Supreme Court Issues Opinion Which May Help Employers Defeat FLSA Collective Action Lawsuits

 
Wednesday, April 24, 2013
 
The Supreme Court recently issued an opinion in Genesis Healthcare Corp. v. Symczyk,U.S. No. 11-1059 (April 16, 2013). Laura Symczyk, the plaintiff, alleged that Genesis HealthCare Corporation violated the Fair Labor Standards Act by automatically deducting break time from her and other employees’ pay, regardless of whether they performed compensable work during their breaks. Before any other plaintiffs joined the suit, Genesis made an offer of judgment for full relief of plaintiff's claims. Symczyk did not accept the offer.  The district court dismissed the case because the offer of judgment left Symczyk without a personal stake in the litigation. Symczyk argued that she continued to have a personal stake and that the interests of plaintiffs yet to join the action created jurisdiction. Genesis argued that a complete offer to satisfy a lone plaintiff’s claim renders the case moot.

The issue in this case was whether a collective action brought under section 216(b) of the Fair Labor Standards Act (FLSA) becomes moot when the only plaintiff receives a complete offer of judgment from the defendant under Federal Rule of Civil Procedure 68 before other plaintiffs have joined the case.  

The Supreme Court held that when an employer's offer of judgment pursuant to Rule 68 fully satisfies the named plaintiff's FLSA claims, and no other plaintiffs have joined the action, the claim becomes moot.  The court must dismiss the lawsuit for lack of subject matter jurisdiction.  

The ability to make an offer of judgment to the named plaintiffs for the purpose of defeating a class action before it can grow is a powerful tool for employers.  
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