In In re: Chipotle Mexican Grill, Inc., Case No. 17-1028 (10th Cir. March 27, 2017), the Tenth Circuit Court of Appeals reiterated its holding in Theissen v. GE Capital Corp., 267 F.3d 1055 (10th Cir. 2001), that a district court may utilize a variety of approaches to identify similarly situated workers for purposes of authorizing facilitated notice in FLSA collective actions.

The Tenth Circuit reaffirmed its position when denying Chipotle’s petition for a writ of mandamus. There, the district court issued an order in Turner v. Chipotle Mexican Grill, Inc., 123 F. Supp. 3d 1300 (D. Colo. 2015), authorizing notice in a collective action resulting in 10,000 opt-in plaintiffs.  As part of its petition, Chipotle sought a writ of mandamus to dismiss the district court’s joinder of 10,000 opt-in plaintiffs, or, in the alternative, to remand to permit discovery to ascertain if the opt-ins are similarly situated and to provide an opportunity to file a motion to decertify the collective action.  The Tenth Circuit rejected Chipotle’s application because the district court’s order was “not such a gross abuse of discretion” to warrant mandamus relief.

That the Tenth Circuit denied mandamus relief is unremarkable based on factors presented. Of significance, however, is the court’s discussion and acknowledgment that Theissen’s three approaches (the ad hoc approach; Rule 23 approach; and spurious approach under pre-1966 Rule 23 amendments) remain available to district courts to use to determine who is similarly situated under FLSA Section 216(b) for purposes of facilitated notice.

In Turner, plaintiffs allege that Chipotle’s company-wide automated computer timekeeping system “arbitrarily cuts off the time clock at half past midnight,” allegedly resulting in some shift-closing hourly employees working off-the-clock without being compensated.

The district court analyzed “the proper procedural mechanism for pursuing a representative action ‘on behalf’ of employees similarly situated.” 123 F.Supp. 3d at 1305.  The court rejected so much of plaintiffs’ motion insofar it was characterized as one for conditional certification under a lenient standard of “substantial allegations” that the plaintiff and those similarly situated were victims of “a single decision, policy or plan.”  It also rejected Chipotle’s request for a stricter standard of review of plaintiffs’ motion for facilitated notice, as plaintiffs had discovery, and that certification should be limited to stores where there is “substantial evidence” of a common decision, policy or plan. Id.

The district court proceeded to identify the proper standard to authorize notice of collective action. It specifically rejected the two-step ad hoc conditional certification rubric as well as the Rule 23 approach to facilitate notice of the collective action because such approaches conflate the Rule 23 class certification standard with Section 216(b)’s permissive joinder standard.  Rather, it found that Section 216(b) collective action may be analogized under the spurious class action approach (old Rule 23(a)(3)), as both were “‘aggregated damages claims for only those who opted in and both were joinder liberalizations.’” Id. at 1306 (citation omitted).  It concluded that the proper approach in deciding a motion to facilitate notice “is to presumptively allow workers bringing the same statutory claim against the same employer to join as a collective, with the understanding that individuals may be challenged and severed from the collective if the basis for their joinder proves erroneous” (emphasis supplied).  The court placed the burden on Chipotle to “winnow” the collective at some later point in the proceeding through F.R.Civ.P. Rules 21 (misjoinder) and Rule 42 (severance) procedures.

The Tenth Circuit found that the district court’s “presumptive” approach to facilitate notice, which it likened to the “spurious” approach, complies with Section 216(b). It noted that “under the spurious approach, courts incorporate into § 216(b) the pre-1966 requirements of Rule 23 based on Advisory Committee notes which are: (1) “the character of the right sought to be enforced … must be several,” (2) “there must be a common question of law or fact affecting the several rights,” and (3) “a common relief must be sought.”

The district court’s departure from the ad hoc/two-step approach is notable.  Under the ad hoc approach, the first step requires a named plaintiff to make a modest factual showing that the named plaintiff and potential opt-in plaintiffs are victims of a common decision, policy, or plan.  If shown, court-approved notice to potential collective action members will issue.  The second step, occurring after the completion of discovery, requires the district court, applying a more stringent standard of proof, to make factual findings whether the opt-in plaintiffs are in fact similarly situated to the named plaintiff.  The ad hoc approach is used by many district courts and has been acknowledged by a number of circuit courts, in addition to the Tenth Circuit, as an acceptable approach. See e.g. Zavala v. Wal Mart Stores Inc., 691 F.3d 527 (3d Cir. 2012); Myers v. Hertz Corp., 624 F.3d 537 (2d Cir. 2010).

The Tenth Circuit in In Re Chipotle repeated its position in Theissen, “that the two-step process is arguably the best of the three approaches we have experienced,” but, at the same time, noted that the differences between the approaches were minimal, as “[a]ll approaches allow for consideration of the same or similar factors.”  It deferred to the district court’s discretion whether to deny collective action treatment “for trial management reasons.” The Tenth Circuit rejected Chipotle’s argument that the ad hoc approach is mandated by Theissen.

Also, the Tenth Circuit rejected Chipotle’s argument that the spurious approach violates its due process rights because there is no threshold determination if the matter is suitable for collective action treatment and it places the burden on Chipotle to “winnow” the collective action thereafter. Acknowledging that the winnowing process may be burdensome, the circuit court observed that, at this stage of the litigation, Chipotle had not identified a basis relieving it from this task.

The Tenth Circuit concluded by opining that it made “no definitive determination of the merits of using the spurious approach as opposed to either of the others”, and noted that the district court’s approach “may be debatable”. Nevertheless, the Turner case proceeds as a collective action with 10,000 opt-in plaintiffs.


  1. Trial courts are given wide latitude in deciding how to identify and provide notice to similarly situated litigants of FLSA collective actions. In the Tenth Circuit, no one method is mandated under § 216(b).  Nevertheless, the Turner district court decision, if followed, may signal even larger collective actions.  The ad hoc or two step approach has enjoyed wide acceptance at the district court and, more important, acquiescence at the circuit level.  The standard of proof at the initial certification stage is low to meet its purpose “to determine whether ‘similarly situated’ plaintiffs do in fact exist.” Myers, 645 F.3d at 555 (emphasis in original).  Although the plaintiff’s initial burden is modest, “it is not non-existent.” Khan v. Airport Mgmt. Servs., LLC, No. 10-CV-7735, 2011 WL 5597371 at *5 (S.D.N.Y. Nov. 16, 2011).  The “modest factual showing” to support conditional certification at the first stage inquiry starts the winnowing process by determining “whether, ‘similarly situated’ plaintiffs do in fact exist.” Myers, 624 F.3d at 555 (citations omitted; emphasis in original).  Under the Turner district court decision, the winnowing process will start later through misjoinder and severance motion practice, possibly on an individualized basis.
  2. The Turner case highlights the risk associated with utilizing automated time and attendance tracking systems. The administrative efficiencies that such systems bring to the workplace can be offset by lawsuits alleging inaccurate recording of working time.  An automated timekeeping system may reduce administrative overhead and control payroll, but it may lead to incidents of off the clock work, when, for example, meals are not taken, but recorded as having occurred.  Or, as alleged in Turner, an employee working a closing shift cannot record time, because the automated timekeeping system is not operational after a certain hour.  Some employers have learned this lesson the hard way in auto-deduction class and collective actions, involving meal breaks, particularly where a monitoring system is not in place to verify that all hours worked are recorded.

Retail employers dismayed by employees publicly airing workplace grievances in disparaging social media posts must think twice before taking disciplinary action.  On August 18, 2016, the National Labor Relations Board (“NLRB”) confirmed the finding by Administrative Law Judge Susan A. Flynn that Chipotle’s social media policy forbidding employees from posting “incomplete” or “ inaccurate” information, or from making “disparaging, false, or misleading statements” on Twitter, Facebook and other social media sites violates Section 8(a)(1) of the National Relations Labor Act (“the Act”).

Chipotle discovered that an employee responded to a customer’s tweet thanking Chipotle for a free food offer, by tweeting back: “@ChipotleTweets, nothing is free, only cheap #labor. Crew members make only $8.50hr how much is that steak bowl really?”  Then, attaching a news article describing how hourly workers at Chipotle were required to work on snow days while certain high-level employees were not, the employee tweeted his displeasure, specifically referencing Chipotle’s Communications Director: “Snow day for ‘top performers’ Chris Arnold?”  Informed by his manager that Chipotle considered his tweets to be in violation of Chipotle’s social media policy, the employee removed them at Chipotle’s request.  Then, several weeks later, Chipotle fired the employee after he circulated a petition about employees not receiving required breaks.

Finding the provision in Chipotle’s policy prohibiting employees from spreading “incomplete” or “inaccurate” information to be unlawful, Judge Flynn opined that: “An employer may not prohibit employee postings that are merely false or misleading.  Rather, in order to lose the [NLRA]’s protection, more than a false or misleading statement by the employee is required; it must be shown that the employee had a malicious motive.”   Judge Flynn also found the policy provision prohibiting “disparaging” statements to be unlawful, explaining that it “could easily encompass statements protected by Section 7 [of the NLRA]” including “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”   Although Chipotle’s social media policy contained a disclaimer that the policy “does not restrict any activity that is protected by the National Relations Labor Act, whistleblower laws, or any other privacy rights,” Judge Flynn concluded that this “sentence does not serve to cure the unlawfulness of the foregoing provisions.”

The NLRB adopted Judge Flynn’s decision that Chipotle was wrong, not only for firing the employee, but for attempting to limit his commentary on social media by its unlawfully termed social media policy.  While agreeing with Judge Flynn’s reasons for finding the social media policy unlawful, the NLRB disagreed with Judge Flynn’s finding that Chipotle violated the NLRA by asking the employee to delete the tweets.  In particular, while Judge Flynn opined that the employee engaged in “concerted activity” even though he did not consult with other employees before posting his tweets because “concerted activities include individual activity where individual employees seek to initiate or to induce … group action,”  the NLRB disagreed, asserting, with no true explanation, that it did not find the employee’s conduct to be concerted.  Agreeing that Chipotle violated the NLRA by terminating the employee after he engaged in protected concerted activity by circulating a petition regarding the Company’s break policy, the NLRB required Chipotle to, among other things, post signs acknowledging that its social media policy was illegal, and to re-instate the employee with back pay.

The message from the NLRB to retail employers is that, barring malicious misstatements, speech concerning terms and conditions of employment is often protected activity, even for employees who want to criticize their employers on Twitter and other social media websites.  To avoid Chipotle’s fate, ensure that your social media policies are up to date and provide for the increasing protections afforded to employee social media activity by the NLRB.