Academic journal article Journal of Corporation Law

The Genesis Problem: How Unaccepted Offers of Judgment and Mootness Have Complicated Fair Labor Standards Act Litigation

Academic journal article Journal of Corporation Law

The Genesis Problem: How Unaccepted Offers of Judgment and Mootness Have Complicated Fair Labor Standards Act Litigation

Article excerpt

I. INTRODUCTION

In Genesis Healthcare Corp. v. Symczyk, the Supreme Court assumed, but never decided, that a defendant-corporation's offer of judgment mooted a plaintiff-employee's individual claim that her employer regularly deducted 30 minutes for lunch breaks, even when she and her coworkers worked during those breaks.1 Justice Kagan dissented, arguing that the majority answered a question that should not have arisen and, in doing so, missed an opportunity to resolve a split among the Courts of Appeals.2 Although the Court drew a brighter line between Rule 23 class actions and Fair Labor Standards Act (FLSA) Section 216(b) collective actions,3 it left corporate employers, employees, and attorneys with questions about the sustainability of certain strategies in litigating collective actions.4 The viability of such strategies will be more evident if the Court directly settles the underlying Symczyk issue in a future case.

This Note examines the essential issue: whether an unaccepted offer of judgment moots an individual plaintiff's FLSA Section 216(b) claim.5 Specifically, Part II introduces the FLSA and Section 216(b)'s collective actions mechanism, Federal Rules of Civil Procedure Rule 23 and Rule 68, and courts' evolving jurisprudence regarding Rule 68 mootness in class and collective actions. Part III utilizes Justice Kagan's Symczyk hypothetical to analyze the divergent analysis federal courts have used in evaluating the effect of offers of judgment on plaintiffs' class and collective action claims.6 Finally, Part IV recommends the Court explicitly declare a plaintiff's claim to be alive and well in the face of an unaccepted offer based on the similar purpose and structure of Rule 23 and Section 216(b).

II. BACKGROUND

Under Section 216(b) of the FLSA, Congress gave employees the opportunity to collectively litigate against an employer, by bringing a collective action, for violations affecting similarly situated employees.7 This Part focuses primarily on the historical and evolving jurisprudence surrounding this section of the FLSA. Recently, the Supreme Court acknowledged lower courts' divergent treatment of the intersection of Section 216(b) collective actions, class actions under Rule 23 of the Federal Rules of Civil Procedure (FRCP), and the potential mooting effect of unaccepted FRCP Rule 68 offers of judgment.8 To lay the foundation for the rest of the Note, the following sections will provide an overview of the FLSA and Section 216(b), FRCP Rule 23, FRCP Rule 68, and courts' handling of Rule 68 mootness principles in Section 216(b) collective actions.

A. Fair Labor Standards Act

In 1938, Congress enacted the FLSA to support "the unprotected, unorganized, and lowest paid of the nation's working population."9 Codified at 29 U.S.C. § 201 et seq., the FLSA carries out this purpose through provisions: 1) establishing a minimum wage;10 2) setting a threshold of 40 hours per week, beyond which an employer must pay the employee one and a half times the regular hourly rate;11 3) requiring employers to keep track of all employees' wages and hours;12 and 4) authorizing individual employees and the Secretary of the Department of Labor to bring lawsuits against employers in federal court.13 To understand how lawsuits alleging FLSA violations have developed in court, it is first important to outline the evolution of the legislation as well as how the section authorizing collective actions fits into the legislative purpose and framework of the FLSA.

1. Section 216(b) and the Authorization of Collective Actions

When Congress enacted the FLSA, it gave extensive powers to employees by allowing designated representatives to bring actions on behalf of all similarly situated employees.14 As a result, the courts saw a swell of frivolous lawsuits by plaintiffs who had no interest in the outcome.15 By 1947, Congress had taken steps to reduce the swell, including eliminating the designated representative option, and adding the requirement that an employee give written consent, i. …

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