Benefits & Compensation News

Supreme Court tells employers how to ‘pick off’ FLSA collective actions

The Supreme Court recently ruled on a case that outlines one way employers may be able to “pick off” FLSA collective action lawsuits.

Essentially, it ruled that if an employer can act quickly to shoot down the lead plaintiff’s case in an FLSA collective wage-and-hour suit before other plaintiffs join in, the entire lawsuit becomes moot.

Employment law attorneys are calling this “the pickoff.”

What happened?

Laura Symczyk, a registered nurse at a nursing home in Philadelphia filed an FLSA collective action suit on behalf of herself and “all other persons similarly situated” at her employer, Genesis Healthcare Corp. Her suit claimed Genesis illegally deducted 30 minutes of paid time for meal breaks, even when its employees worked through their breaks.

Genesis tried to settle the case before any of Symczyk’s co-workers joined the lawsuit by offering her $7,500 in back wages, plus enough to cover her attorney’s fees and other litigious costs — enough to make her whole.

Out of concern for her co-workers, Symczyk turned down the settlement offer.

Genesis then filed a motion to get her case thrown out by claiming that because the company had made Symczyk an offer that fully covered her damages and other costs, her case became moot — and because she was the lead plaintiff, the collective action as a whole should be tossed.

A federal district court agreed and ruled in the company’s favor. But an appeals court reversed the ruling, having accepted the argument from Symczyk’s lawyers that Genesis was improperly trying to “pick off” the suit to stop the collective action.

Next stop: The Supreme Court.

Ruled only on the ‘pickoff’

Much to the chagrin of some of the justices, the High Court only tackled the question of whether picking off the lead plaintiff’s claims in a collective action suit could halt the entire suit — as opposed to answering what some viewed as the larger question: whether or not the settlement offer should’ve even rendered her case moot to begin with.

Justice Elena Kagen argued that simply making a settlement offer shouldn’t be enough to end the lawsuit. But because Symczyk didn’t bring that issue before the two previous courts, the Supreme Court couldn’t rule on it.

And in the end, it ruled that because Symczyk’s lawsuit had been rendered in a previous court (an issue she didn’t contest), she no longer had any personal interest in the case. So unless other workers had come forth to join the action (which hadn’t happened), the case was closed.

What’s it all mean?

For now, employers that act fast to get a settlement offer on the table prior to any other plaintiffs joining a lawsuit have a way to potentially shoot down collective actions — at least in judicial regions that find settlement offers can render a lead plaintiff’s lawsuit moot (again, the High Court left this issue open).

It’s important to note, however, that picking off a collective action suit doesn’t mean other similarly situated individuals can’t still bring their own individual or collective lawsuits to the table.

The court also stated that the approach of cutting off the head of a group lawsuit to stop others from piling on may not work with class actions — because in a class action similarly situated individuals are still considered part of the suit, unless they opt out.

Cite: Genesis Healthcare Corp. v. Symczyk

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