October 21, 2025|Franchise Frontlines
October 21, 2025 | U.S. District Court for the Western District of Missouri | Unpublished Opinion
Executive Summary
In an unpublished decision, Chief Judge Beth Phillips granted conditional certification in an FLSA misclassification case brought by temporary healthcare workers against Americare Systems, Inc., a management company providing centralized services to more than eighty skilled nursing and assisted living facilities. The plaintiffs, who obtained shifts through the ShiftKey platform, alleged they were misclassified as independent contractors and sought notice to other temporary workers who filled shifts at Americare-managed facilities. Americare opposed certification, arguing that it was not the employer of these workers and had no role in compensating or supervising them. The court held that under the lenient standard applicable at the notice stage, plaintiffs made a sufficient factual showing to permit notice, while making clear that it was not deciding whether Americare was in fact an employer. The court denied approval of plaintiffs’ proposed notice due to language implying employer status and directed the parties to submit a revised notice.
Relevant Background
Americare Systems is a management company that contracts with numerous facility-level LLCs across at least four states. Each facility is a separate legal entity owned by a corporation distinct from Americare, but Americare provides centralized administrative and operational support through individual Management Agreements. According to the testimony of Americare’s President and COO, the Facilities rely on Americare for services including human resources support, timekeeping systems, payroll processing arrangements, employee handbooks, and patient-admission procedures. Facility employees also participate in benefit programs that Americare coordinates.
To help facilities fill temporary shifts, Americare executed a Client Services Agreement with ShiftKey, a platform that allows healthcare facilities to post open shifts and permits licensed healthcare workers to “bid” on the pay rate for those shifts. Plaintiffs signed Terms of Service with ShiftKey, enabling them to bid on shifts at Americare-managed facilities. They later worked shifts at various facilities in Missouri and Kansas. They allege they were misclassified as independent contractors and were not paid for all hours worked nor properly paid overtime. They did not sue the facility entities where they worked; instead, they sued Americare alone, claiming that Americare set or influenced pay practices across all locations to which it provided management services.
Americare opposed conditional certification, arguing that the court should reject the traditional lenient standard and adopt stricter tests used in recent appellate decisions. Americare also asserted that plaintiffs had not shown the workers were similarly situated or that Americare controlled their employment. Plaintiffs submitted deposition testimony and documents reflecting centralized policies across all facilities and evidence that Americare held authority under the ShiftKey agreement to post shifts and establish wage parameters.
Decision
The court began by reaffirming that the Eighth Circuit has not adopted the more demanding conditional certification standards announced by the Fifth and Sixth Circuits. Because Americare did not argue for a specific heightened test or apply one to the facts, the court followed the long-established two-step procedure, under which plaintiffs must show only a “colorable basis” to believe that similarly situated individuals exist and may wish to join the lawsuit.
Applying that standard, Judge Phillips held that plaintiffs presented sufficient evidence to justify notice. First, the court found a plausible basis to conclude that determining whether workers were independent contractors or employees would not require individualized inquiries. Though the putative collective includes workers with various healthcare credentials, the court reasoned that all belonged to the same category of medical professionals performing shift-based patient care work and that such variations would not preclude collective consideration of the “economic realities” of their relationship to Americare.
Second, the court found evidence supporting plaintiffs’ assertion that Americare’s policies were applied uniformly across facilities. Plaintiffs offered testimony showing that Americare created or influenced the employee handbook, timekeeping rules, payroll processing, facility admission procedures, and other operational systems used by all facilities. The court emphasized that some evidence suggested these were not merely optional services; a factfinder could conclude that Americare and the facility entities worked “in tandem” to implement these policies. While the ultimate weight of that evidence would be evaluated later, the court concluded that plaintiffs met the minimal requirement for issuance of notice.
Third, the court held that plaintiffs presented a colorable basis to believe Americare could qualify as an employer under the FLSA. Although Americare argued it neither supervised the workers nor determined their compensation, the court found that plaintiffs had identified evidence of potential authority over key aspects of shift procurement. Specifically, the Client Services Agreement with ShiftKey granted Americare the same rights as the facilities, including the ability to post shifts and establish certain parameters. Judge Phillips noted that several appellate courts have held that potential authority—rather than active exercise of control—may be relevant to whether an entity is an employer, though she took no position on whether Americare ultimately met that standard. The court was careful to reiterate that it was not making any factual findings about Americare’s employer status or whether the plaintiffs had been properly classified.
Finally, the court declined to approve plaintiffs’ proposed notice after identifying multiple statements that implied the court had concluded Americare was the employer of the workers. The notice also suggested that the only avenue for relief was to join the lawsuit against Americare, without mentioning other potential defendants such as the facility-level LLCs. The court required plaintiffs to submit a revised notice and disclose the identity of the notice administrator.
Looking Forward
This decision illustrates how courts continue to apply a highly permissive standard at the earliest stage of FLSA collective actions, permitting notice based on a modest factual showing even when the defendant disputes employer status. For franchisors and multi-entity brands, the case serves as a reminder that centralized operational support, shared administrative systems, or common policies may be cited by plaintiffs as evidence of employer control, even if those policies ultimately fall short of establishing an employment relationship. Conditional certification does not resolve the merits, but it may significantly expand the scope of discovery, making early documentation of corporate separateness and franchisee autonomy crucial.
The ruling also underscores the importance of ensuring that handbooks, training materials, and system-wide communications clearly reflect the independence of individual operators. Phrases implying that all personnel belong to a single “team,” without clarifying corporate distinctions, may become focal points in joint-employer allegations. Similarly, contractual relationships with third-party labor platforms can be scrutinized for potential authority over worker pay or scheduling. Maintaining precise boundaries around who controls compensation, work assignments, and supervision remains essential to reducing litigation risk.
Finally, the court’s rejection of plaintiffs’ proposed notice demonstrates that misleading language suggesting employer status will not be tolerated. This aspect of the opinion reinforces a protective principle for franchisors and other multi-location systems: courts are vigilant in preventing notices from implying that parent entities or management companies have already been deemed employers. As this case moves forward, the substantive question of whether Americare qualifies as an employer under the FLSA will be decided under a more demanding standard, and the defendant’s factual defenses remain intact.
This article is based solely on the opinion of the Court in this matter. The author has not conducted any independent investigation into the facts. For the avoidance of doubt, each statement related to the law and facts in this article is drawn from the Court’s opinion in this case.
Thomas O’Connell is a Shareholder at Buchalter APC and Chair of the firm’s Franchise Practice Group. For questions about this article or media inquiries, you can contact Tom at toconnell@buchalter.com.
This communication is not intended to create, and does not create, an attorney-client relationship or any other legal relationship. No statement herein constitutes legal advice, nor should it be relied upon or interpreted as such. This communication is for general informational purposes only and is not a substitute for legal counsel. Readers should not act or refrain from acting based on any information provided without seeking appropriate legal advice specific to their situation. For more information, visit www.buchalter.com.
