The Seventh Circuit Court of Appeals recently issued a significant ruling for employers facing Fair Labor Standards Act (FLSA) and Age Discrimination in Employment Act (ADEA) collective actions. In Richards v. Eli Lilly & Company, the court vacated and remanded a lower court’s decision to issue notice to nonparties in a collective action, establishing a new, uniform standard for determining when court-authorized notice may be sent to potential plaintiffs. This decision directly impacts the initial stage of collective actions—the process of determining which employees are “similarly situated” and should receive official notice of the lawsuit. For employers, this is a welcome shift away from the more plaintiff-friendly standard that was set forth in Lusardi v. Xerox, 99 F.R.D. 89 (D.N.J. 1983).
