Seventh Circuit Decision Sets Forth New FLSA Certification Standard

In its August 2025 decision in Richards v. Eli Lilly & Co. et al., the U.S. Court of Appeals for the Seventh Circuit has fundamentally altered how federal courts manage actions under the Fair Labor Standards Act (FLSA). The ruling governs courts within the Seventh Circuit, including courts in Illinois, Indiana, and Wisconsin. Increased rigor in the FLSA certification standard may save employers substantial litigation costs and reduce settlements.

The FLSA allows employees to pursue claims individually, but also on behalf of "similarly situated" individuals through collective actions. Unlike routine class actions, FLSA collective actions require similarly situated plaintiffs to affirmatively "opt in" to the suit.