The Supreme Court recently heard arguments in Genesis Healthcare v. Symczyk to decide whether a Fair Labor Standards Act (FLSA) collective action should have been dismissed because the named plaintiff's claim became moot.
Laura Symczyk was a registered nurse for Genesis. Two years after she began her job, Symczyk initiated a collective action under 29 U.S.C. § 216(b) on behalf of herself and all similarly situated individuals. The collective action alleged that Genesis violated the FLSA when they implemented a policy that subjected the pay of certain employees to an automatic meal break deduction whether or not the employee performed compensable work during his or her break.
While the case was pending in district court, Genesis served Symczyk with a Rule 68 offer of judgment. She did not respond. Thereafter the district court concluded that Genesis' offer of judgment mooted the collective action and dismissed the case. The 3rd Circuit reversed ruling that the potential for putative members of the as yet uncertified FLSA collective to join the case allowed it to stay alive, even though no other individual had actually opted in.
During oral argument, the high court's Justices initially seemed to focus on whether the named plaintiff's failure to accept the offer of judgment actually mooted her claims. This issue was not decided by the 3rd Circuit. The consensus seemed to be that the plaintiff's claims were not fully satisfied, and the fact that she walked away with nothing was not just a "housekeeping issue" as claimed by the defense.
Regarding the Rule 68 issue, the Justices noted:
1. Concern that "Rule 68 doesn't say anything about dismissing [the] suit" if a plaintiff rejects an offer for complete relief. Rather, by its plain language the rule merely allows for cost-shifting in the event that a plaintiff ultimately recovers less than the amount of the unaccepted offer.
2. The ramifications if a Rule 68 offer could be used to shortcut "the normal process of inviting opt-ins to occur" in FLSA cases.
While many hope that the high court will use this case to clarify the relationship between Rule 23 and § 216(b) and determine whether a putative collective action survives the mooting of the named plaintiff's claim, the Court may limit its ruling to a narrower issue of whether the district court properly found the named plaintiff's claim to be moot.
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