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SCOTUS Rules Employers May “Pick-Off” FLSA Plaintiffs

Posted on: April 18th, 2013

By: Anthony Del Rio

The U.S. Supreme Court has issued its opinion on a case regarding whether an employer may “pick-off” the named plaintiff in a Fair Labor Standards Act (“FLSA”) collective action. The Court ruled 5-4 in favor of the employer, which means that employers may be able to use a Rule 68 offer of judgment to short-circuit FLSA collective actions in the future.

The case, Genesis HealthCare Corp. v. Symczyk, involved an employee that filed a FLSA wage and hour claim intended to be a collective action. The defendant made a Rule 68 offer of judgment that would have given the plaintiff everything she could possibly have obtained through the lawsuit (all alleged damages and attorneys’ fees), effectively mooting her claim before any other employees joined the collective action. The plaintiff did not accept the offer before the prescribed deadline, and the defendant moved to dismiss. The district court dismissed the case, because it was moot as to the only plaintiff. However, the Third Circuit Court of Appeals, while acknowledging the individual’s claim was moot, was persuaded by the plaintiff’s argument that it was a litigation tactic to “pick-off” the lead plaintiff and reversed the district court’s ruling.

The Supreme Court sided with the district court. The holding now provides solid ground for employers to attempt to moot collective actions before they start. However, the majority did not hold that an unaccepted Rule 68 offers will always moot a plaintiff’s FLSA claims, because that issue had not been appealed. Unfortunately, there is conflicting case law regarding whether an FLSA claim is mooted by an unaccepted offer of judgment. Nonetheless, the Supreme Court has provided employers with what may be a very useful tool in defeating FLSA collective actions.

The opinion is available here:  http://www.supremecourt.gov/opinions/12pdf/11-1059_5ifl.pdf

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