Labor & Employment Law Daily Wrap Up, CLASS ACTIONS—7th Cir.: Seventh Circuit announces ‘framework’ for proper notice to proposed FLSA, ADEA collectives, (Aug 6, 2025)

By Jason Albright, J.D.

“The watchword here is flexibility, with respect for the principles outlined in Hoffmann-La Roche and the remedial goals of the FLSA and ADEA.”

In a case involving notice following conditional certification of a collective action under the ADEA, the Seventh Circuit has announced a “framework” for assessing the propriety of notice to a proposed FLSA—or ADEA—collective. To secure 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. Thereafter, 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 issue notice to the proposed collective while postponing the final determination as to whether plaintiffs are similarly situated until plaintiffs move for certification after opt-in and discovery are complete. 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. Judge Hamilton concurred in part and concurred in the judgment (Richards v. Eli Lilly & Co., No. 24-2574 (7th Cir. Aug. 5, 2025)).

Collective actions under FLSA and ADEA. To ensure broad and robust enforcement, the Seventh Circuit initially explained, the FLSA permits employees to bring collective actions to sue employers for violations of the FLSA on behalf of themselves and other similarly situated employees. 29 U.S.C.§216(b). The ADEA also incorporates this enforcement provision, permitting employees to band together in collective actions when suing an employer for age discrimination.

Notice standards. However, with minimal guidance from Congress or the U.S. Supreme Court, federal district courts have largely been left to devise their own standards for facilitating notice to similarly situated employees. Over the last few decades, according to the appeals court, most district courts—including those in the Seventh Circuit—have followed the Lusardi approach, which originated in a New Jersey district court. See Lusardi v. Xerox Corp, 118 F.R.D. 351, 361 (D.N.J. 1987).

Lusardi and significance of expeditious notice in FLSA cases. At the first step under Lusardi, a plaintiff seeking notice to a proposed collective must make a “modest factual showing sufficient to demonstrate that they and potential plaintiffs together were victims of a common policy or plan that violated the law.” Once a plaintiff makes this “modest” showing, the court issues notice to prospective plaintiffs, who may then opt in to the collective action by filing written consent with the court. Occasionally, if significant discovery has already taken place, courts will impose a higher level of scrutiny—referred to as a “modest-plus” or “intermediate” standard—before issuing notice.

Expeditious notice is particularly important in FLSA cases, according to the appeals court. Under the FLSA, the statute of limitations is not automatically tolled to the date of the first filing for plaintiffs who have yet to opt in. 29 U.S.C. § 256(b). This means that delays in notice risk limiting or even running out the clock on putative plaintiffs’ claims. “Notice also matters greatly to defendants,” according to the court, “who worry that overly permissive notice standards will allow plaintiffs to artificially expand the size of a collective, ‘increas[ing] pressure to settle, no matter the action’s merits.’” Notice to employees who are ineligible to join a collective may also risk stirring up further litigation against an employer, especially if court-issued notice is perceived as an invitation for “those employees to bring suits of their own.”

Increasing scrutiny of Lusardi. In recent years, however, Lusardi’s lenient notice standard has become the object of increasing scrutiny, and “[c]onsensus as to the proper standard for notice remains elusive.” Several circuits have approved the use of some version of Lusardi’s two-step approach, according to the Seventh Circuit, but recently, the Fifth and Sixth Circuits have expressly rejected Lusardi’s modest notice standard in favor of a heightened burden of proof. The Fifth Circuit now holds that notice may only issue if, at the outset of the case, plaintiffs can demonstrate that notice recipients are “actually similar to the named plaintiffs,” ostensibly by a preponderance of the evidence. Meanwhile, the Sixth Circuit has concluded that notice may issue only where plaintiffs can show a “strong likelihood” that employees are similarly situated.

Case before the court. In the case before the Seventh Circuit on appeal, the plaintiff applied for a promotion to become District Sales Manager for one of Eli Lilly’s Boston- based sales teams. A six-year veteran of the company in her early 50s, she had already been occupying the role on an interim basis for nearly six months.

When the promotion was given to a much younger employee with less sales experience, the plaintiff sued Eli Lilly & Company and Lilly USA, LLC, in federal district court, alleging age discrimination in violation of the ADEA and the Massachusetts Anti-Discrimination Law.

Conditional certification step. On her ADEA claim, she moved to conditionally certify a collective action, asserting that the unfavorable treatment she experienced was part of a broader pattern of age discrimination against Eli Lilly’s older employees.

Notice. To alert other potential plaintiffs to her suit, she requested that the court send notice of the action to all “Eli Lilly employees who were 40 or older when they were denied promotions for which they were qualified, since February 12, 2022.” The members of this proposed collective were similarly situated, she alleged, because they had all been plausibly harmed by a companywide initiative to support and retain “Early Career Professionals” (i.e., workers with less than two years of postgraduate experience) at the expense of older, more experienced employees.

Lusardi followed below. Though the parties debated the appropriate standard for notice, the district court ultimately followed Lusardi and refused to consider Eli Lilly’s evidence opposing the similarity of the proposed collective. Concluding that the plaintiff had made the requisite modest factual showing, the district court conditionally certified the collective and agreed to issue notice. Recognizing, however, that the Seventh Circuit had not yet articulated a standard to govern the issuance of notice, the district court certified the question for interlocutory review under 28 U.S.C. § 1292(b).

The Seventh Circuit agreed to take the interlocutory appeal in light of the Fifth and Sixth Circuit’s recent decisions rejecting Lusardi’s “modest showing” standard.

Three principles. Noting that the text of the FLSA is silent with respect to notice, the court’s analysis began with Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165 (1989), from which it “extract[ed] three core principles to guide the proper facilitation of notice.” First was the importance of ensuring that notice is timely and accurate. Second was the principle of judicial neutrality: a district court’s involvement in the notice process must remain “distinguishable in form and function from the solicitation of claims,” and courts must facilitate notice in such a way as to “avoid even the appearance of judicial endorsement of the merits of the action.” Third and finally, district courts must use their discretion to “govern[] the conduct of counsel and the parties” to prevent abuses and ensure that the joinder of additional parties “is accomplished in an efficient and proper way.”

Threshold showing as to similarity. With these and some additional observations in mind, the Seventh Circuit decided that, to secure 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 appeals court said, “we mean that a plaintiff must produce some evidence suggesting that they and the members of the proposed collective are victims of a common unlawful employment practice or policy. A plaintiff’s evidence of similarity need not be definitive, but defendants must be permitted to submit rebuttal evidence and, in assessing whether a material dispute exists, courts must consider the extent to which plaintiffs engage with opposing evidence.”

This threshold showing reflects “both the preliminary stage of the proceedings and the practical significance of notice to both parties,” according to the court. “A lower standard would permit notice based on little more than allegations, conflicting with the Court’s warning against encouraging ‘the solicitation of claims.’ Hoffmann-La Roche, 493 U.S. at 174.” And on another hand, “a substantially higher standard risks leaving some plaintiffs in limbo, unable to make the required showing without access to evidence held by individuals who are not yet parties to the case.”

Assessment of factual dispute. Once the district court is satisfied that there is at least such a material factual dispute, according to the Seventh Circuit, the decision to issue notice will depend on the district court’s assessment of the factual dispute before it, exercising its “sound discretion” to “facilitate notice in an efficient way that strikes an appropriate balance between timely notice and judicial neutrality.”

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, according to the appeals court, it may proceed with a two-step approach: it may issue notice to the proposed collective while postponing the final determination as to whether the plaintiffs are similarly situated until they move for certification after opt-in and discovery are complete.

Alternatively, if the district 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.

Finally, if a plaintiff fails to produce evidence that establishes a material factual dispute, a district court might deny the motion for notice without prejudice, subject to possible reconsideration if the plaintiff comes forward with further evidence. “The watchword here is flexibility,” explained the Seventh Circuit, “with respect for the principles outlined in Hoffmann-La Roche and the remedial goals of the FLSA and ADEA.”

Concurrence. Concurring in part and concurring in the judgment, Judge Hamilton wrote only to address what happens after notice is issued to people who may be similarly situated to the lead plaintiff in FLSA or ADEA cases. The majority, he noted, “opines without citing relevant authority (a) that the plaintiff bears the burden of moving to ‘certify’ a collective action and (b) that similarity must be proven by a preponderance of the evidence.” “We would do better,” he said, “not to opine on either point in this case, where this passage amounts to obiter dictum.”

The case is No. 24-2574.

Judge: Kirsch, T.

Attorneys: Harold L. Lichten (Lichten & Liss-Riordan) for Monica Richards. Jonathan Matthew Linas (Jones Day) for Eli Lilly and Co. and Lilly USA, LLC.

Companies: Eli Lilly and Co.; Lilly USA, LLC

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