On April 16, 2013, the Supreme Court issued its opinion in Genesis Healthcare Corp. v. Symczyk1 and held that where a named plaintiff’s individual Fair Labor Standard Act (FLSA) claims have become moot, her claims on behalf of “other similarly situated employees” are also moot because the plaintiff has no personal interest in representing others in the action.
History of the Genesis Litigation
In Genesis, plaintiff Symczyk brought suit against her former employer on behalf of herself and “all other persons similarly situated,” alleging that Genesis violated the FLSA by automatically deducting time for meal breaks even when employees performed compensable work during the breaks. Genesis served Symcyzk with an offer of judgment under Federal Rule of Civil Procedure 68 for $7,500 for alleged unpaid wages, plus “reasonable attorneys’ fees, costs, and expenses” to be determined by the court. The offer represented full satisfaction of Symcyzk’s individual claims in the lawsuit. When Symczyk failed to respond to the offer within the stipulated time period, Genesis moved to dismiss the suit for lack of subject matter jurisdiction, claiming that Symcyzk’s claim had become moot after she effectively rejected the company’s offer that would have fully satisfied her claim.
Although Symczyk argued that dismissing the suit would allow defendants to “pick off” named plaintiffs and thereby hinder the collective action process, the district court held that the Rule 68 offer of judgment fully satisfied Symczyk’s claims and thus mooted both her individual and collective action claims. On appeal, Symcyzk did not dispute that her individual claim was mooted, but she contended that her claim to represent other similarly situated individuals in a collective action was not. The Third Circuit credited Symczyk’s “picking off” argument and found that the collective claims were not mooted even though no other plaintiffs had opted into the collective action. The court remanded the case to allow Symczyk to seek conditional certification.
The Supreme Court’s Opinion
The Supreme Court, however, granted certiorari and then reversed the Third Circuit, holding that the collective claims were properly dismissed for mootness. Notably, the Court avoided answering the question of whether Symczyk’s individual claims were mooted, and instead assumed that they were because the plaintiff had conceded such mootness in the courts below. The Court then held that Symczyk’s collective claims were mooted along with her individual claims because there were no opt-in plaintiffs and Symczyk lacked any personal interest in representing others in the action. In reaching this conclusion, the Court distinguished the collective action context from cases arising in the class action context, explaining that once certified, class actions acquire “independent legal status,” such that mooting the named plaintiff’s claim does not moot the class claims. In contrast, certification of a collective action does not create any independent status nor does it “join additional parties to the action.” Rather, other individuals become parties to the lawsuit only if they file a written consent with the court. Thus, when a named plaintiff’s individual claims in a collective action are moot and there are no opt-in plaintiffs, the collective claims are also properly dismissed as moot.
The Significance and Impact of the Genesis Decision
The Supreme Court’s decision in Genesis is perhaps most significant for the issues it leaves unanswered. First, the Court did not decide whether an unaccepted offer of judgment that would fully satisfy an individual’s FLSA claims moots the case such that dismissal for lack of subject matter jurisdiction is required. The Court’s decision is based entirely on the assumption that the individual claims were moot, based on Symczyk’s concession on this point in the lower courts.2 The Court left unresolved the circuit split regarding the impact of an unaccepted offer of judgment on an individual’s claims.3 This is certain to remain an unsettled issue in future litigation, though it is likely that the Court’s assumption regarding the mootness of Symczyk’s individual claims and its holding regarding the collective claims will impact future lower court decisions on this issue.
Second, the Court clearly distinguished cases arising in the Rule 23 class action context from cases arising in the collective action context, refusing to apply class action principles to the collective action process. The Court, however, failed to clarify the extent of the differences between class and collective actions. For example, it is unclear whether the principles of Wal-Mart Stores, Inc. v. Dukes apply to the collective action context or what exactly the certification standard is for collective actions.
The practical implications of Genesis will largely depend on the facts and circumstances of a particular case. In cases where the number of hours worked by the named plaintiff is undisputed or it is otherwise possible to frame an offer in full satisfaction of the plaintiff’s claims, Genesis provides employers a potentially powerful tool for attempting to avoid collective action certification. Of course, in cases where there is a dispute over the number of hours worked or plaintiff’s alleged damages are otherwise difficult to determine with specificity, it will be much harder to frame an offer of judgment that fully satisfies the plaintiff’s claims. In these types of cases, employers may try to pin the plaintiff down to a specific damages calculation early in the litigation process. Furthermore, because employers usually lack information regarding the plaintiff’s attorneys’ fees at the early stage where offers of judgment are usually made, in order to frame offers of judgment that fully satisfy a plaintiff’s claims, employers will typically have to be prepared to offer to pay plaintiff’s attorneys’ fees and costs as determined by the court, rather than as specified by the company in a Rule 68 offer.
Ultimately, while the Court’s decision in Genesis provides an important new tool for companies and their counsel defending against putative FLSA collective actions, the case’s impact will be limited to some extent by the continuing uncertainty regarding the implications of a rejected offer of judgment on an individual plaintiff’s claims, and by the fact that many types of FLSA claims do not lend themselves to Rule 68 offers that fully satisfy the named plaintiff’s claims.