Supreme Court Gives Big Boost to Employers in Genesis Healthcare Corp. v. Symczyk - Articles

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Posted by: Christy Gibson on Jul 23, 2013

By Bryan E. Pieper*

In Genesis Healthcare Corp. v. Symczyk,569 U. S. ____ (April 16, 2013),the U.S. Supreme Court held  a named plaintiff in an FLSA collective action can be “picked off” when the plaintiff fails to accept a full offer of judgment.

Laura Symczyk sued her employer, Genesis Healthcare Corp., in a collective action for allegedly violating the Fair Labor Standards Act (FLSA).  Ms. Symczyk alleged Genesis failed to pay for time during meal breaks when she had actually worked during some or all of the breaks. During the litigation, Genesis made a Rule 68 Offer of Judgment, offering to pay all of Ms. Symczyk’s unpaid wages, plus attorneys’ fees, costs and expenses. When Ms. Symczyk did not accept the offer, Genesis moved to dismiss the suit, contending she no longer had a “personal stake” in the outcome, as she had been offered all the relief she was seeking.  

Ms. Symczyk argued the company was trying to “pick her off,” in order to scuttle a collective claim she was asserting on behalf of her co-workers.   The District Court, finding that none of her co-workers had joined the claim yet and that her personal claim had been fully satisfied, dismissed Ms. Symczyk’s case. The Third Circuit Court of Appeals reversed the District Court, holding that while Ms. Symczyk’s personal claim was moot, permitting a defendant to use an Offer of Judgment in this manner could “short-circuit the class action process” and “prevent a putative representative from reaching the certification stage.”

The Supreme Court overturned the Third Circuit and upheld the dismissal of Ms. Symczyk’s claims.  Writing for the majority, Justice Clarence Thomas noted that for federal jurisdiction to exist, a plaintiff must have a legally cognizable claim and a personal stake in the outcome of the action. The majority acknowledged the federal Courts of Appeals are split on whether an Offer of Settlement is enough to make it moot, but stated that it would not resolve that question because the mootness issue was not properly before the Court.  The Third Circuit had ruled her personal claims moot, and Ms. Symczyk had not filed her own appeal to the Supreme Court; thus, according to the Court, it was barred from considering that question.   

The majority held Ms. Symczyk had “no personal interest in representing putative, unnamed claimants, nor any other continuing interest that would preserve her suit from mootness.” The Court found that unless others have come forward to participate in the litigation, nothing survives the satisfaction of the plaintiff’s claim, and the mere presence of collective-action allegations in the complaint cannot save the suit from mootness once the individual claim is satisfied.

Justices Roberts, Alito, Kennedy, and Scalia joined in Justice Thomas’ opinion, while Justices Kagan, Breyer, Ginsburg and Sotomayor dissented.  The dissent focused largely on the mootness issue, a question the majority had refused to reach.  The dissent argued a mere offer to pay off a litigant, when that offer simply went unaccepted, is not enough to end a lawsuit.   Therefore, the dissent argued, the majority had proceeded on the false assumption that satisfied the federal court rule governing such payment offers, which rendered the remainder of the majority’s analysis beside the point.

Although this case dealt with an FLSA collective action, in which co-plaintiffs must “opt in” to be part of the lawsuit, not class actions, it will be interesting to see if any of the Court’s rationale bleeds over into class action litigation. Going forward, it also will be interesting to see how this decision affects the early dynamics of FLSA collective actions.  One might expect to see more defendants make offers of judgment to class representatives, in an effort to nip class or collective actions in the bud by mooting the class representative’s individual claims. Similarly, one might expect plaintiffs’ lawyers to attempt to line up multiple class members as plaintiffs before filing the lawsuit.  If the potential class or liability exposure is large enough, in many cases it may be difficult for plaintiffs’ lawyers to line up enough co-plaintiffs initially to make this kind of preemptive strike cost-prohibitive.  Then again, defendants must consider whether the economics of taking on each plaintiff, one by one, is really the best route, once plaintiffs realize the defendants have a strategy of “rolling over” easily with an Offer of Judgment on each one.

*Bryan Pieper is a partner in the law firm of DHPM, P.C. in Nashville, Tennessee, where he primarily practices employment discrimination and law representing both employees and employees as well as commercial litigation. He is a graduate of Vanderbilt School of Law.  Bryan may be reached at bpieper@dhpm.com or (615) 425-7114.