Court Opinion

ID: 4650812
Source: CourtListenerOpinion
Date Created: 2021-01-12 19:00:21.289306+00
Date Added: 2024-06-11T08:45:51.388350
License: Public Domain

Case: 19-60847    Document: 00515703469        Page: 1    Date Filed: 01/12/2021

           United States Court of Appeals
                for the Fifth Circuit
                                                                    United States Court of Appeals
                                                                             Fifth Circuit

                                                                           FILED
                                                                     January 12, 2021
                                No. 19-60847                          Lyle W. Cayce
                                                                           Clerk

   Harry Swales; Corey Lilly; Kyle Shettles; and John
   McGee, on behalf of themselves and all others similarly situated,

                                                         Plaintiffs—Appellees,

                                    versus

   KLLM Transport Services, L.L.C.,

                                                     Defendant—Appellant,
   _____________________________

   Marcus Brent Jowers, and others similarly situated,

                                                          Plaintiff—Appellee,

                                    versus

   KLLM Transport Services, L.L.C.,

                                                     Defendant—Appellant.

                 Appeal from the United States District Court
                   for the Southern District of Mississippi
                           USDC No. 3:17-CV-490

   Before Jolly, Jones, and Willett, Circuit Judges.
Case: 19-60847         Document: 00515703469            Page: 2    Date Filed: 01/12/2021

                                         No. 19-60847

   Don R. Willett, Circuit Judge:
          Group litigation takes various forms, with varying formality.
   Traditional class actions under Federal Rule of Civil Procedure 23, for
   example, proceed under well-established procedural safeguards to ensure
   that the named plaintiffs are appropriate class representatives. 1 But so-called
   “collective actions” under the Fair Labor Standards Act proceed, well,
   differently, with district courts applying ad hoc tests of assorted rigor in
   assessing whether potential members are “similarly situated”—a phrase that
   § 216(b) of the FLSA leaves undefined. 2 The precision of Rule 23 provides
   useful guidance for when and how to certify a class; the imprecision of
   § 216(b), not so much. This interlocutory appeal concerns the threshold
   dispute of any wage-claim collective: How rigorously, and how promptly,
   should a district court probe whether potential members are “similarly
   situated” and thus entitled to court-approved notice of a pending collective
   action? Our circuit has neither adopted nor rejected a definitive legal
   standard. Today we do both, hopefully providing a workable, gatekeeping
   framework for assessing, at the outset of litigation, before notice is sent to
   potential opt-ins, whether putative plaintiffs are similarly situated—not
   abstractly but actually.
                                     *        *         *
          In this minimum-wage dispute, Plaintiffs claim that KLLM
   Transport Services misclassified them, and all other truck drivers, as
   independent contractors. They allege that KLLM controls their work to
   such an extent that they are, in fact, employees entitled to the minimum
   wage. Plaintiffs want to pursue their wage claims as a collective action, which

          1
              Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 349 (2011) (“The Rule’s four
   requirements—numerosity, commonality, typicality, and adequate representation—
   effectively limit the class claims to those fairly encompassed by the named plaintiff’s
   claims.”) (internal quotation marks omitted).
          2
              29 U.S.C. § 216(b).

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   the FLSA allows for those “similarly situated,” 3 the only two words in the
   FLSA that imply a standard. As is common practice, Plaintiffs moved for
   “conditional certification” of their proposed collective. Such certification
   results in “the sending of court-approved written notice to employees who
   in turn become parties to a collective action only by filing written consent
   with the court.” 4
          The district court granted Plaintiffs’ certification request, applying
   the widely used Lusardi test, a two-step method for certifying a collective.
   The court, however, conceded uncertainty given Lusardi’s variable forms
   and our circuit’s relative silence on the legal standard for collective-action
   certification.
          On appeal, the parties ask us to delineate—within Lusardi—the
   district court’s notice-sending discretion. We decline, as Lusardi has no
   anchor in the FLSA’s text or in Supreme Court precedent interpreting it.
   Indeed, the word “certification,” much less “conditional certification,”
   appears nowhere in the FLSA. We therefore reject Lusardi’s two-step
   certification rubric.
          Instead, we embrace interpretive first principles: (1) the FLSA’s text,
   specifically § 216(b), which declares (but does not define) that only those
   “similarly situated” may proceed as a collective; and (2) the Supreme
   Court’s admonition that while a district court may “facilitat[e] notice to
   potential plaintiffs” for case-management purposes, it cannot signal approval
   of the merits or otherwise stir up litigation. 5 These are the only binding

          3
              Id.
          4
              Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036, 1043 (2016) (cleaned up).
          5
            Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 169 (1989); In re JPMorgan
   Chase & Co., 916 F.3d 494, 500–02 (5th Cir. 2019).

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   commands on district courts. But they are unequivocal. And they have
   significant implications. In our view, 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.”
   Only then can the district court determine whether the requested opt-in
   notice will go to those who are actually similar to the named plaintiffs. These
   bedrock rules, not Lusardi, define and delimit the district court’s discretion.
          Because we are articulating these standards for the first time, we
   vacate the district court’s grant of conditional certification and remand for
   further proceedings consistent with this opinion.
                                                I
          Before explaining why we reject Lusardi, we must explain how Lusardi
   came about. We first recount the legal history of FLSA collective actions and
   the widespread confusion regarding whether, when, and to whom to send
   court-approved notice of a putative FLSA collective. We then explain how
   the district court navigated its way through these muddy waters.
                                                A
          The FLSA protects employees (not independent contractors) by
   establishing a minimum hourly wage, maximum work hours, and overtime
   compensation for work beyond 40 hours per week. 6 Section 216(b) of the
   FLSA is a catch-all provision titled “Damages; right of action; attorney’s
   fees and costs; termination of right of action.” The middle of the provision
   states that employees may proceed collectively when they are “similarly

          6
              29 U.S.C. §§ 206(a)(1), 207(a).

                                                4
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                                               No. 19-60847

   situated.” 7 That’s it. The statute doesn’t define “similarly situated.” And
   critical to this case, it says nothing about “certification” or “notice.”
          Congress amended the FLSA’s collective-action procedure through
   the 1947 Portal-to-Portal Act, requiring similarly situated employees to opt-
   in via written consent. 8 Section 216(b)’s opt-in mechanism differs from Rule
   23 class actions, where members are bound by the judgment or settlement
   unless they affirmatively opt out. 9 As the Supreme Court explained, this opt-
   in requirement was a response “to excessive litigation spawned by plaintiffs
   lacking a personal interest in the outcome” of FLSA cases. 10 Thus, “the
   representative action by plaintiffs not themselves possessing claims was
   abolished, and the requirement that an employee file a written consent was
   added.” 11
          The Portal-to-Portal Act takes into account the dual goals of collective
   actions: (1) enforcement (by preventing violations and letting employees pool
   resources when seeking relief); and (2) efficiency (by resolving common
   issues in a single action). 12 But collective actions also pose dangers: (1) the
   opportunity for abuse (by intensifying settlement pressure no matter how
   meritorious the action); and (2) the appearance of court-endorsed
   solicitation of claims (by letting benign notice-giving for case-management

          7
              29 U.S.C. § 216(b).
          8
               Hoffmann-La Roche, 493 U.S. at 173.
          9
               Id. at 177 (Scalia, J., dissenting).
          10
               Id. at 173.
          11
               Id.
          12
               Bigger v. Facebook, 947 F.3d 1043, 1049 (7th Cir. 2020).

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   purposes warp into endorsing the action’s merits, or seeming to, thus stirring
   up unwarranted litigation). 13
           The trial court’s notice-giving role is pivotal to advancing the goals
   and evading the dangers of collective actions. An employee cannot benefit
   from a collective action without “accurate and timely notice,” as the
   Supreme Court put it in Hoffman-La Roche, Inc. v. Sperling. 14 The Court
   never mentioned any “certification” process, but stated that district courts
   may oversee the notice and opt-in process. And since written consent is
   required by statute, a court’s notice-sending authority is “inevitable” in
   cases involving numerous potential plaintiffs. 15 “Permitting the court to
   facilitate notice helps ensure” efficient resolution of common issues. 16
   Further, a trial court can better manage a collective action “if it ascertains
   the contours of the action at the outset,” and “[b]oth the parties and the
   court benefit from settling disputes about the content of the notice before it
   is distributed.” 17
           To be sure, Hoffman-La Roche “nowhere suggests that employees
   have a right to receive notice of potential FLSA claims.” 18 It’s discretionary
   with the district court. The Court cautioned, however, that trial courts do
   not possess “unbridled discretion” in overseeing collective actions and

           13
                Id.
           14
                493 U.S. at 170.
           15
             Id. at 171. Hoffman-La Roche involved the Age Discrimination in Employment
   Act, which contains a provision identical to § 216(b) of the FLSA. Courts, including this
   one, have consistently applied Hoffman-La Roche to FLSA cases. See, e.g., In re JPMorgan,
   916 F.3d at 500.
           16
                In re JPMorgan, 916 F.3d at 500 (citing Hoffmann-La Roche, 493 U.S. at 170).
           17
                Hoffman La-Roche, 493 U.S. at 172.
           18
                In re JPMorgan, 916 F.3d at 501.

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   sending notice to potential opt-in plaintiffs. 19 Given the real risk of abuse of
   the collective-action device, a court’s “intervention in the notice process”
   cannot devolve into “the solicitation of claims.” 20 In overseeing the process,
   the district court “must be scrupulous to respect judicial neutrality. To that
   end, district courts must take care to avoid even the appearance of judicial
   endorsement of the merits of the action.” 21 No judicial thumbs (or anvils) on
   the scale. In sum, the Court held that a district court must oversee the notice
   process agnostically. But it didn’t prescribe how district courts should do
   that: “We confirm the existence of the trial court’s discretion, not the details
   of its exercise.” 22
           The Court has provided no further guidance regarding the notice-
   giving process. Nor is there much federal appellate precedent across the
   country. 23 Indeed, FLSA collective actions rarely (if ever) reach the courts
   of appeals at the notice stage because “conditional certification” is not a final
   judgment. 24 Plus, the leniency of the stage-one standard, while not so
   toothless as to render conditional certification automatic, exerts formidable
   settlement pressure.
                                                  B
           Without “statutory or case law guidance, the district courts, both
   within this circuit and without, have arrived at a loose consensus as to the

           19
                Hoffman La-Roche, 493 U.S. at 174.
           20
                Id.
           21
                Id.
           22
                Id. at 170
           23
                See Campbell v. City of Los Angeles, 903 F.3d 1090, 1111 (9th Cir. 2018).
           24
             In this case, the district court certified its certification decision for interlocutory
   appeal, and we agreed to decide it. 28 U.S.C. § 1292(b).

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                                             No. 19-60847

   proper procedure” for certifying collective actions. 25 With some variations,
   district courts generally look to one of two general approaches.
          The first approach, “the near-universal practice” 26 of the district
   courts, comes from the 1987 New Jersey district court opinion in Lusardi v.
   Xerox Corporation. 27 Lusardi laid out a two-step process to determine, “on an
   ad hoc case-by-case basis,” whether prospective opt-in plaintiffs in a
   proposed collective are “similarly situated” enough to satisfy the FLSA. 28
          Step one involves “an initial ‘notice stage’ determination” that
   proposed members of a collective are similar enough to receive notice of the
   pending action. 29 This initial step is referred to as “conditional certification”
   of a putative class.30 District courts typically base their decisions at the first
   step “on the pleadings and affidavits of the parties.” 31 And they may require
   little more than “substantial allegations that the putative [collective]
   members were together the victims of a single decision, policy, or plan.” 32
   Step two occurs at “the conclusion of discovery (often prompted by a motion
   to decertify).” 33 Because it has the benefit of full discovery, the court makes
   a second and final “determination, utilizing a stricter standard,” about
   whether the named plaintiffs and opt-ins are “similarly situated” and may

          25
               Campbell, 903 F.3d at 1108–09.
          26
               Id. at 1100.
          27
               118 F.R.D. 351 (D.N.J. 1987).
          28
               Thiessen v. Gen. Elec. Capital Corp., 267 F.3d 1095, 1102 (10th Cir. 2001).
          29
               Id.
          30
               In re JPMorgan, 916 F.3d at 500–01.
          31
               Id. at 501.
          32
               Thiessen, 267 F.3d at 1102.
          33
               Id. at 1102–03.

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   therefore proceed to trial as a collective. 34 If the court finds that the opt-ins
   are not sufficiently similar to the named plaintiffs, it “must dismiss the opt-
   in employees, leaving only the named plaintiff’s original claims.” 35 Factors
   considered at this second step include: “(1) [the] disparate factual and
   employment settings of the individual plaintiffs; (2) the various defenses
   available to [the] defendant which appear to be individual to each plaintiff;
   [and] (3) fairness and procedural considerations.” 36
           The second approach, which only a few courts apply, comes from the
   1990 Colorado district court opinion in Shushan v. University of Colorado. 37 In
   Shushan, the court held that for conditional certification, plaintiffs “must
   satisfy all of the requirements of [R]ule 23, insofar as those requirements are
   consistent with [] § 216(b).” 38 The court acknowledged the difference
   between § 216(b)’s opt-in feature and Rule 23’s opt-out feature, but it
   concluded “that Congress intended [§ 216’s] ‘similarly situated’ inquiry to
   be coextensive with Rule 23 class certification.” 39 That means courts
   applying this test consider “numerosity,” “commonality,” “typicality,”

           34
                Id.
           35
                Sandoz v. Cingular Wireless LLC, 553 F.3d 913, 915 n.2 (5th Cir. 2008).
           36
                Thiessen, 267 F.3d at 1103.
           37
              132 F.R.D. 263 (D. Colo. 1990). A third “certification” test comes from Bayles
   v. American Medical Response of Colorado, Inc., 950 F. Supp. 1053, 1063 (D. Colo. 1996). In
   Bayles, however, the court was deciding whether to “decertify” the collective after
   discovery was complete. The question here—whether and when to send out notice—is
   different.
           38
                Id. at 265 (emphasis omitted).
           39
                Mooney v. Aramco Servs. Co., 54 F.3d 1207, 1214 (5th Cir. 1995) (describing
   Shushan).

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                                           No. 19-60847

   and “adequacy of representation” to determine whether to certify a
   collective action. 40
          Our sister circuits have pointed out perceived flaws in both
   approaches. 41 As for Lusardi, it is an abstract and ad-hoc “balancing test with
   no fulcrum.” 42 As for Shushan, it “rests improperly on an analogy to Rule
   23 lacking in support in [] the FLSA.” 43 While no circuit court has formally
   adopted Shusan, some have endorsed Lusardi. 44
          We now turn to the history of this case and the approach the district
   court took.
                                                 C
          KLLM transports refrigerated goods throughout the country, using
   either company-owned trucks operated by its employee–drivers or trucks
   provided by other drivers classified as independent contractors. Independent
   contractors can also lease their trucks directly from KLLM.
          Between 2015–2017, Plaintiffs Harry Swales, Corey Lilly, Kyle
   Shettles, John McGee, and Marcus Jowers drove trucks under an
   Independent Contractor Agreement for KLLM. Without any notice going
   out, six additional drivers have already opted into the lawsuit.
          Plaintiffs argue that KLLM misclassified them—and other “similarly
   situated” drivers—as independent contractors rather than as employees. So
   they sued for violation of the FLSA’s minimum-wage requirement. The

          40
               Id.
          41
               See Campbell, 903 at 1111–1116 (collecting cases).
          42
               Id. at 1114.
          43
               Id. at 1111.
          44
               Id. at 1111, 1114.

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   district court authorized discovery “limited to the issue of § 216(b)
   certification” to determine whether to conditionally certify a collective and
   facilitate notice to potential members. After the discovery deadline expired,
   Plaintiffs moved for conditional certification, which KLLM opposed.
          The district court observed, correctly, that “[f]ew areas of the law are
   less settled than the test for determining whether a collective action should
   be certified under § 216(b).” The court then applied its own version of
   Lusardi.
          Because the parties had already engaged in substantial, although not
   complete, discovery on whether Plaintiffs and potential opt-ins were
   similarly situated, KLLM urged the district court to apply the stricter
   standard usually reserved for the second step of Lusardi, once discovery is
   complete. At that step, the district court makes “a final determination of
   whether all plaintiffs are sufficiently similarly situated to proceed together in
   a single action,” either greenlighting the action or instead “decertifying” it
   and allowing only the named plaintiffs to proceed. 45
          Recognizing the significant discovery that had already taken place, the
   district court applied a Goldilocks version of Lusardi, something in between
   lenient and strict. It decided that Plaintiffs and Opt-ins needed to show
   “more than minimal evidence” of their similarities to justify conditional
   certification. The court noted that Plaintiffs and Opt-ins all drove trucks for
   KLLM          under       an    independent-contractor           agreement,           received
   compensation based on the number of miles they drove, and leased their
   trucks from KLLM. The court also acknowledged the differences, including
   different per-mile compensation rates and hours worked. The court
   concluded that despite these differences, “the claims and defenses largely

          45
               Reyna v. Int’l Bank of Commerce, 839 F.3d 373, 375 n.2 (5th Cir. 2016).

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   turn on the same questions, like whether the drivers were misclassified as
   independent contractors,” a decision determined by the “economic-realities
   test.”
            KLLM pointed to evidence showing that the application of the
   economic-realities test to Plaintiffs and Opt-ins would require a highly
   individualized inquiry. This evidence, according to KLLM, counseled
   against certification (conditional or otherwise) of the collective. The district
   court believed it could not consider anything related to the economic-realities
   test at the pre-notice stage because the test was a “merits issue” to be dealt
   with after discovery was complete. But the court acknowledged that
   “KLLM may ultimately have a point” that, because each plaintiff would
   have to present different facts under the economic-realities test, they might
   not be “similarly situated.”
            The district court granted Plaintiffs’ motion, conditionally certifying
   a collective of potentially thousands of KLLM truck drivers. The putative
   collective was limited to those who worked for KLLM “within three years
   of the date” the order was entered and excluded those who signed an
   arbitration agreement.
            At the end of its opinion, the district court sua sponte certified its
   certification decision for interlocutory appeal under 28 U.S.C. § 1292(b) and
   stayed the case. Explaining why, the court stated that the certification and
   notice processes were “controlling questions of law as to which there is
   substantial ground for difference of opinion . . . . [T]here are open questions
   regarding the applicable standards [of conditional certification], especially
   when some discovery has occurred.” KLLM then filed a petition for appeal
   by permission, which we granted.

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                                                  II
          We review de novo the question of law at issue—the legal standard
   that district courts should use when deciding whether to send notice in an
   FLSA collective action. 46 And once the correct legal standard is ascertained,
   we review the district court’s decision for abuse of discretion. 47
                                                 III
          The parties assume that Lusardi (or some version of it) applies but
   dispute whether the district court abused its discretion in refusing to consider
   “decertification” evidence at step one. Plaintiffs even argue that we have
   “affirmed use of the Lusardi two-step method for FLSA collective actions.”
   This is mistaken. We have “carefully avoided adopting” Lusardi, and our
   avoidance should not be misconstrued as acquiescence. 48 And now that the
   question is squarely presented, we reject Lusardi.
          While at least one of our sister circuits, the Eleventh Circuit, has
   endorsed Lusardi, it did so only after a jury verdict. 49 And the question before
   the Eleventh Circuit was whether the district court abused its discretion in
   denying the employer’s motion to decertify the collective action. 50 The court
   therefore did not address Lusardi in the notice-giving context. Even so, the
   court only stated that Lusardi’s two-step method “appears to be an effective
   tool,” but district courts aren’t required to use it. 51 The Ninth Circuit has, in

          46
               Mooney, 54 F.3d at 1213.
          47
               Steele v. Leasing Enters., Ltd., 826 F.3d 237, 248 (5th Cir. 2016).
          48
               See In re JPMorgan, 916 F.3d at 500 n.9.
          49
               Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233 (11th Cir. 2008).
          50
               Id.
          51
              Hipp v. Liberty Nat. Life Ins. Co., 252 F.3d 1208, 1219 (11th Cir. 2001)
   (considering the ADEA’s identical § 216(b) provision).

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   reviewing a district court’s dismissal of a collective action, rejected Lusardi
   because it “improperly sanctions the decertification of collective actions the
   district court finds procedurally challenging.” 52
          While we agree with the Ninth Circuit that Lusardi should be rejected,
   we disagree as to the reasons why. The real issues Lusardi creates occur not
   at decertification, but from the beginning of the case.
          As this case demonstrates, Lusardi frustrates, rather than facilitates,
   the notice process. The first problem is that the Lusardi test comes in many
   varieties. The district court conceded confusion precisely because courts
   “have taken different approaches” to Lusardi when some discovery has
   occurred. The use of “Lusardi” or even collective-action “certification” has
   no universally understood meaning. Thus, the amorphous and ad-hoc test
   provides little help in guiding district courts in their notice-sending authority.
          Second, Lusardi distracts from the FLSA’s text. The FLSA, and
   § 216(b) in particular, says nothing about “conditional certification” or any
   of the requirements of Rule 23. We thus cannot read the statute as supporting
   any of the certification tests that district courts have created to determine
   whether a group of employees should receive notice about a collective action.
   And there is no Supreme Court case stating otherwise.
          In fact, the Court has only addressed “conditional certification”
   twice, and both times it did so indirectly. In Genesis Healthcare Corporation v.
   Symczyk, the Court addressed a mootness issue in an FLSA case. 53 The
   respondent invoked cases about class certification under Rule 23, and the
   Court said that “conditional certification” differed from class certification

          52
               Campbell, 903 F.3d at 1117.
          53
               569 U.S. 66 (2013).

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   because the former “does not produce a class with an independent legal
   status or join additional parties to the action.” 54 Unlike Rule 23 class
   certification, “[t]he sole consequence of conditional certification is the
   sending of court-approved written notice to employees, who in turn become
   parties to a collective action only by filing written consent with the court.” 55
   The    Court         concluded      that     “[w]hatever      significance   ‘conditional
   certification’ may have in § 216(b) proceedings, it is not tantamount to class
   certification under Rule 23.” 56 And in Tyson Foods, Incorporated v.
   Bouaphakeo, the Court only referred to conditional certification when it
   quoted Symczyk’s language that “conditional certification” just means
   sending notice. 57
          Two-stage certification of § 216(b) collective actions may be common
   practice. But practice is not necessarily precedent. And nothing in the
   FLSA, nor in Supreme Court precedent interpreting it, requires or
   recommends (or even authorizes) any “certification” process. The law
   instead says that the district court’s job is ensuring that notice goes out to
   those who are “similarly situated,” in a way that scrupulously avoids
   endorsing the merits of the case. A district court abuses its discretion, then,
   when the semantics of “certification” trump the substance of “similarly
   situated.” District courts have impermissibly zeroed in on “certification”
   standards this way in the past, as explained in our recent decision in In re
   JPMorgan Chase & Company.

          54
               Id. at 75.
          55
               Id. (internal citations omitted).
          56
               Id. at 78.
          57
               136 S. Ct. 1036, 1043 (2016).

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          In JP Morgan, we held that it was beyond the district court’s
   discretion to order notice to employees who had signed arbitration
   agreements and were thus not potential participants of the FLSA collective
   action. 58 We noted that some district courts waited until the second step of
   Lusardi, after discovery was complete, to determine the applicability of
   arbitration agreements. 59 “Because Hoffmann-La Roche strictly forbids
   district courts from appearing to endorse the merits of the litigation by means
   of facilitating notice, those district courts conclude that the existence of
   arbitration agreements—as a merits-based issue—must not be addressed
   until the decertification stage.” 60 We held that it was improper to refuse to
   consider evidence about arbitration agreements before sending notice
   because notice can only go to “potential participants.” 61 “And alerting those
   who cannot ultimately participate in the collective ‘merely stirs up litigation,’
   which is what Hoffmann-La Roche flatly proscribes.” 62 We thus concluded
   that when there is a genuine dispute about an arbitration agreement, the
   district court “should permit submission of additional evidence, carefully
   limited to the disputed facts” before notice is sent. 63
          The district court here, like the one in JPMorgan, felt that it could not
   reach “merits” issues until Lusardi’s step two—after notice is sent out and
   discovery is complete. The court had authorized preliminary discovery on
   “certification” issues. There were eleven depositions, over 19,000

          58
               916 F.3d at 504.
          59
               Id. at 501.
          60
               Id.
          61
               Id. at 502.
          62
               Id.
          63
               Id. at 503.

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   documents produced, and even expert evidence. But the court (in the
   footsteps of many others) felt bound by the “conditional certification” step
   of Lusardi to disregard some of this evidence, particularly the evidence that
   went to the differences between Plaintiffs and Opt-ins. The court found that
   it could not consider any of this evidence of dissimilarity “at the pre-notice
   stage” because it went to the merits of the case.
          But the merits issue here—whether Plaintiffs were misclassified as
   independent contractors—resembles the issue of arbitration agreements in
   JPMorgan. Both are potentially dispositive, threshold matters. Just as the
   existence of a valid arbitration agreement bars an employee from bringing a
   lawsuit in general, a valid independent-contractor classification bars
   application of the FLSA. The fact that a threshold question is intertwined
   with a merits question does not itself justify deferring those questions until
   after notice is sent out. Just as we held it was improper to ignore evidence of
   the arbitration agreements in JPMorgan, it’s improper to ignore evidence of
   other threshold matters, like whether the plaintiffs are “employees” such
   that they can bring an FLSA claim.
          We thus reject Lusardi because on the one hand, its flexibility has led
   to unpredictability. And on the other hand, its rigidity distracts district courts
   from the ultimate issues before it. Next, we’ll discuss what this means, on a
   practical level, for this case.
                                          IV
          Instead of adherence to Lusardi, or any test for “conditional
   certification,” 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. The amount of discovery necessary to
   make that determination will vary case by case, but the initial determination

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   must be made, and as early as possible. In other words, the district court, not
   the standards from Lusardi, should dictate the amount of discovery needed
   to determine if and when to send notice to potential opt-in plaintiffs.
          For example, in a donning and doffing case, notice might be justified
   when the pleadings and only preliminary discovery show sufficient similarity
   between the plaintiffs’ employment situations. In those types of cases, the
   plaintiffs all have the same job description, and the allegations revolve around
   the same aspect of that job. So, a district court will not likely need mountains
   of discovery to decide whether notice is appropriate. In another case, such as
   this one, where Plaintiffs have demonstrably different work experiences, the
   district court will necessarily need more discovery to determine whether
   notice is going out to those “similarly situated.”
          Considering, early in the case, whether merits questions can be
   answered collectively has nothing to do with endorsing the merits. Rather,
   addressing these issues from the outset aids the district court in deciding
   whether notice is necessary. And it ensures that any notice sent is proper in
   scope—that is, sent only to potential plaintiffs. When a district court ignores
   that it can decide merits issues when considering the scope of a collective, it
   ignores the “similarly situated” analysis and is likely to send notice to
   employees who are not potential plaintiffs. In that circumstance, the district
   court risks crossing the line from using notice as a case-management tool to
   using notice as a claims-solicitation tool. Hoffman-La Roche flatly forbids such
   line crossing.
          In this case, applying Lusardi was inappropriate because the threshold
   issue here depends on the economic-realities test, which asks how much

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   control the employer had over the independent contractor. 64 Thus, the
   district court needed to consider the evidence relating to this threshold
   question in order to determine whether the economic-realities test could be
   applied on a collective basis. If answering this question requires a highly
   individualized inquiry into each potential opt-in’s circumstances, the
   collective action would quickly devolve into a cacophony of individual
   actions. As KLLM points out, the individualized nature of the economics-
   realities test is why misclassification cases rarely make it to trial on a
   collective basis.
            To determine, then, whether and to whom notice should be issued in
   this case, the district court needs to consider all of the available evidence. For
   example, KLLM pointed to numerous variations among the Plaintiffs and
   Opt-ins who joined before any notice, including the length of their contracts
   with KLLM, which ranged from one month to four years. KLLM also noted
   that the Plaintiffs and Opt-ins provided inconsistent discovery responses
   about the control they had over their profitability—some drivers decided to
   work only for specific customers or in certain regions, at least one Plaintiff
   hired an employee to drive for him, and the drivers disagreed as to whether
   they had to stop for fuel at KLLM’s recommended fuel stops or have their
   trucks serviced by KLLM rather than third parties.
            Regarding the potential opt-ins to whom the district court authorized
   notice, the differences were even starker. Over 400 drivers with
   independent-contractor agreements hired their own employees to help
   operate the equipment. KLLM offered 41 different compensation
   arrangements that the drivers could choose from. And drivers had different

            64
                 Herman v. Express Sixty-Minutes Delivery Serv., Inc., 161 F.3d 299, 303 (5th Cir.
   1998).

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   options for leasing their trucks—they could do so from KLLM or lease or buy
   a truck from a third party. The district court need not, and should not,
   disregard this evidence. These facts affect whether all of KLLM’s
   independent contractors can be grouped together for purposes of (later)
   determining the level of control KLLM exercised over their work. The same
   facts will also be relevant when (later) deciding the ultimate merits issue. And
   that’s okay. In other words, the same evidence will often serve two purposes,
   and the district court need not ignore that evidence to avoid using it for the
   wrong purpose.
           After considering all available evidence, the district court may
   conclude that the Plaintiffs and Opt-ins are too diverse a group to be
   “similarly situated” for purposes of answering whether they are in fact
   employees, or at least that Plaintiffs have not met their burden of establishing
   similarity. 65 If that is the case, it may decide the case cannot proceed on a
   collective basis. The district court may instead decide that it needs further
   discovery to make this determination. Or it may find that only certain
   subcategories of drivers, depending on their economic dependence on
   KLLM, should receive notice.
           The bottom line is that the district court has broad, litigation-
   management discretion here. To be sure, that discretion is cabined by the
   FLSA’s “similarly situated” requirement and the Supreme Court’s
   decision in Hoffman La-Roche. But it is not captive to Lusardi or any
   “certification” test. It’s unnecessary for district courts, owing to inertia or

           65
               While the text of §216(b) is not explicit on this point, we hold that such a burden
   follows from the general burden that a plaintiff bears to prove her case. This makes sense
   as a practical matter as well, as a plaintiff should not be able to simply dump information on
   the district court and expect the court to sift through it and make a determination as to
   similarity.

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   path-dependence, to continue to invoke and then stretch Lusardi beyond
   recognition (or reason) to fit the case before it.
                                           V
          This case poses an issue that has been under-studied but whose
   importance cannot be overstated: how stringently, and how soon, district
   courts should enforce § 216(b)’s “similarly situated” mandate. As explained
   above, the FLSA’s similarity requirement is something that district courts
   should rigorously enforce at the outset of the litigation. Since we are
   announcing this framework, and our rejection of Lusardi, for the first time,
   we VACATE the district court’s order granting Plaintiffs’ motion for
   conditional certification and REMAND for further proceedings consistent
   with this opinion.

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