Takeaways

• The Seventh Circuit found the traditional two-step approach in collective actions too lenient, but more recent frameworks too restrictive.
• The panel rejected a rigid test in favor of giving courts flexibility to decide in each case whether they have the evidence they need to make the determination.
• In a significant departure from the traditional approach, courts must give employers the opportunity to rebut plaintiffs’ evidence that potential opt-ins are similarly situated.

The U.S. Court of Appeals for the Seventh Circuit has provided a new framework for district courts to apply when deciding whether to issue notice to potential plaintiffs of a pending collective action under the Fair Labor Standards Act (FLSA) and other statutes that share the FLSA’s collective action framework. Richards v. Eli Lilly & Co. and Lilly USA, LLC, No. 24-2574 (Aug. 5, 2025). Rejecting the long-standing approach used by most courts, the Seventh Circuit panel adopted a flexible standard that gives courts discretion to fashion an approach based on the particular case.

The Seventh Circuit has jurisdiction over Illinois, Indiana, and Wisconsin.

Reconsidering Lusardi

When deciding whether to approve notice to potential plaintiffs, most federal courts, including those in the Seventh Circuit, have used the traditional two-stage framework introduced in Lusardi v. Xerox Corp., 99 F.R.D. 89 (D.N.J. 1983), an Age Discrimination in Employment Act (ADEA) case. Under Lusardi (and variations...

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