On Tuesday, in Genesis Healthcare Corp v. Symczyk, the Supreme Court struck a blow to collective actions under the Fair Labors Standards Act. In a 5-4 decision, the Court held that courts lack jurisdiction to hear collective action cases if the named plaintiff’s (or plaintiffs’) own claims are “moot.” Under the FLSA, collective actions are similar to class actions in that they allow plaintiffs to sue on behalf other unnamed, but similarly situated, individuals, but collective actions do not require many of the stringent limitations imposed on class actions (such as numerosity or typicality of claims). The Supreme Court’s decision means that if the named plaintiff no longer has a “personal stake” in the case and no other individuals have yet joined the case, no relief is available to the group and the case must end, even though the named plaintiff’s complaint sought damages for a group and not solely for herself.
On Tuesday, in Genesis Healthcare Corp v. Symczyk, the Supreme Court struck a blow to collective actions under the Fair Labors Standards Act (“FLSA”). In a 5-4 decision, the Court held that courts lack jurisdiction to hear collective action cases if the named plaintiff’s (or plaintiffs’) own claims are “moot.” Under the FLSA, collective actions are similar to class actions in that they allow plaintiffs to sue on behalf other unnamed, but similarly situated, individuals, but collective actions do not require many of the stringent limitations imposed on class actions (such as numerosity or typicality of claims). The Supreme Court’s decision means that if the named plaintiff no longer has a “personal stake” in the case and no other individuals have yet joined the case, no relief is available to the group and the case must end, even though the named plaintiff’s complaint sought damages for a group and not solely for herself.
In reaching its decision, the Supreme Court did not address the issue of whena named plaintiff’s claims become moot, though it assumed that Ms. Symczyk’s claim itself was because both lower courts held this was the case and Ms. Symczyk had not sought review on the issue. The dissent, written by Justice Kagan, argued that the majority was “wrong, wrong, and wrong” to make this assumption. After Ms. Symczyk filed her case, her employer offered to settle her wage claims for $7,500, but made no offer to settle the claims she made on behalf of similarly situated employees. Ms. Symczyk did not accept the offer and so received nothing from her employer. The dissent argued an unaccepted settlement offer of this sort cannot “moot” a claim, as in such cases the court still has the power to grant her relief.
In its amicus brief, the National Women’s Law Center argued that collective actions lie at the core of enforcement of the FLSA, as well as the Equal Pay Act (“EPA”), which relies on the same mechanism. These suits—which permit multiple claims to be brought in a single action—are crucial to low wage working women who might otherwise be unable to find representation given the relatively low dollar stakes in their individual claims, be prevented from asserting their rights due to a lack of information about employer practices or legal processes, and face retaliation by standing alone in challenging their employer. In particular, the low wage nursing home workers at issue in Symczyk illustrate the need for collective actions because of the rampant wage theft in the nursing home industry, these workers’ lack of bargaining power, and high turnover rates.
Unfortunately, Symczyk may well have a chilling effect on FLSA suits unless lower courts, which are split, or the Supreme Court itself, make clear that a rejected settlement offer to a plaintiff does not moot her claim. Until then, courts may shoot down collective actions when defendants strategically pick off individual named plaintiffs. In the meantime, the dissent had a message for the Third Circuit Court of Appeals in this case: “Rethink your mootness-by-unaccepted-offer theory. And a note to all other courts of appeals: Don’t try this at home.”