September 5, 2025
Expert Analysis by Rebecca Ojserkis
After decades of standard practice, the U.S. Court of Appeals for the Fifth Circuit and the U.S. Court of Appeals for the Sixth Circuit each adopted their own new stricter standards to issue notice to collective action opt-in plaintiffs in Swales v. KLLM Transport Services LLC in 2021,[1] and in Clark v. A&L Home Care and Training Center LLC in 2023.[2]
Over the past four years, defendants in other circuits have pushed, without success, for the expansion of these more stringent procedures. As recently as July, the U.S. Court of Appeals for the Ninth Circuit rebuffed such efforts.[3]
But the U.S. Court of Appeals for the Seventh Circuit has now charted an altogether new ground. On Aug. 5, the court issued a ruling in Richards v. Eli Lilly & Co., in which it announced a new approach for district courts to determine whether to issue notice to opt-in plaintiffs.[4]
The contours of the test will only fully take shape as district courts in the Seventh Circuit tackle implementing this new standard.
Notice and Why It Matters
Legislation including the Fair Labor Standards Act, the Age Discrimination in Employment Act and the Equal Pay Act allow workers to litigate their claims together in collective actions.
Specifically, the statutes authorize plaintiffs to bring suit on behalf of “themselves and other employees similarly situated.”[5]
Less than 10 years after its passage, Congress amended the FLSA — in response to the proliferation of union‑initiated suits — to require each similarly situated worker to file a written consent to join the suit.[6]
The statute of limitations on the claims of each worker is not tolled until the court receives their personal consent.[7]
The need to affirmatively opt in distinguishes collective actions from class actions, where all but the named parties can remain absent. The intent of this approach was to create assurances that the workers wanted to be bound by any judgment.[8]
However, in order to submit a written acknowledgment that they want to be part of a representative action — and stop the clock on their claims expiring — workers must know about the action. That is where the question of notice comes in.
Existing Standards to Issue Notice
In 1989, the U.S. Supreme Court confirmed in Hoffmann-La Roche Inc. v. Sperling that trial courts must inevitably get involved in the notice process.[9] While encouraging early intervention, the high court reserved for district judges’ discretion the details of how they would exercise their role.[10]
Since then, the majority of district courts have followed a variation of the Lusardi two-step test, derived from the U.S. District Court for the District of New Jersey’s 1987 decision in Lusardi v. Xerox Corp.[11]
Under this approach, courts have issued notice to putative members of the collective early on in the litigation, after only a modest showing that they are similarly situated to the named plaintiffs.
In the past four years, however, the Fifth and Sixth Circuits have erected two new, but different, thresholds to issue notice. The Swales and Clark tests require substantial discovery, and thus time, to meet in order to show that workers are similarly situated by, respectively, a preponderance of the evidence or a strong likelihood.[12]
Earlier this summer in Harrington v. Cracker Barrel Old Country Store Inc., the Ninth Circuit refused to jump on either bandwagon and reiterated its commitment to its two-step precedent.[13]
In 2020, the Seventh Circuit punted on how and when courts should issue notice to opt-in plaintiffs in Bigger v. Facebook Inc.[14] But it has now weighed in.
The Seventh Circuit’s New Guidelines
The underlying suit that led to the Seventh Circuit’s new standard, Richards v. Eli Lilly & Co., involves Age Discrimination in Employment Act claims alleging that the pharmaceutical company overlooked employees who were over the age of 40 in its promotion practices.[15]
The Seventh Circuit accepted an interlocutory appeal from the U.S. District Court for the Southern District of Indiana and agreed to provide “clearer guidance” to lower courts on the necessary showing for court-issued notice.[16]
The circuit’s holding, intending to provide a “uniform, workable framework,” outlines a multipart decision tree.[17]
First, plaintiffs must present evidence that there is at least a dispute of material fact as to whether the named and opt-in plaintiffs are similarly situated, i.e., subject to a common policy or practice.[18]
Like Lusardi step one, evidence can come in the form of affidavits and counter‑affidavits.[19] Defendants may put forth rebuttal evidence to which the plaintiffs may then respond.[20]
After a fact dispute is identified, the district court can choose to issue notice, with a decision on certification to come after the completion of the opt-in process and discovery.[21]
Alternatively, the district court can authorize tailored discovery and still require a certification decision prior to notice.[22] Prenotice discovery could be limited to only part of the similarly situated analysis, or it could be more encompassing and overlap with merits issues.[23]
In short, unlike the existing three tests, the Richards standard presents district courts with flexible options on how to proceed.
In setting this new standard and rejecting the three existing ones, the Seventh Circuit invoked three principles that it drew from Hoffmann-La Roche.[24] They are the importance of timely and accurate notice, judicial neutrality, and the use of court discretion to prevent abuses and ensure efficient and proper joinder.[25]
The Implications of Richards
The Seventh Circuit stated that it set out to clarify how district courts should be “assessing the propriety of notice to a proposed collective.”[26] Yet its road map leaves many unanswered questions for district courts to grapple with.
For instance, take the open questions around prenotice discovery. The decision does not restrict the types of discovery authorized. Will document productions require e-discovery? Will depositions take place? If, for example, depositions of a corporate representative or a named plaintiff occur, and the questioning is tailored to the similarly situated topic, can these parties be deposed on other merits issues in a second sitting?[27]
Relatedly, the court does not specify how long the discovery and briefing on certification should take, except to discourage unnecessary delay.[28] What does this process of unknown length mean for workers’ running statute of limitations? The Seventh Circuit encourages, but does not require, equitable tolling during this period.[29]
In Clark, two judges on the Sixth Circuit panel gave a similar nudge to district courts,[30] which took the hint and now regularly equitably toll opt-in plaintiffs’ claims.[31] Will district courts in the Seventh Circuit take a similar tack?
Likewise, in Richards, the Seventh Circuit offered that a district court could dismiss a motion for notice without prejudice, subject to reconsideration with later acquired evidence.[32] Will courts embrace this invited flexibility?
Practically, it remains anyone’s guess how this new standard will play out. Will courts’ implementation of Richards operate more like the later notice of Swales and Clark, or will it bear more resemblance to Lusardi? Will employers still stipulate, as some did, to sending early notice? If so, will courts allow, and abide by, such agreement?
Finally, the panel did not speak in unison with respect to which party has the burden of moving for certification or what the burden of persuasion is.
The opinion was authored by U.S. Circuit Judge Thomas Kirsch and joined in full by U.S. Circuit Judge John Lee, who said in passing that they “presume that plaintiffs must establish their similarity at the certification stage by a preponderance of the evidence.”[33]
But in a separate concurrence, U.S. Circuit Judge David Hamilton criticized this discussion as substantively incorrect and beyond the scope of the question presented.[34] So, will district courts take the majority’s language as binding authority or merely influential dicta?
In the months and years to come, parties and district courts will wrestle with these and more questions about how to implement this notice standard in collective actions. But they should not anticipate further guidance from the Seventh Circuit, as it warned that it will not involve itself in a slew of interlocutory appeals to hash out every detail.[35]
The Supreme Court, however, may have more to say. Following the Ninth Circuit’s two-step embrace, Cracker Barrel has sought and received a stay of the Harrington decision while it petitions for writ of certiorari. The Seventh Circuit granted Eli Lilly’s motion seeking the same.[36]
Conclusion
Workers and employers should keep a close watch on whether this now four-way circuit split attracts the highest level of review.
In the meantime, workers and employers should embrace that the question of notice will be tailored to the nuanced facts of each case in the Seventh Circuit. Depending on what makes plaintiffs similarly situated from case to case, they may need to prepare for early discovery or an early opt-in process.
One-size-fits-all is no longer the norm within the Seventh Circuit.
Read 7th Circ. FLSA Notice Test Adds Flexibility, Raises Questions.