A recent decision by the Ninth Circuit Court of Appeals has contributed to a split among the Circuits regarding jurisdiction in collective actions cases brought under the Fair Labor Standards Act (FLSA).
The FLSA allows an action to recover unpaid compensation to be brought “for and in [sic] behalf of himself or themselves and other employees similarly situated.” An employee may not be a party plaintiff to such an action unless they give their consent. See 29 U.S.C. § 216(b). In the case of Harrington v. Cracker Barrel Old Country Store, Inc., 142 F.4th 678 (9th Cir. 2025), former and current employees of Cracker Barrel brought suit in federal courts in Arizona, alleging that Cracker Barrel violated the FLSA regarding wages for tipped employees. Collective action litigation typically involves a two-step “certification” process to determine whether employees are similarly situated. First, plaintiffs will move for “preliminary certification” of the collective action, alleging that they have at least facially satisfied the requirement that the plaintiff employees be similarly situated. The only “consequence” of preliminary certification is that court-approved written notice is sent to prospective-plaintiff employees. Those employees may opt to join the collective action by filing a written consent with the court. At a later stage in the proceedings, after the completion of discovery, defendants may move for decertification of the collective action on the theory that the plaintiffs are not similarly situated. 142 F.4th at 681.
The District cCourt granted the preliminary certification and approved notice to prospective opt-in plaintiffs. The certified group of plaintiffs included employees who may have entered into arbitration agreements with Cracker Barrel, and also included out-of-state employees with no apparent ties to Cracker Barrel’s operations in the forum state, Arizona. The Ninth Circuit granted Cracker Barrel’s motion to permit an interlocutory appeal to address, among other issues, whether it was permissible for the district court to authorize notice to both “(1) employees that allegedly entered into arbitration agreements with the defendant, and (2) out-of-state employees with no apparent ties to the defendant’s activities in the forum state.”
Arbitration Agreements
The Seventh Circuit, Fifth Circuit and Sixth Circuit have all agreed that a district court can authorize notice to employees who have entered into an arbitration agreement if it is undisputed that the employees are bound by valid arbitration agreements. However, the Fifth and Seventh Circuits have gone even further, requiring evidentiary hearings if there is a dispute as to whether an employee/prospective opt-in plaintiff is bound by an arbitration agreement. See In Re: JPMorgan Chase & Co., 916 F.3d 494 (5th Cir. 2019), and Bigger v. Facebook, Inc., 947 F.3d 1043 (7th Cir. 2020). If an employer shows, by a preponderance of evidence, that the absent employees have agreed to an arbitration clause, then the district court cannot authorize notice. However, the Sixth Circuit disagreed with this bright-line rule, questioning the practicality of a district court making these determinations. The Court formulated a stricter standard, and said that, in order for a district court to facilitate notice of an FLSA suit to other employees, the plaintiffs must show a “strong likelihood” that those employees are similarly situated to the plaintiffs themselves. The “strong likelihood” standard requires an evidentiary showing greater than the one necessary to create a genuine issue of fact, but less than the one necessary to show a preponderance of the evidence. See Clark v. A&L Homecare and Training Center, LLC, 68 F.4th 1003, 1011 (6th Cir. 2023).
In Harrington, the Ninth Circuit agreed that the district court should not authorize notice if the existence of arbitration agreements is undisputed. However, the Ninth Circuit declined to adopt a rule requiring district courts to make a ruling regarding the disputed existence of arbitration agreements. The Court questioned the feasibility of determining the arbitrability of each prospective opt-in plaintiffs and stated that the “district court may reserve that determination until after the prospective plaintiffs have, in fact, opted into the litigation.” Harrington, supra, 142 F.4th at 684.
Personal Jurisdiction
The Ninth Circuit also addressed the propriety of nationwide notice, mentioning the divide between circuit and district courts as to whether the claim-by-claim analysis for specific personal jurisdiction laid out in Bristol-Myers Squibb Company v. Superior Court of California, 582 U.S. 255 (2017), applies in FLSA collective actions. In Bristol-Myers, the Court held that the state court lacked personal jurisdiction over a defendant on claims brought by plaintiffs who are not residents of that state and who did not suffer their alleged injury in that state.
The Third, Sixth, Seventh and Eight Circuits have all held that Bristol-Myers does apply in FLSA collective actions. See Fischer v. Federal Express Corp., 42 F.4th 366 (3rd Cir. 2022); Canaday v. Anthem Cos., Inc., 9 F.4th 392 (6th Cir. 2021); Vanegas v. Signet Builders, Inc., 113 F.4th 718 (7thCir. 2024); and Vallone v. CJS Solutions Group, LLC, 9 F.4th 861 (8th Cir. 2021). The First Circuit has disagreed, and in Waters v. Day & Zimmerman NPS, Inc., 23 F.4th 84 (1st Cir. 2022), reasoned that, although the Fourteenth Amendment does constrain personal jurisdiction in a FLSA collective action, analysis under that Amendment is relevant only to the service of a summons by the original plaintiff.
The Ninth Circuit agreed with the majority that Bristol-Myers applies in FLSA collective actions in federal court and stated that “where the basis for personal jurisdiction in the collective action is specific personal jurisdiction, the district court must assess whether each opt-in plaintiff’s claim bears a sufficient connection to the defendant’s activities in the forum state.” 142 F.4th at 682. The employee-plaintiffs argued that Bristol-Myers should not apply to their case because a collective action under the FLSA is similar to a class action where the personal jurisdiction should be analyzed at the level of the suit. However, the Ninth Circuit, although not confronted with the applicability of Bristol-Myers to a class action, was not swayed by this argument and reasoned that the Ninth Circuit has already found that collective actions and class actions are fundamentally different. See Campbell v. City of Los Angeles, 903 F.3d 1090, 1100 (9th Cir. 2018).
The plaintiffs also argued that the Bristol-Myers did not apply due to the Fifth Amendment constraining personal jurisdiction in federal courts, not the Fourteenth Amendment. However, the FSLA does not have a provision for nationwide jurisdiction or service of process, so the Ninth Circuit, following precedence from other circuits, followed state law. 142 F.4th at 686.
Looking Ahead
The two-step analysis for deciding if FLSA plaintiffs are similarly situated is the majority rule; however, the plaintiff’s burden of showing substantial similarity will vary. The personal jurisdiction holding seems to indicate that FLSA claims must be brought either in individual states, increasing the logistical burden on employees, or in the state in which the employer has its principal place of business, where there will always be jurisdiction.