Third Circuit: Employer Can’t Moot Collective Action with Offer of Judgment

In Symczyk v. Genesis HealthCare Corp., 2011 U.S. App. Lexis 18114 (3d Cir. 2011) the Third Circuit Court of Appeals gave employees a victory when it reversed a lower court’s decision which had dismissed an FLSA suit as moot.  In Symczyk, the putative representative plaintiff was a nurse who sued her employer to recover unpaid wages owed to coworkers and to her after they were subjected to a policy that automatically deducted a 30-minute meal period, even if they worked during the “meal break.”  The employer answered the complaint and simultaneously made an offer of judgment to the plaintiff for $7,500, which covered all her damages.  About a month later, the employer moved to dismiss, arguing that the nurse’s claim was moot and the court lacked subject matter jurisdiction because the nurse had not accepted the offer to make her whole. The trial court agreed with the employer and dismissed the suit, but the Third Circuit reversed.

 The Third Circuit invoked the “relation back doctrine” to prevent the employer from rendering the potential collective action moot by making an offer of judgment to the nurse in a strategic attempt to “pick off” the named plaintiff before the court could consider certification of the collective action.  Under the relation back doctrine, a court can retain jurisdiction of a case to rule on a named plaintiff’s attempt to represent a class by treating a certification motion as though it had been filed at the same time as the initial complaint.  In other words, a court can pretend that the certification motion was filed before an employer makes an offer of judgment to decide class certification.   The Third Circuit quoted the Fifth Circuit which declared in another case that: “Congress did not intend . . . to create an ‘anomaly’ by allowing employers to use Rule 68 [offers of judgment] as a sword, ‘picking off’ representative plaintiffs and avoiding ever having to face a collective action.”

 Ultimately, the Third Circuit remanded the case to allow the nurse to move for conditional certification and have the trial court decide whether the certification motion was made without undue delay.  On remand, if the trial court found that the nurse’s certification motion was timely, then the relation back doctrine would apply.  Then, if the trial court allowed the suit to proceed as a collective action and at least one other similarly situated employee opted in, then the offer of judgment made to the nurse would not moot the collective action because such offer would no longer fully satisfy everyone in the collective action.

 A key lesson from Symczyk is that a prospective FLSA representative plaintiff should not stall in filing a motion to certify so that he/she can reduce the possibility that a defendant makes an offer of judgment to him or her to render the potential collective action moot.

Thanks to Attorney Erick Diaz for this post.