With a nod to discretion and practicality, the Seventh Circuit has become the latest U.S. Court of Appeals to depart from the traditional two-step collective certification process in cases brought under the Fair Labor Standards Act (FLSA) and the Age Discrimination in Employment Act (ADEA). In doing so, the Seventh Circuit set forth the most flexible standard of any federal appellate court for determining whether an action should proceed on a collective basis.
For decades, courts evaluating collective actions under 29 U.S.C. § 216(b)—including those brought under the FLSA and ADEA—applied a two-step process to determine whether a case could proceed on a collective basis. At the first step, plaintiffs typically sought conditional “certification” by making a modest showing that potential opt-in plaintiffs are “similarly situated.”[1] If a plaintiff’s request for court-ordered notice was granted, notice was sent to these individuals, who may choose to join the case. At the second step—typically after discovery—defendants could move to “decertify” the collective, prompting a more searching inquiry into whether the plaintiffs were, in fact, similarly situated.
In 2021, in Swales v. KLLM Transport Services, LLC, the Fifth Circuit became the first Court of Appeals to reject the traditional two-step approach—opting for a significantly more demanding standard and holding that notice may issue only if, at the outset of the case, the plaintiffs can demonstrate that notice recipients are “actually similar to the named plaintiffs.” KLLM Transp. Servs., LLC, 985 F.3d 430, 434 (5th Cir. 2021). In Clark v. A&L Homecare & Training Center LLC, 68 F.4th 1003 (6th Cir. 2023), the Sixth Circuit became the second Court of Appeals to depart from the traditional approach but set forth a slightly less rigorous standard than Swales’s.Under Clark, notice may be sent only where plaintiffs can show a “strong likelihood” that employees are similarly situated. Clark, 68 F.4th at 1011.
Following the Swales and Clark decisions, most district courts within the Seventh Circuit continued to apply the traditional two-step framework, but some had forged their own path in light of those decisions. On August 5, 2025, the Seventh Circuit in Monica Richards v. Eli Lilly & Company, et al., put to bed those divergent paths, expressly rejecting the traditional two-step framework—and both the Fifth and Sixth Circuits’ frameworks—and deeming all three impractical and inflexible.
In charting its own course, the Seventh Circuit concluded that “to secure a notice, a plaintiff must first make a threshold showing that there is a material factual dispute as to whether the proposed collective is similarly situated.” By this, the court means that the plaintiff must first provide some evidence suggesting similarity; the defendant is then allowed to provide rebuttal evidence disproving similarity across the proposed collective (which a district court must consider), and that in assessing the evidence, a court must consider the extent to which plaintiff has proffered opposing evidence. Anticipating the inherent difficulties in requiring evidence of similarity prior to discovery, the court noted that affidavits will suffice and that district courts should have no difficulty in assessing whether competing affidavits create a material factual dispute.
Importantly, however, a plaintiff is not automatically entitled to send notice upon the establishing of the existence of a material fact as to similarity. Rather, once the district court makes this preliminary determination, the decision to issue notice depends on its assessment of the factual dispute before it. If the district court is persuaded that the evidence necessary to resolve a similarity dispute is likely in the hands of yet-to-be-noticed plaintiffs, it may proceed with a two-step approach. Alternatively, if the court is confident that a similarity dispute can be resolved by a preponderance of the evidence before notice, it may authorize limited and expedited discovery to make this determination and tailor (or deny) notice accordingly.
The Seventh Circuit emphasizes the flexibility of its new framework, entrusting district courts with substantial discretion. For example, if a district court does allow for pre-notice discovery, it must supervise the process closely—allowing only discovery that is narrowly tailored to the “similarly situated” inquiry—and should decide “as soon as practicable” whether notice is appropriate. In doing so, district courts should also consider the tolling of the statute of limitations applicable to putative collective members’ claims while the court manages the pre-notice discovery process.
The discretion the Richards’s decision provides to district courts includes permission to consider the merits of a factual dispute—something defendants opposing court-ordered notice have for years advocated for across all jurisdictions. Indeed, the Seventh Circuit expressly noted that plaintiffs cannot secure notice unless they have “produce[d] some evidence suggesting that they and the members of the proposed collective are victims of a common unlawful employment practice or policy.” In other words, simply showing that employees may be subject to a common policy or practice should not suffice.
How the case will proceed from here is unclear. For instance, Richards could petition the Seventh Circuit for a rehearing en banc; petition the U.S. Supreme Court to grant certiorari to resolve the current circuit split; or proceed in the district court under the Seventh Circuit’s new collective certification framework. Regardless, what happens next bears watching as it could have substantial implications on where plaintiffs pursue collective action claims and how employers defend them.
[1] We have placed “certification” and “decertify” in quotations based on the Seventh Circuit’s disapproval of the use of these terms in the context of a collective action—warning parties not to conflate these actions with Rule 23 class actions.
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