In a widely anticipated decision, the Supreme Court of the
United States held in Genesis HealthCare Corp. v. Symczyk
that a putative Fair Labor Standards Act ("FLSA")
collective action was properly dismissed where the lead
plaintiff's claim was moot and no other plaintiffs had joined
the litigation. However, the Court's April 16, 2013
opinion left unanswered important questions regarding the interplay
between individual offers of judgment and collective litigation
under the FLSA, including whether a plaintiff's refusal to
accept an offer of judgment that would fully satisfy his or her
claim renders the claim moot.
In Symczyk, the plaintiff-appellee's district court
complaint alleged that her employer failed to compensate employees
for work performed during scheduled meal breaks. Before any
other employees joined the litigation, the employer made an offer
of judgment that would have satisfied the plaintiff's
individual claim. Although the plaintiff did not accept the
offer, the district court nonetheless dismissed as moot both the
individual and collective action claims. The United States
Court of Appeals for the Third Circuit agreed on appeal that the
plaintiff's individual claims were moot, but reinstated the
plaintiff's collective action claims.
Because the Third Circuit had restored her collective action
claims, the plaintiff did not challenge the mootness of her
individual claim before the Supreme Court. The Court thus
assumed, without deciding, that this aspect of the Third
Circuit's decision was correct. From this assumption, the
Court held that a "straightforward application of well-settled
mootness principles" also required dismissal of the
plaintiff's collective action claims, as the plaintiff did not
have any personal interest in representing other employees who had
not yet joined the suit.
The Supreme Court's decision left unresolved a significant
split among the federal Courts of Appeals. Whereas the Third
Circuit had held previously that an unaccepted offer of judgment
may moot a plaintiff's individual claim, other Courts of
Appeals have held that the viability of a plaintiff's claim is
not affected by her decision to reject a fully satisfactory offer
of judgment. This undecided issue, highlighted in a
dissenting opinion joined by four of the Court's nine justices,
leaves important questions unanswered for plaintiffs and defendants
alike in putative collective action matters where an offer of
judgment is made.
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As insurance premiums rise, and more companies self-insure, "wellness programs" have emerged to merge the interests of employees in being well and employers in keeping them well and away from the medical establishment.