The Seventh Circuit’s new middle-ground approach on collective action is the kind of legal development that sounds dry until you realize it can change the cost, speed, and leverage of major workplace lawsuits. In Richards v. Eli Lilly & Co., the court did not simply tweak a procedural knob. It replaced the old “almost everyone gets notice first, questions later” model with a more evidence-aware framework for Fair Labor Standards Act and Age Discrimination in Employment Act collective actions.
For employers, the decision offers an earlier chance to challenge broad proposed collectives. For employees and plaintiffs’ lawyers, it creates a clearer need to bring real evidence at the notice stage. For district courts, it says: you are not a rubber stamp, but you are not a brick wall either. That is the middle ground. It is not exactly a legal hammock, but compared with the circuit split around FLSA collective action notice, it is refreshingly practical.
What Is a Collective Action?
A collective action is a procedural device that lets similarly situated employees bring claims together, most often under the FLSA for wage-and-hour violations. The ADEA borrows the same collective-action mechanism for age discrimination claims. Unlike a Rule 23 class action, where absent class members are generally included unless they opt out, an FLSA or ADEA collective action requires workers to affirmatively opt in by filing written consent with the court.
That opt-in feature makes notice incredibly important. If potential plaintiffs do not know the case exists, they cannot join. If notice goes to too many people who are not truly similarly situated, the lawsuit can balloon into an expensive, settlement-driving machine before the court has tested whether the group belongs together. That tension is the whole drama. Yes, civil procedure has drama. It just wears sensible shoes.
The Old World: The Lusardi Two-Step Approach
For decades, many federal district courts used the Lusardi approach. Under that model, courts usually applied a lenient first-stage standard sometimes called “conditional certification.” Plaintiffs needed only a modest factual showing that other employees were similarly situated. If they cleared that low bar, the court would authorize notice to potential opt-in plaintiffs. Later, after discovery, the employer could move to decertify the collective at step two.
The advantage of Lusardi was speed. Courts could send notice early, preserving employee rights before limitations periods continued to run. The disadvantage was bluntness. Because many courts refused to weigh employer rebuttal evidence at the first stage, notice could issue to broad groups before the court had meaningfully tested similarity. In large wage-and-hour cases, that could turn a modest lawsuit into a litigation parade, complete with discovery costs, settlement pressure, and enough spreadsheets to make an accountant whisper, “Please stop.”
Why Richards v. Eli Lilly Matters
Richards v. Eli Lilly arose from an ADEA promotion-discrimination claim. Monica Richards, a longtime Eli Lilly employee in her early fifties, alleged that she was denied a promotion in favor of a younger employee. She sought notice to a proposed collective of employees aged 40 or older who had allegedly been denied promotions for which they were qualified. Her theory was that the company’s focus on supporting early-career professionals disadvantaged older employees.
The district court applied the familiar lenient approach and refused to consider Eli Lilly’s rebuttal evidence at the notice stage. The Seventh Circuit took an interlocutory appeal and used the case to establish a new standard for courts in Illinois, Indiana, and Wisconsin. The result: the old lenient Lusardi model is no longer the automatic playbook in the Seventh Circuit.
The Seventh Circuit Rejects Both Extremes
The Seventh Circuit agreed with the Fifth and Sixth Circuits that a purely lenient notice standard creates problems. A court-issued notice is not a casual postcard. It carries judicial authority and can influence whether people join a case. The court was concerned that notice based on thin allegations could compromise judicial neutrality and encourage claims that do not belong in the collective.
But the Seventh Circuit also refused to adopt the strictest approaches. The Fifth Circuit’s Swales approach generally pushes courts to decide similarity before notice, often through pre-notice discovery. The Sixth Circuit’s Clark approach requires a “strong likelihood” that employees are similarly situated. The Seventh Circuit viewed those standards as potentially too rigid, especially when the very evidence needed to prove similarity may be held by workers who have not yet received notice and joined the case.
So the court did what courts sometimes do when both sides are waving flags from opposite cliffs: it built a bridge.
The New Middle-Ground Test
Under the Seventh Circuit’s new framework, a plaintiff seeking notice must make a threshold showing that there is a material factual dispute about whether the proposed collective members are similarly situated. In plain English, the plaintiff must produce some evidence suggesting that the named plaintiff and the proposed opt-in members were affected by a common unlawful employment policy or practice.
This evidence does not have to prove similarity once and for all. The court recognized that the notice stage is still early. But allegations alone are not enough. Plaintiffs must bring something more concrete: declarations, company policy documents, comparable job duties, centralized decision-making evidence, payroll practices, promotion criteria, or other proof tying the group together.
Defendants, importantly, must be allowed to submit rebuttal evidence. That is a major change from the most plaintiff-friendly versions of Lusardi. Employers can now argue early that the proposed group is too broad, too varied, or connected only by a slogan rather than a common unlawful practice. Courts must consider how plaintiffs respond to that opposing evidence.
Notice Is Not Automatic Even After a Material Dispute
The new standard has another important feature: even when a plaintiff shows a material factual dispute, notice does not automatically follow. The district court still has discretion. If the court believes the evidence needed to resolve similarity is likely in the hands of not-yet-noticed workers, it may authorize notice and postpone the final similarity decision until after opt-ins and discovery.
On the other hand, if the court believes the dispute can be resolved before notice, it may order limited and expedited discovery. After that, the court can tailor the notice, narrow the proposed collective, or deny notice entirely. The court may also deny notice without prejudice if the plaintiff fails to produce enough evidence, leaving room for a renewed request if better evidence later appears.
The key word is flexibility. The Seventh Circuit wanted district judges to manage collective actions with both speed and neutrality. In other words: do not send the whole fleet when a canoe will do, but do not make plaintiffs build the canoe from invisible lumber.
How This Changes Litigation Strategy
For Employers
Employers now have a meaningful chance to contest notice before a proposed collective expands. That makes early case assessment more important than ever. Defense teams should gather evidence showing differences among employees, departments, locations, supervisors, compensation structures, job duties, exemption classifications, promotion processes, arbitration agreements, and decision-makers.
For example, if a plaintiff alleges a companywide overtime policy, an employer may counter with evidence that timekeeping rules differed by facility, that managers had local discretion, or that the named plaintiff’s experience was not shared by others. In a promotion-discrimination case, the employer may point to different job openings, separate hiring panels, individualized qualifications, or unrelated business units.
The goal is not simply to shout “not similar” in a legal voice. The goal is to create a factual record showing that broad notice would be inaccurate, inefficient, or unfairly coercive.
For Plaintiffs
Plaintiffs must come prepared. A complaint with strong adjectives will not be enough. Lawyers seeking notice should collect declarations from multiple employees, identify common policies, show consistent practices across locations, and explain why any differences do not defeat similarity. They should also be ready to engage directly with employer rebuttal evidence.
If the employer argues that practices varied by supervisor, plaintiffs may need evidence that the variation was superficial or that a central policy caused the alleged violation anyway. If the employer says job duties were individualized, plaintiffs may need to show that the relevant unlawful practice applied regardless of those differences. The new standard rewards precision. Vague collectives are going to have a rougher morning.
Examples of How the Middle-Ground Approach May Work
Example 1: Off-the-Clock Work
Suppose retail employees allege that managers across multiple stores required them to perform closing duties after clocking out. The employer responds that written policy prohibited off-the-clock work and that payroll records show no uniform violation. Under the Seventh Circuit’s approach, the court may consider declarations from employees and counter-evidence from the employer. If the court believes testimony from other workers is needed to resolve whether the informal practice was widespread, it may allow notice while reserving final certification for later.
Example 2: Misclassification of a Uniform Job Role
Imagine assistant managers across a chain allege they were misclassified as exempt and denied overtime. If the job description, pay structure, training materials, and corporate expectations are uniform, plaintiffs may have a stronger argument for notice. If the employer shows that duties varied dramatically by store size, staffing model, and actual authority, the court may narrow the collective or allow limited discovery first.
Example 3: Promotion Discrimination Across Departments
In a promotion case like Richards, similarity may be harder to show if promotion decisions were made by different managers for different roles in different regions. Plaintiffs would likely need evidence of a centralized policy, common evaluation criteria, or a companywide practice that plausibly affected the proposed group. Otherwise, the proposed collective may look less like a group harmed by one practice and more like a guest list for every employee disappointed by a promotion decision.
Why the Decision Deepens the Circuit Split
The Seventh Circuit’s framework adds another model to an already divided national landscape. Many courts still use versions of Lusardi. The Fifth Circuit follows a more demanding approach associated with Swales. The Sixth Circuit uses the Clark “strong likelihood” standard. The Seventh Circuit now uses a material-factual-dispute threshold combined with district-court discretion.
Eli Lilly asked the U.S. Supreme Court to review the issue, but the petition was denied in January 2026. That means the split remains. For national employers, the applicable standard may depend heavily on geography. For plaintiffs, forum selection can matter. For courts, the debate continues. Somewhere, a civil procedure professor is smiling into a very large mug of coffee.
Practical Effects For Workplace Compliance
The decision is procedural, but smart companies will treat it as a compliance reminder. If an employer has clear, lawful policies but inconsistent local practices, those inconsistencies can become evidence in collective action litigation. If pay practices, promotion criteria, or timekeeping expectations differ by region, employers should document why. If a policy is centralized, leadership should ensure it is lawful, consistently applied, and supported by training.
Recordkeeping also becomes more valuable. In wage-and-hour cases, accurate time records, exemption analyses, job descriptions, payroll data, and manager communications may shape the notice battle. In ADEA cases, promotion files, applicant comparisons, decision rationales, interview notes, and demographic review processes may become critical. The new framework does not eliminate collective actions. It simply makes the early evidentiary record more important.
Experience-Based Insights: What This Feels Like In Real Litigation
From a practical litigation perspective, the Seventh Circuit’s middle-ground approach changes the mood of the opening round. Under the old lenient model, the first notice motion often felt like a fast-moving train. Plaintiffs filed declarations, employers objected, courts frequently authorized notice, and everyone saved the real fight for decertification. That rhythm created predictability, but it also created pressure. Once notice went out, the case could grow quickly, and settlement discussions often began under the shadow of a much larger potential plaintiff group.
The new approach makes the opening round more serious. Plaintiffs now need to think like trial lawyers earlier. They must ask: What is the common unlawful policy? Who else experienced it? How do we know? Are the proposed members connected by the same decision-maker, same pay practice, same job duties, or same allegedly discriminatory standard? This is healthy discipline. It prevents the notice motion from becoming a fog machine that turns one claim into a nationwide cloud.
Employers, meanwhile, cannot simply rely on boilerplate opposition. The opportunity to submit rebuttal evidence is only useful if the evidence is organized, credible, and targeted. A judge will not be impressed by a 40-page brief that says “individualized issues” 87 times without explaining the actual differences. The best defense submissions will likely include clean charts, declarations from knowledgeable managers, policy comparisons, payroll samples, and a proposed narrower notice group if appropriate.
The most interesting practical effect may be on discovery. Limited pre-notice discovery could become a strategic battleground. Plaintiffs may argue that key similarity evidence is held by potential opt-ins and therefore notice should issue. Employers may argue that existing records can resolve the question now. Courts will need to police delay carefully because FLSA and ADEA claims are time-sensitive. A flexible standard works only if flexibility does not become molasses.
In day-to-day risk management, the lesson is simple: consistency beats improvisation. If a company’s official policy says one thing, regional managers should not quietly do another. If promotion criteria exist, they should be used and documented. If employees in the same role are treated differently, there should be a legitimate explanation. The new Seventh Circuit approach gives parties a better early forum to test these issues, but it also rewards organizations that can tell a coherent factual story without rummaging through the legal junk drawer.
Conclusion
The Seventh Circuit’s new middle-ground approach on collective action is a major shift in FLSA and ADEA litigation. It rejects the easiest version of the old Lusardi standard, refuses to adopt the strictest alternatives, and gives district courts a flexible tool for deciding when notice should issue. Plaintiffs must bring evidence of a common unlawful practice. Defendants may rebut that showing. Courts must balance timely notice, judicial neutrality, and efficient case management.
For employers, Richards is an invitation to build a strong early record. For plaintiffs, it is a reminder that collective allegations need collective proof. For everyone else, it is proof that procedural law can be surprisingly consequential, even when it arrives wearing the least exciting outfit in the courthouse.
Note: This article is for general informational and SEO publishing purposes only. It is not legal advice and should not be used as a substitute for advice from qualified employment counsel.
