Rule 68 Offer That Excludes Individual Claim Does Not Moot Putative FLSA Collective Action

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“The Last Inch Is The One That Counts”

The recent decision in Silva v. Tegrity Personnel Svcs., Inc., Case No. 4:13-cv-00860 (S.D. Tex. 12/5/2013), suggests that some district courts haven’t fully embraced the Supreme Court’s holding in Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523, 1528 (2013).

The plaintiff in Silva filed a proposed FLSA collective action alleging that the evil, stingy defendants unlawfully refused to pay overtime. In connection with this claim, the plaintiff filed her own consent along with the consent of another, similarly repressed opt-in plaintiff. The plaintiff also asserted an individual claim that she had been retaliated against by a vast, right-wing conspiracy in violation of the FLSA. (The vast, right-wing conspiracy allegation is apparent only if you carefully read between the lines of the decision… and then make up a bunch of stuff that isn’t there.)

Shortly after the filing of the complaint, the Supreme Court issued its decision in Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013). With a villainous laugh, the defendants rubbed their collective hands together and issued Rule 68 offers of judgment to both plaintiffs. The defendants’ Rule 68 offers would have compensated the plaintiffs for their allegedly unpaid overtime and provided for a reasonable award of costs and attorneys’ fees. The named plaintiff’s retaliation claim, however, was excluded from the offer.

Bravely and selflessly placing her coworkers (and counsel) above her own interests, the plaintiff refused to be coerced by the defendants’ prompt offer of full payment. She filed a motion for conditional certification and four additional opt-in consents a few weeks later. The defendant made Rule 68 offers to each of the additional plaintiffs, then moved to dismiss all plaintiffs’ overtime claims as moot.

In its analysis of the defendants’ motion, the district court noted that prior Fifth Circuit precedent allowed a conditional certification motion to relate back to the filing of the complaint. Thus, because other plaintiffs would be able to join the case after such certification, the district court observed that the Fifth Circuit’s “relation back” theory would avoid the mootness issue associated with the plaintiffs’ rejection of the defendants’ Rule 68 offers. The court wistfully remarked, “Were that the end of the story, this Court could [rule in plaintiffs’ favor].” (Slip Op. at 9).

Unfortunately, the district court noted, that pesky Supreme Court decision in Symczyk “did no favors to FLSA plaintiffs in the Fifth Circuit.” (Slip Op. at 12). According to the district court, “whereas [the Fifth Circuit] offered a life raft in the form of the relation-back doctrine to plaintiffs whose personal FLSA claims were mooted by Rule 68 offers, Symczyk effectively overruled that” precedent. (Id.). Thus, the district court bemoaned the fact that the current state of the law “would seem to require that this Court hold for defendants.” (Id.).

But, just when all seemed lost for our poor plaintiffs who had been offered payment for their claimed overtime without so much as having to participate in discovery, the district court found a ray of hope. While the court acknowledged that the plaintiffs’ overtime claims may have been mooted by the defendants’ Rule 68 offer, the original named plaintiff still had her retaliation claim dangling about. Defendants had excluded that individual claim from their Rule 68 offer. True, defendants had also advised the district court that the individual claim should be severed from the overtime portion of the case. But, the court was able to dismiss that little inconvenience simply by observing that, while it could sever the individual claim, it had not done so at that point in the case. Because the retaliation claim presented a live controversy and had not been severed from the case, the district court concluded that no portion of the case was moot and allowed it to proceed.

Most of you may have read those last few lines and thought, “Wait…what?” Congratulations, you’ve been paying attention!  (Those who did not have such a reaction either weren’t paying attention or, more likely, are plaintiffs’ lawyers spying on the opposition. We know you’re here.) In short, where a plaintiff asserts multiple counts in her complaint, the district court appears to have held that it has subject matter jurisdiction over all of the claims so long as subject matter jurisdiction is established in regard to one of them. To borrow from the luminary Huey Long (or, more precisely, Walter Matthau’s portrayal of him in JFK), “That dog don’t hunt.”

The Bottom Line: Despite the Supreme Court’s Symczyk holding, uncertainties continue in regard to Rule 68 offers in FLSA collective actions.

 

Topics:  Class Certification, Collective Actions, FLSA, Genesis Healthcare Corp. v. Symczyk, Mootness, Over-Time, Rule 68, Settlement

Published In: Civil Procedure Updates, Constitutional Law Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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