When an employee files a collective action under Fair Labor Standards Act, she is trying to recover unpaid wages for herself and other workers who find themselves in the same pickle.
An astute defense lawyer might tell his client, “Pay her!” This is not necessarily altruism. It might just be a sneaky little litigation tactic.
An “Offer of Judgment” under Rule 68 of the Federal Rules of Civil Procedure is where a defendant offers to have judgment taken against it. If the plaintiff refuses, she must “beat the offer” at trial or have to pay costs. This works well in most single party cases. However, it creates some interesting (and unintended) complications in an FLSA collective action.
In a very good decision, the Sixth Circuit decided to sort all of this out so lawyers wouldn’t be left scratching our heads. See O’Brien v. Ed Donnelly Enterprises, 575 F.3d 657 (6th Cir. 2009). The Sixth Circuit said:
- If a defendant makes an offer of judgment for everything (or more) that the plaintiff is claiming, then the plaintiff’s claim is moot. The court should just enter judgment and move on to other things. It doesn’t matter whether the plaintiff formally accepts it.
- If the case is a collective action, however, the defendant cannot get rid of the case by offering only the lead plaintiff everything she is entitled to. The Sixth Circuit said, “a Rule 68 Offer of Judgment cannot moot a lead plaintiff’s FLSA claim when the lead plaintiff timely moves for collective certification, because the motion relates back to the lead plaintiff’s filing of the complaint.”
- If the court ultimately denies the motion for collective certification, then no harm is done. If the defendant had previously made an Offer of Judgment for the full amount the lead plaintiff is owed, then “the lead plaintiff represents only herself, and her claim is moot.” She still gets her money.
Thanks to the O’Brien court, this has been the law in the Sixth Circuit (which includes Tennessee) for the last three years. Recently, the Third Circuit addressed this issue and reached a result that was similar in most respects. All of the courts, however, do not agree. If you’ve read this blog very much, you know that it’s hard to get judges to agree on anything.
The United States Supreme Court has now decided they need to take a look at this issue. They granted certiorari in the case from the Third Circuit, Genesis Healthcare Corp. v. Symczyk. Oral argument is December 3.
This will be the first procedural FLSA case the Supreme Court has tackled in some time. It will be interesting to see how the court handles this specific issue. On a broader scale, it will give us the first look at the way the Roberts court views the procedures that have developed in FLSA collective actions. Stay tuned.