Many courts today use the two-step procedure described in Lusardi v. Xerox Corp., 99 F.R.D. 89 (D.N.J.1983), to decide whether to certify potential classes under section 16(b) of the Fair Labor Standards Act.  Under that procedure, the court the court looks at certification twice, first before much discovery is done, and again at the close of discovery.  In both cases, the question is whether the class members are “similarly situated,” but the standard is different.

Under the Lusardi approach, the court typically uses a lighter standard to certify at the early “preliminary certification” stage, and requires only a modest showing that the class members are similarly situated.  If the court finds that the case meets that standard, it “conditionally” certifies the class and orders notice to the potential class members and the appropriate opt-in procedures.  Once more discovery is completed, the defendant can move to decertify the class. The plaintiff has a much higher burden to keep the class at this second stage.

This two-step procedure tends to create a false sense of victory on behalf of the plaintiffs when the case is conditionally certified.  Certainly, conditional certification aids in getting notice to the class and securing opt-ins, and obviously a defeat at this stage is a serious set-back to a “class” strategy.  But unlike a Rule 23 class, decertification still remains a significant likelihood and even a probability.

Fifteen years ago (after 16(b) had been the law for many decades), the Fifth Circuit found that “Based on our review of the case law, no representative class has ever survived the second stage of review.”  Mooney v. Aramco Services Co., 54 F.3d 1207 (5th Cir. 1995). Two recent decisions reflect that decertification still remains  a serious possibility in any case that has been conditionally certified.

Most recently, in Lugo v. Farmers Pride Inc.pdf, the United States District Court for the Eastern District of Pennsylvania considered the claims of a group of chicken processors who brought a “donning and doffing” claim under the FLSA for the time they spend putting on and taking off their protective clothing and equipment.  The court conditionally certified the class in the spring of 2008, permitting it to proceed as a collective action.  Following two years of additional discovery, however, the court decertified the class, finding that the employees situations varied based upon their positions, departments, and shifts.  While the court left open the possibility that a smaller class might be viable, the decision cannot be termed anything but a victory for the employer.

In a completely different court and industry, earlier this year the United States District Court for the Northern District of California considered a claim that low-level supervisors for an automobile finance company had been misclassified as exempt for overtime purposes.  Hernandez v. United Auto Credit Corp.pdf., but it too, later found that the class should be decertified. In Hernandez, the court, like the court in Lugo, conditionally certified the class, but it, too, later found that the class should be decertified.  In the Hernandez case, the difficulty was that, as discovery revealed, the duties and responsibilities of the putative class members varied, making them something other than “similarly situated,” and making class action treatment inappropriate.

The bottom line:  While defendants want to avoid conditional certification, decertification under section 16(b) remains a very real likelihood at the end of the case.