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Friday, January 23, 2026

Seventh Circuit Rejects Lenient Two-Step 'Lusardi' Standard for FLSA/ADEA Collective Action Notice - Law.com

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).

Background

The FLSA and the ADEA require that similarly situated employees “opt in” to existing lawsuits in order to join. This is in contrast from class actions, where similarly situated employees become members of the class (if one is certified) unless they opt out (presuming the applicable rules allow for an opt out process). In its 1989 decision in Hoffmann-La Roche v. Sperling, the U.S. Supreme Court authorized federal district courts to assist plaintiffs in finding employees who do not opt in. However, that decision did not provide any standard that a plaintiff must meet for a district court to authorize notice. Given the lack of a uniform standard, district courts have...



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