The Seventh Circuit’s recent decision in Richards v. Eli Lilly & Co. et al. (Aug. 5, 2025) marks a pivotal shift in how district courts manage collective actions under the Fair Labor Standards Act (FLSA) across Illinois, Indiana, and Wisconsin. The ruling injects much-needed rigor into the notice process, requiring courts to consider evidence from both sides before notice is sent to hundreds or thousands of potential plaintiffs. This new standard will provide an additional tool to pressure-test weak cases, potentially saving employers significant litigation costs and reducing artificially inflated settlements.
The FLSA permits employees to pursue claims not only on their own behalf but also for other “similarly situated” individuals through collective actions. Unlike typical Rule 23 class actions, FLSA collective actions rely on opt-in mechanisms, meaning similarly situated plaintiffs must affirmatively join the action. Historically, most district courts, including those in the Seventh Circuit, have used the two-step approach established by a New Jersey court in 1987 (Lusardi v. Xerox Corp., 118 F.R.D. 351) requiring only a “modest factual showing” that other employees were similarly situated before issuing court-authorized notice to putative collective members.
In practice, this approach prejudiced employers by expediting early notice, increasing potential exposure, and limiting the employers’ ability to meaningfully present...
The facts before the Third Circuit in the recently decided case of Patel v. United States illustrate how parties can put themselves in a bind if they make factual admissions when resolving a crimi...