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.
SOUTHWOOD REALTY COMPANY,
Defendant.
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MEMORANDUM AND ORDER
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
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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).
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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
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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
1 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.
2 “[S]ome courts have applied a more rigorous intermediate standard where the parties have
completed some discovery or substantially completed discovery on class certification issues.”
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opt-in and discovery are complete, at which point the defendant typically moves to challenge
whether the collective is similarly situated.” Richards, 149 F.4th at 907. At this second stage,
“district courts on a motion for decertification will undertake a more searching analysis, consulting
three second-stage factors to determine whether opt-in plaintiffs are similarly situated.” 1
McLaughlin on Class Actions § 2:16 (collecting cases).
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
1 McLaughlin on Class Actions § 2:16. This has been called the “modest-plus” or “‘intermediate’
standard.” Richards, 149 F.4th at 907 (quoting Hawkins v. Alorica, Inc., 287 F.R.D. 431, 439 (S.D.
Ind. 2012); O’Neil v. Bloomin’ Brands Inc., 707 F. Supp. 3d 768, 776 (N.D. Ill. 2023))
(“Occasionally, if significant discovery has already taken place, courts will impose a higher level
of scrutiny—referred to as a ‘modest-plus’ or ‘intermediate’ standard—before issuing notice.”).
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situated to the plaintiffs themselves.” Id. at 1011 (citing Memphis A. Philip Randolph Inst. v.
Hargett, 2 F.4th 548, 554 (6th Cir. 2021)).
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
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‘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
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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)”
3 See Fair Labor Standards Act of 1938, ch 676, § 16(b), 52 Stat. 1060, 1069 (“Action to recover
such liability may be maintained in any court of competent jurisdiction by any one or more
employees for and in behalf of himself or themselves and other employees similarly situated, or
such employee or employees may designate an agent or representative to maintain such action for
and in behalf of all employees similarly situated.”).
4 See Portal-to-Portal Act of 1947, ch 52, Part IV, § 5(a), 61 Stat. 84, 87 (“The second sentence of
section 16(b) . . . is amended to read as follows: ‘Action to recover such liability may be maintained
in any court of competent jurisdiction by any one or more employees for and in behalf of himself
or themselves and other employees similarly situated.’”).
5 See Fair Labor Standards Amendments of 1961, Pub. L. No. 87-30, § 12(a), 75 Stat. 65, 74; Fair
Labor Standards Amendments of 1974, Pub. L. No. 93-259, §§ 6(d)(1), 25(c), 26, 88 Stat. 55, 61,
72, 73; Fair Labor Standards Amendments of 1977, Pub. L. No. 95-151, § 10, 91 Stat. 1245, 1252;
Consolidated Appropriations Act, 2018, Pub. L. No. 115-141, Div. S, Title XII, 132 Stat. 348,
1148–49; Consolidated Appropriations Act, 2023, Pub. L. No. 117-328, Div. KK, § 102(b)(2), 136
Stat. 4459, 6096.
6 The Sixth Circuit’s adoption of “part of the preliminary-injunction standard,” Clark, 68 F.4th at
1011, and the Seventh Circuit’s malleable “material dispute” assessment process, Richards, 149
F.4th at 913–15, both do some work to determine whether putative plaintiffs are similarly situated
in advance of providing notice. However, they too go beyond § 216(b)’s simple statement allowing
“similarly situated” employees to join as parties to an FLSA action.
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and “the appearance of court-endorsed solicitation of claims” as admonished by the Supreme Court
in Hoffmann-La Roche. Swales, 985 F.3d at 435; Hoffmann-La Roche, 493 U.S. at 174 (“Court
intervention in the notice process for case management purposes is distinguishable in form and
function from the solicitation of claims.”). By identifying “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 “authoriz[ing] preliminary discovery accordingly,” Swales, 985 F.3d at 441, this
Court serves the text of 29 U.S.C. § 216(b) and does not run afoul of the Supreme Court’s mandate
for courts to scrupulously “respect judicial neutrality.” Hoffmann-La Roche, 493 U.S. at 174.
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.
7 The Fourth Circuit has previously denied review on this issue. See Thomas v. Maximus, Inc., No.
3:21cv498, 2022 WL 1482010, at *9 (E.D. Va. May 10, 2022) (certifying an interlocutory appeal
on the following question: “What legal standard should courts apply when deciding whether to
certify a collective action under the Fair Labor Standards Act, 29 U.S.C. § 216(b)?”) and Order,
Maximus, Inc. v. Thomas, No. 22-00185 (4th Cir. May 20, 2022), (Doc. No. 17) (denying petition
for permission to appeal).
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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
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Local Civil Rule 7.1, except that Plaintiff’s reply, if any, shall be limited to 10
pages.
SO ORDERED.
Signed: March 25, 2026
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