly situated to the plaintiffs themselves.” (Emphasis added.) Historically, the number of potential plaintiffs to receive notice is often outcome-determinative. More notice recipients means more plaintiffs, often increasing plaintiffs’ ranks “a hundredfold.” At that juncture, the pressure to settle skyrockets.

Simply put, this ruling is a victory for any employers who, under the old approach, might be strong-armed into a resolution not otherwise warranted under the law.

Collective actions are some of the most onerous cases to defend against, primarily due to the cost of litigation and the very real threat to employers of attorney fee shifting. Crafting an effective litigation strategy early on is key to mitigating potential exposure. Employers facing potential collective action claims should work with experienced employment counsel, including those ready to argue that the 6th Circuit’s standard in Clark should apply nationwide, to better understand and prepare for the long road ahead.