December 21, 2014
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What are the Strategic Implications of the U.S. Supreme Court’s Decision in Genesis Healthcare v. Symczyk?
A nurse's Fair Labor Standards Act (FLSA) collective action against her employer was properly dismissed after the employer's offer of full relief for her individual claims rendered the case moot. That was the ruling of the US Supreme Court yesterday (April 16, 2013) in Genesis Healthcare Corp. v. Symczyk.
Laura Symczyk sued Genesis, her employer, under the FLSA purportedly on behalf of herself and a group of “similarly situated” putative, unnamed claimants. Genesis made her a Rule 68 offer of judgment of $7,500. It was undisputed that the offer covered all of her individual monetary claims. Symczyk ignored the offer. After finding that no other individuals had joined her suit, the District Court ruled that Symczyk’s claim had been rendered moot by the Rule 68 offer, and dismissed the case for lack of subject matter jurisdiction. The Third Circuit Court of Appeals reversed, holding that although her individual claim may be moot, her collective action was not.
Justice Clarence Thomas, writing for the 5-4 majority, reversed the Third Circuit. “In the absence of any claimant’s opting in [to the FLSA collective action], respondent’s suit became moot when her individual claim became moot, because she lacked any personal interest in representing others in this action.” The majority found that once the individual class representative’s claim is satisfied, the FLSA does not authorize an employee to continue a collective action solely on behalf of “other employees similarly situated,” when those other employees have not joined the case. Thus, the presence of collective action allegations in the complaint, without more, could not prevent a finding of mootness. The fact that Symczyk had not accepted Genesis’ offer was irrelevant because both the District Court and the Third Circuit had deemed Symczyk's individual claim moot.
In a strongly worded dissent, Justice Elena Kagan argued that an “unaccepted settlement offer … is a legal nullity”, and that the Court’s Opinion would have no application in future cases as it rested on a “bogus premise” and “serve[d] only to address a make-believe problem.”
While some employers hailed the decision as providing another strategic option to defeat the ever-growing tide of FLSA collective actions being filed against them, members of the plaintiffs’ bar take the position that the holding in this case will forever be limited to its rather unique set of facts. Only time will tell which side is right.