Justin Hubbard v. Southwood Realty Company

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF NORTH CAROLINA CHARLOTTE DIVISION 3:24-CV-00481-MEO-DCK JUSTIN HUBBARD, ) ) Plaintiff, ) ) v. ) MEMORANDUM AND ORDER ) SOUTHWOOD REALTY COMPANY, ) ) Defendant. ) ) THIS MATTER is before the Court on Plaintiff’s “Motion for Conditional Certification and to Provide Notice Pursuant to 29 U.S.C. §216(b).” (Doc. No. 26). The Court held a hearing on the Motion and ordered the parties to meet and confer and to provide the Court with a proposed limited discovery plan specific to the issue of whether Plaintiff is similarly situated to his proposed collective. (Dkt. Entries on March 3, 2026). The parties filed a Joint Report and Proposed Discovery Plan. (Doc. No. 45). Accordingly, this matter is ripe for disposition.

I. BACKGROUND Southwood Realty Company (“Southwood”) is a property management company for residential apartment complexes. (Doc. No. 26-2; Stowe Dep. 30:8-11). Southwood has many properties located in North Carolina, South Carolina, Virginia, Tennessee, and Georgia. (Doc. No. 26-4). Southwood employs several types of employees, including maintenance supervisors, maintenance technicians, leasing consultants, property managers, and assistant property managers. (Doc. No. 26-5 at 2, 6, 10, 14, 18). Southwood employed Plaintiff Justin Hubbard as a full-time maintenance supervisor at a Knoxville facility. (Doc. No. 26-6; Hubbard Decl. ¶ 3).

Plaintiff filed his Collective Action Complaint on May 15, 2024, alleging violations of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq. (Doc. No. 1 ¶ 1). Plaintiff alleges, on behalf of himself and all others similarly situated who opt into this action pursuant to 29 U.S.C. § 216(b), that they are entitled to unpaid wages, including overtime premiums for all hours worked in excess of forty hours per workweek as well as overtime bonus premiums. (Doc.

No. 1 ¶¶ 1, 4, 49).

On February 14, 2025, Plaintiff filed his “Motion for Conditional Certification and to Provide Notice Pursuant to 29 U.S.C. § 216(b).” (Doc. No. 26). In his Motion, Plaintiff requests the Court enter an order granting “conditional certification” and authorizing Plaintiff to send notice to the following collective: all current and former employees who have worked full-time for at least one week for Defendant as non-exempt, hourly employees and worked “on-site” of any of the properties managed by Defendant (i.e., Maintenance Technician, Maintenance, Leasing Agents, Property Managers, and Assistant Property Managers) in the United States during the time period beginning three years prior to the filing of this Complaint until the resolution of this action. (Doc. No. 26 at 1). Defendant filed a response in opposition to Plaintiff’s motion. (Doc. No. 34).

The Court held a Motion Hearing on March 3, 2026. At the hearing, the Court observed that there is no controlling Fourth Circuit precedent on the issue, and the Court noted its inclination to apply the Fifth Circuit’s clear, statutorily supported framework for assessing whether putative plaintiffs are similarly situated as outlined in Swales v. KLLM Transp. Servs., L.L.C., 985 F.3d 430, 433–34, 441 (5th Cir. 2021). The Court ordered the parties to meet and confer and create a proposed limited discovery plan on the issue of whether Plaintiff is similarly situated to his proposed collective. (Oral Order entered on March 3, 2026). The parties filed a Joint Report and Proposed Discovery Plan on March 18, 2026. (Doc. No. 45).

II. DISCUSSION The Fair Labor Standards Act of 1938 (the “FLSA”), 29 U.S.C. § 201 et seq., “establishes federal minimum-wage, maximum-hour, and overtime guarantees that cannot be modified by contract.” Genesis Healthcare Corp. v. Symczyk, 569 U.S. 66, 69 (2013). The FLSA “gives employees the right to bring a private cause of action on their own behalf and on behalf of ‘other employees similarly situated’ for specified violations of the FLSA.” Id. (quoting 29 U.S.C. § 216(b)). The FLSA includes an “opt-in requirement.” Degidio v. Crazy Horse Saloon & Rest. Inc., 880 F.3d 135, 143 (4th Cir. 2018) (“To join an FLSA class, each potential plaintiff must consent in writing to become a party in the case. . . . This mechanism has come to be known as the ‘opt-in’ requirement.”). The opt-in requirement provides “[n]o employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought.” 29 U.S.C. § 216(b). “A suit brought on behalf of other employees is known as a ‘collective action.’” Genesis Healthcare Corp., 569 U.S. at 69 (quoting Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 169–170 (1989)). “Thus, via § 216(b), the FLSA provides a vehicle for managing claims of multiple employees against a single employer.” Halle v. W. Penn Allegheny Health Sys., 842 F.3d 215, 223 (3d Cir. 2016).

Since “[n]ormally plaintiffs come to the courts, rather than vice versa,” Clark v. A&L Homecare & Training Ctr., LLC, 68 F.4th 1003, 1007 (6th Cir. 2023), the question arises in FLSA cases—how does an employee learn about the existence of a FLSA lawsuit in order to “opt-in”?

In Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165 (1989), the United States Supreme Court held that “district courts have discretion, in appropriate cases, to implement 29 U.S.C. § 216(b) . . . by facilitating notice to potential plaintiffs.” Hoffmann-La Roche, 493 U.S. at 169. But the Court declined to “examine the terms of the notice . . . or its concluding statement indicating court authorization.” Id. at 170. The Court simply “confirm[ed] the existence of the trial court’s discretion, not the details of its exercise.” Id. Without further guidance from the Supreme Court, however, ironing out “the details of [the trial court’s] exercise” of notice to “potential plaintiffs” has led to a variety of approaches across the country. Id.; see Richards v. Eli Lilly & Co., 149 F.4th 901, 906 (7th Cir. 2025), cert. denied, No. 25-476, 2026 WL 79908 (U.S. Jan. 12, 2026) (“With minimal guidance from Congress or the Court, district courts have largely been left to devise their own standards for facilitating notice to similarly situated employees.”). “With some variations, district courts generally look to one of two general approaches.” Swales, 985 F.3d at 436. The first approach initially described in Lusardi v. Xerox Corp., 118 F.R.D. 351 (D. N.J. 1987), “has many variations” but “generally divides the management of a collective action into two steps.” Richards, 149 F.4th at 906; 1 McLaughlin on Class Actions § 2:16 (22nd ed. 2025) (“Most courts have adopted a two-step approach to ‘certification’ determinations under Section 216(b): (1) the ‘notice’ stage and (2) the ‘decertification’ stage.”) (collecting cases).1 In the first stage of the Lusardi approach, “a district court may facilitate notice of an FLSA suit to other employees upon a ‘modest factual showing’ that they are ‘similarly situated’ to the original plaintiffs.” Clark, 68 F.4th at 1008 (quoting Pritchard v. Dent Wizard Int’l Corp., 210 F.R.D. 591, 596 (S.D. Ohio 2002)). Courts use a “fairly lenient standard” at this preliminary stage, considering “minimal evidence,” which “typically results in ‘conditional certification’ of a representative class.” 1 McLaughlin on Class Actions § 2:16 (quoting Moss v. Crawford & Co., 201 F.R.D. 398, (W.D. Pa. 2000)).2 “Step two occurs once The less common approach stems from Shushan v. University of Colorado at Boulder, 132 F.R.D. 263 (D. Colo. 1990) and requires a showing that the plaintiffs satisfy the requirements of Federal Rule of Civil Procedure 23. Shushan, 132 F.R.D. at 268.

In recent years, circuit courts have called the Lusardi approach into question and have fastened different approaches to the notice process. In 2021, the Fifth Circuit rejected Lusardi, citing that Lusardi’s framework “frustrates, rather than facilitates, the notice process” and that “Lusardi has no anchor in the FLSA’s text or in Supreme Court precedent interpreting it.” Swales, 985 F.3d at 434, 439. The Fifth Circuit thereby held “a district court should identify, at the outset of the case, what facts and legal considerations will be material to determining whether a group of ‘employees’ is ‘similarly situated.’ And then it should authorize preliminary discovery accordingly.” Id. at 441.

Two years later, the Sixth Circuit rejected “Lusardi’s characterization of the notice determination as a ‘certification,’ conditional or otherwise.” See Clark v. A&L Homecare & Training Ctr., LLC, 68 F.4th 1003, 1009 (6th Cir. 2023). The Sixth Circuit instead analogized “[a] district court’s determination to facilitate notice in an FLSA suit . . . to a court’s decision whether to grant a preliminary injunction.” Id. at 1010. The court adopted “part of the preliminary- injunction standard” and held that “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

Lastly, while not expressly rejecting Lusardi, the Seventh Circuit held that “to secure notice, a plaintiff must first make a threshold showing that there is a material factual dispute as to whether the proposed collective is similarly situated.” Richards, 149 F.4th at 913. This approach attempts to avoid a “solicitation of claims” by requiring parties to meet a higher evidentiary standard while maintaining the FLSA’s “remedial goals.” Id. at 913–15 (quoting Hoffman-La Roche, 493 U.S. at 174). The Seventh Circuit’s somewhat muddled and complicated approach is outlined as follows: [A] plaintiff must produce some evidence suggesting that they and the members of the proposed collective are victims of a common unlawful employment practice or policy. A plaintiff’s evidence of similarly need not be definitive, but defendants must be permitted to submit rebuttal evidence and, in assessing whether a material dispute exists, courts must consider the extent to which plaintiffs engage with opposing evidence . . . Once the district court is satisfied that there is at least a material dispute, the decision to issue notice will depend on its assessment of the factual dispute before it . . . If the district court is persuaded that the evidence necessary to resolve a similarity dispute is likely in the hands of yet-to-be-noticed plaintiffs, it may proceed with a two-step approach—that is, it may issue notice to the proposed collective while postponing the final determination as to whether plaintiffs are similarly situated until plaintiffs move for certification after opt-in and discovery are complete.

Id. at 913.

The Fourth Circuit has remained silent on “the details of [the trial court’s] exercise” of notice to “potential plaintiffs.” Hoffman-La Roche, 493 U.S. at 170; see Johnson v. PHP of NC, Inc., No. 5:23-CV-00462-M, 2024 WL 2290590, at *3 (E.D.N.C. May 21, 2024) (“[N]either the Supreme Court nor the Fourth Circuit have addressed the process required for certification of a collective action under the FLSA.”). However, “whether by independent deliberation or by ‘anchoring bias,’” Clark, 68 F.4th 1003 at 1008, district courts within the Fourth Circuit have consistently applied the Lusardi approach. See, e.g., Kneppar v. Elevance Health Cos., Inc., No. CV MJM-23-863, 2024 WL 1156406, at *3 (D. Md. Mar. 18, 2024). “But practice is not necessarily precedent.” Swales, 985 F.3d at 440.

As one district court in the Fourth Circuit has recognized, “the Fifth Circuit’s approach is the better one.” Mathews v. USA Today Sports Media Grp., LLC, No. 1:22-CV-1407, 2023 WL 3676795, at *3 (E.D. Va. Apr. 14, 2023). In Matthews, the court focused on the text of 29 U.S.C. § 216(b) and acknowledged that the “FLSA says nothing at all about ‘conditional certification’” and “does not authorize courts sending notice to those who are not ‘similarly situated.’” Id. The court denied the plaintiff’s motion to conditionally certify a collective and ordered the parties to conduct discovery “limited to the facts material to determining whether a group of individuals is similarly situated under 29 U.S.C. § 216(b).” Id. at *4.

The district court’s “job is to interpret and apply the law, not to make it.” Benitez v. Charlotte-Mecklenburg Hosp. Auth., 992 F.3d 229, 237 (4th Cir. 2021). This Court begins with the text of § 216(b), which states as follows: An action to recover the liability . . . may be maintained against any employer (including a public agency) in any Federal or State court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated. No employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought. 29 U.S.C. § 216(b). Notably, the words “conditional certification” are nowhere in the text of 29 U.S.C. § 216(b), and those words have never appeared in the statute. From 1938 to date, Congress has not shed light on the FLSA’s “similarly situated” provision. Halle, 842 F.3d at 223 (“Congress has provided no framework setting forth how and when it is to be determined whether employees are “similarly situated.”). When first enacted in 1938, the statute twice contained the words “similarly situated.”3 In 1947, this language was amended, and Congress removed one reference to “similarly situated.”4 Congress has not amended the “similarly situated” language since, despite passing other amendments to the statute.5 However, while Congress has offered little guidance as to the interpretation § 216(b), Lusardi’s two-step “certification” process is clearly not contained within text of the statute.6 Collective actions provide employees with “the advantages of pooling resources and lowering individual costs so that those with relatively small claims may pursue relief where individual litigation might otherwise be cost-prohibitive.” Halle, 842 F.3d at 223. However, “collective actions also pose dangers.” Swales, 985 F.3d at 435. These dangers include “the opportunity for abuse (by intensifying settlement pressure no matter how meritorious the action)”

Absent guidance from Congress, the Supreme Court, or the Fourth Circuit,7 this Court joins the Matthews court in “hopefully providing a workable, gatekeeping framework for assessing, at the outset of litigation, before notice is sent to potential opt-ins, whether putative plaintiffs are similarly situated—not abstractly but actually.” Swales, 985 F.3d at 433. With that, the Court denies without prejudice Plaintiff’s Motion for Conditional Certification and to Provide Notice Pursuant to 29 U.S.C. § 216(b). (Doc. No. 25). To allow the parties to develop the necessary evidence for the Court to determine whether there is a collective of similarly situated employees entitled to notice, the Court hereby ORDERS the parties to engage in the limited discovery plan as outlined below. Plaintiff may subsequently file a motion for collective designation after the close of limited discovery.

III. CONCLUSION IT IS, THEREFORE, ORDERED that: 1. Plaintiff’s Motion for Conditional Certification and to Provide Notice Pursuant to 29 U.S.C. § 216(b) (Doc. No. 25) is DENIED WITHOUT PREJUDICE; and 2. The Court ORDERS the following limited discovery plan: a. Limited discovery shall begin immediately upon the entry of this Order and shall be completed by June 23, 2026; b. Discovery shall be limited to the facts material to determining whether putative collective members are similarly situated to Plaintiff pursuant to 29 U.S.C. § 216(b); c. Plaintiff may serve a total of an additional 10 interrogatories, 10 requests for production, and 10 requests for admission on Defendant; d. Defendant may serve a total of an additional 10 interrogatories, 10 requests for production, and 10 requests for admission on each Plaintiff; e. A subpart of an interrogatory or request for admission shall count towards the limit. f. Each party may take 5 additional depositions; g. Defendant shall produce payroll and timekeeping records (including timecard reports, pay summaries, and payroll reports) for the 60 individuals for whom contact information has already been provided; and h. Plaintiff may file a motion for collective designation within thirty (30) days of the close of the limited discovery period. Page limits, fonts, spacing, and time frames for the filing of responses and for replies shall be in accordance with Local Civil Rule 7.1, except that Plaintiff’s reply, if any, shall be limited to 10 pages.

Signed: March 25, 2026 SO ORDERED. Led) Matthew E. Orso United States District Judge ey