While the Ninth Circuit still hasn't defined "similarly situated" under the FLSA, California's federal courts continue to apply the two-stage process

United States Magistrate Judge Edward M. Chen (Northern District of California) granted plaintiff's motion to conditionally certify a collective action of Sales Representatives working for Defendant Vector Marketing Corporation.  Harris v. Vector Marketing Corp., 2010 WL 1998768 (N.D. Cal. May 18, 2010).  In doing so, Magistrate Judge Chen added his name to the long list of federal courts in California that have adopted a two-step approach for determining whether a class is “similarly situated.” Under this approach, a district court first determines, based on the submitted pleadings and, perhaps, a few declarations, whether the proposed class should be notified of the action.  At the first stage, the determination of whether the putative class members will be similarly situated is made using a "fairly lenient" standard, and typically results in "conditional certification" of a representative class. District courts have held that conditional certification requires only that “ ‘plaintiffs make substantial allegations that the putative class members were subject to a single illegal policy, plan or decision.’ ”

The second-step usually occurs after discovery is complete, at which time the defendants may move to decertify the class.  In the second step, the court makes a factual determination about whether the plaintiffs are similarly situated by weighing such factors as (1) the disparate factual and employment settings of the individual plaintiffs, (2) the various defenses available to the defendant which appeared to be individual to each plaintiff, and (3) fairness and procedural considerations. If the court determines that the plaintiffs are not similarly situated, the court may decertify the class and dismiss the opt-in plaintiffs' action without prejudice. Even when the parties settle, the court must make some final class certification finding before approving a collective action settlement.