Impact of the Fifth Circuit’s Swales Decision on the FLSA Collective Action Certification Process

November 12, 2021 | Insights

By Lionel M. Schooler

Employers confronted with Fair Labor Standards Act (FLSA) claims as to their operations in Texas, Louisiana, or Mississippi should take note of a new decision by the United States District Court for the Northern District of Texas concerning the process of certification of collective actions.

Opt-In Participation in FLSA Collective Actions

Because of the structure of the FLSA, current or former employees wishing to participate in a lawsuit for unpaid wages are required to state affirmatively that they wish to “opt-in.” They can pursue the opportunity to do so if it is shown that they are “similarly situated” to the named plaintiff(s).

Therefore, the first issue usually raised by plaintiffs who sue employers for unpaid wages under the FLSA has been to seek court approval to notify such potential claimants of the pendency of the lawsuit, and their right to join, a process that has come to be known as the “collective certification” process.

The Lusardi Two-Step Approach for Conditional Certification

Before the beginning of 2021, the collective certification process applied by courts in Texas, Louisiana, and Mississippi was a two-step process labeled the “Lusardi” approach. The first such stage, the “permission to send notice” stage, was structured to ascertain whether the named plaintiff(s) had identified “substantial allegations” of the existence of an employer’s single wage decision or policy that affected an entire group. This stage was characterized as “lenient,” because of the low bar of proof imposed upon the named plaintiff(s).

Under the Lusardi approach, therefore, permission to issue notice in the first stage was usually granted, even where an employer might challenge the ability of the named plaintiff to qualify as a member of the proposed group, or the timeliness of his or her complaint. As a companion component of the first stage, the lenient approach imposed upon employers the expense of having to provide available contact information for all potentially qualifying claimants who had been employed by it during a time period established by the court.

Lusardi then called for a second stage in the certification process, following completion of discovery. At this stage, the employer was afforded the opportunity to contest the standing of the named plaintiff(s) to file the lawsuit or to be characterized as “similarly situated,” as well as to challenge the propriety of certification and the inclusion of opt-in claimants to participate.

Swales: The New Standard for Certification in the Fifth Circuit

In Swales v. KLLM Transport Services, 985 F.3d 430 (5th Cir. Jan. 12 2021), the United States Court of Appeals for the Fifth Circuit completely altered the framework for conducting the certification process in FLSA lawsuits filed in Texas, Mississippi, or Louisiana. It did so by re-examining the “similarly situated” procedure and, correspondingly, who if anyone might be entitled to receive notice of the pending lawsuit and the opportunity to opt-in as a claimant.

The Swales court abandoned the two-stage Lusardi approach altogether, noting that nothing in the text of the FLSA even mentions “conditional certification.” In its place, the court directed that lower courts in Texas, Louisiana, and Mississippi are now required, at the outset of a case, to “rigorously scrutinize” who might constitute a “similarly situated” worker, utilizing both facts and applicable law to determine whether a group is so situated, and authorizing preliminary discovery to address this particular question, with the burden upon the plaintiff to demonstrate the propriety of certification. The Swales court specifically directed federal courts to consider all available evidence to determine if analyzing the merits of pending claims required a “highly individualized inquiry” into each opt-in’s circumstances and, if such an inquiry were required, to declare that certification was inappropriate.

Application of Swales

The federal court in the Northern District of Texas in Dallas recently applied the new Swales certification prescription in Helgason et al v. Perry’s Restaurants, Ltd., a case involving individuals who worked as servers in restaurants, where the named plaintiffs sought the right to issue a notice of the right to opt-in to approximately 1,700 potential claimants. The court denied such relief.

The plaintiffs supported their certification request with several declarations concerning claims of minimum wage violations for tip pool handling, side work assignments, and charges for uniforms and other business-related items. The employer responded by challenging the sufficiency of such evidence on either an evidentiary basis or as a matter of law.

The court noted, as to one of the claims (tip pool claim), that the plaintiffs failed to meet their burden to submit admissible evidence to demonstrate compliance with FLSA requirements because of a lack of personal knowledge supporting such evidence. As to another of the claims (uniform charges), the court noted that the plaintiffs failed to demonstrate a potential FLSA violation affecting no more than one or two individuals. Finally, as to the third claim (excessive side work), the court found that rather than demonstrating a uniform policy, the plaintiffs’ evidence actually showed the individualized nature of their claim.

As a result of this Swales analysis, the court in Helgason concluded that the plaintiffs failed to carry their burden to demonstrate the propriety of certification. All of the opt-in claimants were therefore dismissed from the lawsuit, leaving only the two named plaintiffs to pursue their “individualized” claims.


As the recent Helgason decision demonstrates, in the new age of FLSA certification after Swales, employers in Texas, Louisiana, and Mississippi, who have to confront collective action lawsuits by workers seeking to pursue wage claims, will now have the opportunity at the outset of a lawsuit to participate in focused discovery by which to challenge claims of “similar situations,” before a costly notice and opt-in process can occur. More information on this process is available from Jackson Walker’s Labor & Employment professionals.

Lionel SchoolerMeet Lonnie

Lionel M. Schooler is a management-side employment lawyer and recognized authority on employment law, federal appellate practice, and arbitration. Lonnie’s employment practice focuses on counseling clients and litigating, on a nationwide basis, claims under all employment laws, wage and hour claims, workers’ compensation coverage issues, and investigations by the Equal Employment Opportunity Commission, the U.S. Department of Labor, and the Texas Workforce Commission. Lonnie is also experienced as an arbitrator of domestic and international disputes, including his service on the Commercial and Employment Panels of the American Arbitration Association and as an advocate.

Lonnie, along with Jackson Walker attorneys Scott M. McElhaney and Brooke Willard, successfully represented Perry’s Steakhouse in the lawsuit discussed in the article.

The opinions expressed are those of the author and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for informational purposes only and does not constitute legal advice.