An Offer of Judgment Should Not Moot a FLSA Collective Action

The United States Supreme Court granted certiorari of a decision by the Third Circuit Court of Appeals, Symczyk v. Genesis HealthCare Corp., 656 F.3d 189 (3d Cir. 2011) [an enhanced version of this opinion is available to lexis.com subscribers]. The Third Circuit in Symczyk held that a collective action brought under the FLSA is not rendered moot when the defendant makes a Rule 68 Offer of Judgment in full satisfaction of the individual claim before the class representative moves for conditional certification and before any other plaintiff opts into the action.

In Symczyk the Rule 68 offer was made before the plaintiff moved for conditional certification of the collective action. The defendant then moved to dismiss arguing that the Rule 68 Offer of Judgment had rendered the plaintiff's claim moot, and the District Court agreed with the defendant and granted the motion to dismiss.

The Third Circuit reversed the District Court expressing concern that such settlements could allow employers to "pick off"  plaintiffs. The Third Circuit reasoned that: "When Rule 68 morphs into a tool for strategic curtailment of representative action, it facilitates an outcome antithetical to the purpose behind Section 216(b).

The Supreme Court granted Genesis' petition for certiorari and stated the question presented as "Whether a case becomes moot, and thus beyond the judicial power of Article III, when the lone plaintiff receives an offer from the defendants to satisfy all of the plaintiff's claims."

Collective actions are vital and necessary to encourage compliance with the FLSA by raising the stakes for employers who break the law. If the Supreme Court reverses the Third Circuit and allows defendants to "pick off" plaintiffs it will make it very difficult to prosecute FLSA collection actions and allow employers engaging in "wage theft to avoid the full measure of the consequences of their actions" (quoting, Brief of Amici Curiae The National Employment Lawyers Association, et al., in Support of Respondent).

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Abbey Spanier Rodd & Abrams, LLP, located in New York City, is a well-recognized national class action and complex litigation law firm.