Supreme Court Reverses Third Circuit Decision Precluding Early Use Of Offer Of Judgment To Defeat An FLSA Collective Action

more+
less-

This post was contributed by Adam R. Long, Esq., a Member in McNees Wallace & Nurick LLC's Labor and Employment Practice Group.

In 2011, the Third Circuit held that a pre-certification offer of judgment made by a defendant-employer to an individual plaintiff would not require dismissal of the plaintiff's entire FLSA collective action, even if the offer of judgment would fully satisfy the plaintiff's own individual claims. (Third Circuit opinion available here.) Before this decision, employers increasingly had used offers of judgment made pursuant to Rule 68 of the Federal Rules of Civil Procedure to "pick off" individual plaintiffs and defeat FLSA collective actions early in the litigation before they could be certified. The Third Circuit held that even though an offer of complete relief could moot the plaintiff's individual claims (regardless of whether the offer was accepted), it would not defeat the broader FLSA collective action.

In June 2012, the Supreme Court agreed to review the Third Circuit's decision on this issue. In Genesis Healthcare Corp. v. Symczyk, a 5-4 decision announced earlier this week, the Supreme Court reversed the Third Circuit's decision and held that if the individual plaintiff's own claims were made moot by an offer of judgment prior to certification of the FLSA collective action, the broader FLSA collective action must be dismissed. (Supreme Court opinion available here.) Justice Thomas, writing for the majority, noted that both the District Court and Third Circuit found that the defendant-employer's unaccepted offer of full remedy made pursuant to Rule 68 had mooted the sole plaintiff's individual FLSA claims. Justice Thomas explained that because Symczyk, the plaintiff, had not challenged this finding in a timely manner, the question of whether an unaccepted offer of complete relief mooted Symczyk's individual claims was not properly before the Court. The Court simply accepted the Third Circuit's position on this issue and assumed that the Rule 68 offer mooted Symczyk's own claims. Based on this unchallenged assumption, the Court held that the FLSA collective action must be dismissed because the only plaintiff's individual claims were moot.

In her dissent, Justice Kagan maintained that the majority decision had no effect beyond the specific case at issue, because she believed that the Third Circuit's underlying decision on the mootness of Symczyk's individual claims was clearly erroneous. In the view of Justice Kagan, the assumption on which the majority decision was built (i.e., an unaccepted offer of complete relief mooted the plaintiff's individual claims) was faulty, making the Court's holding meaningless.

Unfortunately, the Supreme Court's decision in Genesis did not provide litigants with a definitive answer on the viability of the Rule 68 "pick off the plaintiff" strategy in FLSA collective actions. While the majority expressly held that the strategy can defeat a pre-certification collective action if the individual plaintiff's claims truly were made moot, it did not address the underlying question of whether an unaccepted offer of complete relief actually would moot the individual plaintiff's own claims. Justice Kagan and the three other dissenting Justices believe that such an offer would not moot the individual claims. While the Genesis decision breathes new life into the Rule 68 offer strategy for defendant-employers, the individual claims/mootness issue seemingly will continue the uncertainty for courts and litigants in FLSA collective actions.

Topics:  Collective Actions, FLSA, Mootness, SCOTUS, Settlement, Wages

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.

© McNees Wallace & Nurick LLC | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »