July 12, 2012
By Malani L. Kotchka, Lionel Sawyer & Collins
There is a body of caselaw which holds that employers may offer judgment to an employee in a wage and hour lawsuit and if the employee refuses to accept the offer, a court may still decide that the employee can no longer pursue the lawsuit on behalf of herself or an alleged class of employees. Genesis Healthcare Corp. originally offered Symczyk $7500 which covered all of her wage and hour claims. She refused the offer but the district court dismissed her lawsuit.
The Third Circuit held that the district court first had to consider Symczyk’s motion to certify the class. If the district court decided that Symczyk’s motion to certify the class would be untimely or otherwise denied the motion on its merits, then the Rule 68 offer to Symczyk in full satisfaction of her individual claims would moot the entire action.
The fact that the U.S. Supreme Court has decided to hear the appeal of Genesis in its next term means that the Court is ready to clarify whether an offer to fully satisfy an employee’s claims can moot the putative collective or class action. Employees’ attorneys dislike offers of judgment because they lose out on the possibility of large attorney’s fee awards which they could recover if they represent a class. If Genesis Healthcare prevails before the United States Supreme Court next term, FLSA class actions will be much less attractive to employees’ lawyers.