In Genesis Healthcare Corp. v. Symczyk, a 5-4 decision authored by Justice Thomas and delivered on April 16, 2013, the U.S. Supreme Court held that if the lone lead plaintiff’s individual claim under the Fair Labor Standards Act (“FLSA”) becomes moot then the collective action must be dismissed because the lead plaintiff lacks a personal interest in representing putative, unnamed claimants.
In her collective action, Symczyk claimed that Genesis violated the FLSA by automatically deducting thirty (30) minutes from its employees’ shifts for meal breaks regardless of whether those employees performed compensable work while on their breaks. Prior to the plaintiff’s move for conditional certification of the putative FLSA class, Genesis answered and contemporaneously made an offer of judgment to plaintiff that included all of her allegedly unpaid wages plus reasonable attorneys’ fees, costs, and expenses determined by the court. If accepted, the offer would have fully satisfied all of Symczyk’s individual FLSA claims. Although the plaintiff did not accept the offer, she conceded in the courts below that the offer satisfied her FLSA claims in their entirety. While the district court dismissed both Symczyk’s individual claim and the collective action for mootness, the Third Circuit Court of Appeals reversed and ruled that permitting employers to “pick off” a lead plaintiff would generally frustrate the purpose of collective actions.
The Supreme Court assumed, without deciding, that Genesis’ offer of judgment mooted the plaintiff’s individual FLSA claims because she conceded as much and failed to properly raise any challenge to it. The Supreme Court then reversed the Third Circuit and held that, because Symczyk’s individual claim was moot, the case, including the collective action allegations in it, had to be dismissed since there were no other plaintiffs in the lawsuit. Further, the Court held that, unlike certifications under Federal Rule of Civil Procedure 23 where the putative class acquires its own legal status, the only consequence of conditional certification under the FLSA is that court-approved written notices are sent to potential plaintiffs who may later join the action. The majority, however, declined to answer the question that most practitioners were hoping the decision would provide—whether an employer can entirely foreclose an FLSA collective action lawsuit by making a full offer of judgment to the lead plaintiff(s).
Even though the issue of whether a complete, but unaccepted, offer of judgment moots a collective action remains unresolved, the Supreme Court’s opinion opens the door for employers to attempt quick resolutions with the lead plaintiff(s) for the purpose of disposing of the underlying collective action. Therefore, employers should proactively audit their wage and hour practices and consider a quick resolution under Federal Rule of Civil Procedure 68 at the start of a collective-action case. The Court’s decision may also cause FLSA plaintiffs to seek conditional certification much earlier in the life of the FLSA collective action in order to avoid their claims being rendered moot by an offer of judgment. Similarly, it may motivate FLSA plaintiffs to make additional FLSA claims and allegations in an attempt to inflate the amount of the offer of judgment that it would take to potentially moot them.
