Legal Briefing: Collective-Action Claims Defeated by Employer Offer

Laura Symczyk filed a lawsuit against her employer, Genesis HealthCare Corp., alleging that Genesis violated the Fair Labor Standards Act by automatically deducting pay for a 30-minute lunch break even if the employee worked during that time.

Symczyk filed her lawsuit as a collective action seeking recovery on her behalf and on behalf of other employees. Genesis served on Symczyk a $7,500 offer of judgment under Rule 68, which would have paid her all the unpaid amounts that she claims were due to her, but Symczyk rejected the offer.

The U.S. District Court for the Eastern District of Pennsylvania decided that Symczyk’s rejection of an offer of full relief under the FLSA deprived the court of jurisdiction, and it dismissed Symczyk’s proposed FLSA collective action. On appeal, the 3rd Circuit Court of Appeals reversed, finding that Symczyk’s individual claim was found to be moot by the employer’s offer, but that dismissing a collective action because of the individual claim being moot would allow employers to avoid FLSA class claims before courts have a chance to consider whether a collective action is appropriate.

The U.S. Supreme Court agreed with the District Court and held that Symczyk’s individual claim was moot since she had rejected the employer’s offer, and therefore, she had no “personal interest in representing others in this action … the mere presence of collective action allegations in the complaint cannot save the suit from mootness once the individual claim is satisfied.”

The court further noted that “nothing in the nature of FLSA actions precludes satisfaction—and thus the mooting—of the individual’s claim before the collective action component of the suit has run its course.” Genesis HealthCare Corp. v. Symczyk, U.S. No. 11-1059 (April 16, 2013).

James E. Hall, Mark T. Kobata and Marty Denis are partners in the law firm Barlow, Kobata and Denis, which has offices in Los Angeles and Chicago. Comment below or email editors@workforce.com. Follow Workforce on Twitter at @workforcenews.