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Supreme Court to Hear Oral Arguments in Symczyk v. Genesis Healthcare Corp.

On December 3, 2012, the Supreme Court will hear oral arguments in Symczyk v. Genesis HealthCare Corp., 656 F.3d 189 (3d. Cir. 2011). On appeal from the Third Circuit, a Supreme Court decision in favor of the employer could effectively end use of collective actions under the Fair Labor Standards Act ("FLSA"). Facts:  Laura Symczyk worked as a registered nurse for Genesis HealthCare Corp. ("Genesis") from April through December 2007. 656 F.3d at 190. During her employment, Genesis implemented a policy of reducing the pay of certain employees for mandatory meal breaks, whether or not the employees performed work during the thirty minute period. Id. As discussed in a previous blog post, such deductions violate the FLSA, and thus Symczyk and other employees may be owed a substantial amount of overtime pay.

The Trial Court Decision: Symczyk filed a lawsuit against Genesis in December 2009, seeking to represent herself and other similarly situated employees of Genesis who were subjected to the automatic deductions. Genesis responded by offering Symczyk $7,500 to settle her claims under Federal Rule of Civil Procedure 68, also known as the "offer of settlement rule." Id. Generally, an offer of complete relief - i.e., enough to make the plaintiff whole - renders a plaintiff's claim moot. Sandoz v. Cingular Wireless LLC, 553 F.3d 913, 921 n.5 (5th Cir. 2008). Because the $7,500 offer was more than Symczyk could recover at trial, Genesis argued Symczyk's claim was moot, and thus the court lacked jurisdiction to hear the case. The trial court agreed.Third Circuit Decision: On appeal, the Third Circuit reversed the trial court decision. In reversing, the Third Circuit noted that allowing defendants to use an offer of judgment to moot a potential FLSA collective action would frustrate the purpose of the FLSA, which is to protect low wage earners. See Symczyk, 656 F.3d at 192, 201. The Third Circuit also emphasized that an FLSA plaintiff must be allowed a certain amount of time to certify a collective action before a defendant may use an offer of settlement that would otherwise moot the claim.The Supreme Court: The Fifth Circuit is the only other Court of Appeals to rule as to whether an unaccepted Rule 68 offer of settlement may be used to moot an FLSA claim prior to the certification of a collective action. In Sandoz v. Cingular Wireless, LLC, 553 F.2d 913 (5th Cir. 2008), the Fifth Circuit reached the same conclusion later arrived at by the Third Circuit in Symczyk. In Sandoz, the Fifth Circuit was concerned FLSA defendants would routinely be able to "pick off" a named plaintiff's FLSA claims before given a change to certify a collective action. If the Supreme Court reaches the opposite conclusion, Defendants will have the opportunity to dismiss virtually all individual FLSA claims before plaintiffs are able to get to the collective action stage, and thus frustrate an employee's ability to collect unpaid overtime wages owed.Visit www.fiddlerlaw.com/ for the latest developments in wage & hour, discrimination, and other employment law topics. For a more detailed analysis of the Symczyk case, visit SCOTUSblog- AWR
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