Source: http://ohio-employmentlawyer.com/2013/09/how-will-the-supreme-courts-opinion-in-genesis-impact-flsa-collective-actions/
Timestamp: 2019-04-19 22:53:31+00:00

Document:
1. The United States Supreme Court’s Genesis holding offered nothing to resolve the circuit split and dodged the central issue: Whether an unaccepted offer of judgment that fully satisfies a plaintiff’s FLSA claim moots the claim.
2. Going forward, the Court’s holding in Genesis is meaningless because it is premised on the contemplation of a situation that should never arise—at least according to the Dissent.
3. To ensure the best chances of proceeding with FLSA claims, lead plaintiffs in collective actions should file motions for collective certification as soon as possible to avoid attempts to moot the case using offers of judgment.
In Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013) the United States Supreme Court held that when a plaintiff’s claim in a collective action becomes moot before other plaintiffs have opted-in, the Court lacks subject matter jurisdiction to hear the case. In order to reach this conclusion, the Court assumed—without deciding—two critical issues.
In Genesis, the plaintiff, a registered nurse, brought a collective action under the Fair Labor Standards Act (“FLSA”) against her former employer. The plaintiff alleged that automatically deducting a 30-minute lunch breach from employees’ shifts, even when the employees continued to perform work during the breaks, violated the FLSA. Her former employer answered the complaint, simultaneously serving upon the plaintiff a Federal Rule of Civil Procedure 68 offer of judgment. The plaintiff rejected the offer. Throughout the proceedings, the plaintiff remained the sole plaintiff in the action and never filed for conditional certification.
The district court held that the offer of judgment fully satisfied the plaintiff’s claim. The court held that plaintiff’s claim was moot and dismissed the case for lack of subject matter jurisdiction. The court of appeals for the Third Circuit reversed. The court agreed that the offer of judgment fully satisfied the plaintiff’s claim and that no additional plaintiffs had opted into the suit. However, the court noted that the “calculated attempts by some defendants to short-circuit the class action process and to prevent a putative representative from reaching the certification stage” should not be permitted. Symczyk v. Genesis HealthCare Corp., 656 F.3d 189, 196 (3d Cir. 2011). Ultimately, the court held that the plaintiff’s FLSA claim was not moot and remanded to the district court in order to allow the plaintiff to seek conditional certification.
The United States Supreme Court granted certiorari on June 25, 2012. Genesis HealthCare Corp. v. Symczyk, 133 S. Ct. 26, 183 L. Ed. 2d 674 (2012). Justice Thomas, writing for the Majority, began with two assumptions: (1) that a valid offer of judgment was made, and (2) that the plaintiff’s failure to accept a valid offer of judgment effectively moots her FLSA claim. The Majority expressly refrained from answering whether, in an FLSA action, an unaccepted offer that fully satisfies a plaintiff’s claim is sufficient to render the claim moot. The Court, assuming the unaccepted offer mooted the plaintiff’s individual claim, held that the plaintiff’s “suit became moot when her individual claim became moot, because she lacked any personal interest in representing others in this action.” Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. at 1529.
Because the Majority failed to do so, the Dissent addressed the question of whether an unaccepted offer of judgment moots the lead plaintiff’s claim: “As long as the parties have a concrete interest, however small, in the outcome of the litigation, the case is not moot.” Genesis, 133 S.Ct. at 1533 (Kagan, J., dissenting). A plaintiff’s claim becomes moot only when the court cannot grant to the plaintiff any effectual relief whatsoever. As the Dissent in Genesis unequivocally states, an unaccepted offer of judgment cannot and does not moot an action. Under Rule 68, an unaccepted offer of judgment is considered withdrawn. Thus, it follows that “when a plaintiff rejects an offer of judgment—however good the terms—her interest in the lawsuit remains just what it was before. And so too does the court’s ability to grant her relief.” Genesis, 133 S.Ct. at 1533 (Kagan, J., dissenting) (“So a friendly suggestion to the Third Circuit: Rethink your mootness-by-unaccepted-offer theory. And a note to all other courts of appeals: Don’t try this at home.”).
Genesis, 133 S.Ct. at 1532-33 (Kagan, J., dissenting). As a practical matter, the Supreme Court’s holding appears to be of little help—as the central issue remains unanswered.
A handful of district courts have examined the holding in Genesis since the Supreme Court’s decision in April 2013. For example, in Ritz v. Mike Rory Corp., No. 12-CV-0367, 2013 WL 4011061 (E.D.N.Y. Aug. 6, 2013), the plaintiff filed a lawsuit against his former employers under the FLSA, alleging unlawful pay deductions and failure to pay minimum wage and overtime. The plaintiff moved for conditional certification approximately eight months after filing his lawsuit. The motion was granted. Shortly thereafter, the defendants submitted an offer of judgment to the plaintiff, which the plaintiff rejected.
The Second Circuit has not yet squarely addressed the issue. However, district courts within the circuit have held that a claim is moot when an offer of judgment provides full relief to the named plaintiff and that offer is rejected, as long as no other parties have opted in the litigation, “despite reasonable opportunity to do so, especially if no motion for conditional certification has been made.” The court held that even if an offer of judgment to the lead plaintiff offers full relief, “courts will not dismiss the case as moot if there is a pending motion for conditional certification and additional individuals have opted in the litigation.” The court echoed the United States Supreme Court’s concerns in Genesis, noting that courts are weary of defendants’ attempts to pick of the lead plaintiffs in order to moot a case by making a Rule 68 offer of judgment as early as possible.
The court rejected the defendants’ arguments founded upon the Genesis decision. It explained that conditional certification had been granted before the offer of judgment was made, and that under the circumstances of this case, the plaintiff should be given time and opportunity to add additional plaintiffs to the FLSA action.
Similarly, in Michaels v. City of McPherson, No. 12-1372-CM, 2013 WL 389543 (July 29, 2013) district court for the District of Kansas considered the Genesis holding. The plaintiff in Michaels filed a collective action under the FLSA against his former employer. Pending before the court was the plaintiff’s motion for conditional certification. The plaintiff moved the court to amend the pleadings to add a party plaintiff. The defendant opposed the motion, arguing the amendment was futile because the plaintiff’s claims were moot.
The defendant asserted that because it offered the plaintiff full relief though an offer of judgment, the FLSA claims were moot, citing to Genesis for support. The court rejected this argument, stating that Genesis is distinguishable: “The Supreme Court did not decide the question of whether an unaccepted offer that fully satisfies a plaintiff’s claim moots the claim. Neither did the Supreme Court decide whether a pending motion for conditional certification changes the analysis.” The court emphasized that both of these distinctions are critical to the instant case.
In sum, the practical relevance of the Genesis holding appears to be minimal. The interplay between the FLSA collective action and Rule 68 offer of judgment is unfolding just as the Dissent in Genesis predicted: the Supreme Court’s holding offers no insight into the actual situations lower courts are faced with. As the circuits remain split, the lower courts reach differing conclusions regarding whether an unaccepted offer that fully satisfies a plaintiff’s claim moots the claim. In short, to be safe, a FLSA collective action lead plaintiff will want to file a motion for conditional certification as soon as possible to increase the chances that the court will refrain from dismissing the action as moot, at least while the motion is pending.

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