On April 16, 2013, the Supreme Court of the United States decided Genesis Healthcare Corp. v. Symczyk. In Genesis, the Court found that when a lone plaintiff sues under the Fair Labor Standards Act (FLSA) on behalf of herself and all other persons “similarly situated,” but then declines to answer a defendant's Rule 68 offer of judgment in the case, the plaintiff's case is rendered moot.
The plaintiff in Genesis is Laura Symczyk. Symczyk sued Genesis Healthcare under the FLSA for backpay after Genesis Healthcare docked its employees a half-hour for lunch each day, even when employees worked through lunch. When Genesis answered Symczyk's complaint, it contemporaneously served upon Symczyk an offer of judgment under Federal Rule of Civil Procedure 68. Basically, a Rule 68 offer is a hybrid between a settlement and a decision on the merits. If the offer is accepted, judgment is entered against the defendant. Defendants typically use Rule 68 offers to place settlement pressure on a plaintiff. For example, an unaccepted Rule 68 offer can shift subsequent litigation costs and cut-off a plaintiff's right to attorneys' fees. Additionally, it can even moot a plaintiff's entire claim.
When Symczyk did not respond to Genesis's Rule 68 offer, the trial court dismissed her case after concluding that the Rule 68 offer fully satisfied her individual claim and, therefore, there was no case or controversy. The Third Circuit reversed, but only as to the collective action. The Third Circuit found that the settlement offer mooted Symczyk's individual claim, but that it did not moot her collective action claim on behalf of others “similarly situated.” The Supreme Court, however, disagreed. The Court ruled that both Symczyk's individual and collective claims were moot, i.e. her entire case was moot.
The Court's analysis of Symczyk's case hinged on basic mootness principles and the distinction between Rule 23 class-actions versus 216(b) collective actions. Because the Third Circuit had previously found that Symczyk's individual claims were moot and because Symczyk never challenged this finding, the Court assumed, but did not decide, that Symczyk's individual claims were moot. After the court assumed that Symczyk's individual claims were moot, the ruling on the collective action allegations turned on a “straightforward application of mootness principles.” According to the Court, “the mere presence of collective-action allegations in the complaint cannot save the suit from mootness once the individual claim is satisfied.”
The Court also highlighted the distinctions between class actions and collective actions. The Court noted that under Rule 23, a putative class acquires an independent legal status once it is certified. However, under a 216(b) collective action, conditional certification does not produce a class with an independent legal status, or join additional parties to the action. Accordingly, the sole function of conditional certification is the sending of court approved written notice to employees. In drawing this distinction, the court found that the “relation back doctrine” is inapplicable in collective actions because “there is simply no certification decision to which Symczyk's claim could have related back.” Simply put, the Court said the FLSA “conditional certification” is not class certification and for the majority of the Court that difference matters.
Takeway
The Fair Labor Standards Act (FLSA) is perhaps the most important federal legislation protecting the rights of employees—and one of the oldest. The purpose of the FLSA is to protect the rights of workers and encourage economic fair play between management and employees. Unfortunately, the Court's decision in Genesis fails to either protect the rights of workers or encourage economic fair play.
