Tuesday, April 16, 2013

SCOTUS Decides FLSA Pick-Off Case

Moments ago, the Supreme Court issued its opinion in Genesis Healthcare Corp. v. Symczyk. You may recall my previous coverage of this case as the "FLSA Pick-Off Case."

In short, an employee 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, effectively mooting her claim (more on that later) before any more employees joined the collective action. The district court dismissed the case because it was moot as to the only plaintiff.

The Third Circuit reversed, but the Supreme Court sided with the district court. The effect is that employers can "pick-off" the lead plaintiff in a collective action and avoid the collective action entirely.

Not so fast though! The majority assumed without deciding that the Rule 68 offer did in fact moot the lead plaintiff's claim. The liberal bloc dissented with Justice Kagan calling the majority's assumption "bogus" and resulting in the majority opinion having "no real-world meaning or application" (ouch). Justice Kagan argues that the offer in this case was never accepted and therefore the plaintiff's case was never mooted (i.e. the plaintiff was never effectively picked off).

So, if you ever have a pick-off case, be prepared to argue over whether a Rule 68 offer of judgment for full relief does in fact moot the individual's claim.