The Supreme Court has agreed to hear two cases during its Fall 2015 term that could further transform the wage and hour class action landscape. We briefly discuss those two cases below.
Gomez: The Effect of Rule 68 Offers of Judgment on Class/Collective Actions
Does everyone remember all the hoopla over the Supreme Court’s Genesis decision a couple of years ago? Finally, the land’s highest court was going to tell employers how they could use a quirky procedural rule to quickly put an end to potentially costly wage and hour collective/class actions. But then it didn’t (sort of). Now, it appears that the Court is poised to whet our appetite once again.
In Campbell-Ewald Co. v. Gomez, the Court is expected to decide whether a Rule 68 offer of judgment for a full claim of relief moots both an individual and a Rule 23 class action claim. The decision will have significant consequences for the wage and hour world because it will either permit or deny employers the opportunity to utilize a “picking off” strategy in connection with wage and hour class action litigations.
That strategy allows employers to quickly end a case where they make a Rule 68 offer of judgment that provides the named plaintiff with all of the relief which he or she sought before the plaintiff moves to certify a class. Even if the plaintiff rejects or refuses to respond to the Rule 68 offer, the Supreme Court will decide whether the plaintiff’s claims still must be dismissed because he or she received everything asked for in the complaint. If the plaintiff’s claim is mooted, next the Supreme Court will decide if that also means that the case cannot therefore proceed on a class basis.
One other note: Gomez involves a claim under the Telephone Consumer Protection Act and not the Fair Labor Standards Act, which does not use Rule 23 as a procedural device to resolve clams on a classwide basis. Instead, FLSA has its own procedural device that requires courts to analyze whether to authorize a collective action. In Genesis, which involved a FLSA claim, the Supreme Court assumed without deciding that a Rule 68 offer would moot the individual’s claim, and because the individual claim was mooted, the plaintiff had no personal interest in representing any putative, unnamed plaintiff or any other continuing interest in the matter. It made that assumption because the plaintiff never appealed the lower court finding on that issue. Thus, we believe that if the Supreme Court finds for the employer in Gomez, employers will also be able to use the picking off strategy for FLSA claims despite the procedural differences between FLSA collective actions and Rule 23 class action claims.
Tyson: The Impact of Differences Among Class Members in Certifying Class/Collective Actions
Typically, to certify a class under Rule 23, a plaintiff must show that there are questions of law or fact common to the class (the commonality requirement) and those questions predominate over any questions affecting only individual members (the predominance requirement). Separately, to authorize a collective action notice under the Fair Labor Standards Act, a plaintiff must show that the potential plaintiffs are “similarly situated” to one another – typically an easier showing to make.
In Tyson Foods, Inc. v. Bouaphakeo, the plaintiff alleged that Tyson violated federal and state wage and hour laws by failing to pay him and others for time they spent donning and doffing certain protective gear and traveling to worksites. The trial court certified a Rule 23 class action and authorized a collective action notice under FLSA on the basis that there were common questions over whether these activities were compensable, and the plaintiffs later prevailed at trial, in part, because the trial court allowed the plaintiffs to use statistical evidence that treated all class members as an average class member for purpose of measuring damages even though class members spent different amounts of time donning and doffing and some spent no time at all.
On appeal, the Supreme Court will decide whether these differences in individual class members can be ignored when deciding whether to certify a Rule 23 class action or authorize a FLSA collective action, where liability and damages will be determined using statistical techniques presume all class members are identical to the average observed in the same. It will also decide whether a court may certify a Rule 23 class action or authorize a FLSA collective action where the class contains hundreds of members who were not injured and have no right to damages. If the Supreme Court decides these questions in the negative then it will be a huge victory for employers and foreclose another avenue for plaintiffs to pursue collective relief.