Human Resources News & Insights

Supreme Court gives the green light to the ‘pickoff play’

Did the Supreme Court just hand employers a new weapon to fight collective FLSA lawsuits?

The lawyers are calling it “the pickoff” — meaning that if an employer can “pick off” the lead litigant in a collective wage-and-hour suit, the rest of the lawsuit becomes moot.

Here’s a look at the recent case:

Laura Symczyk was a registered nurse at a nursing home in Philadelphia. She filed an FLSA complaint on behalf of herself and “all other persons similarly situated,” charging that her employer, Genesis Healthcare Corp., violated the FLSA by automatically deducting 30 minutes of time worked per shift for meal breaks for certain employees, even when the employees were actually working through those breaks.

Genesis immediately made Symczyk a settlement offer: $7,500 in back wages, plus attorney’s fees and costs. The employer gave her 10 days to respond, after which the offer would be withdrawn.

None of Symczyk’s co-workers had joined the lawsuit before the company had made its offer.

But Symczyk passed on the settlement out of concern for the other individuals involved. The company then filed a motion, claiming that because they had made Symsczyk an offer that fully covered her individual damages (and Symczyk admitted that it would), the case had become moot — and all those “persons similarly situated” were out of luck.

Symczyk’s lawyers argued that Genesis was improperly trying to “pick off” Symczyk’s suit in order to stop the collective-action process from unfolding.

The federal district court held for Genesis. The Third Circuit Court of Appeals reversed, agreeing with the argument that picking off the lead plaintiff in a wage-and-hour suit could short-circuit the process of collective actions.

And so the case made its way to the Supreme Court.

Sidestepped the ‘mootness’ issue

The Supreme Court sidestepped the question of whether Symczyk’s case was properly adjudged as moot, because the question was “not properly before us,” wrote Justice Clarence Thomas in the majority decision.

The court found that Symczyk had no “personal interest” in the complaints from co-workers — they couldn’t help “preserve her suit” in any way. And once her individual claim was satisfied — unless other workers had come forth to join in the action — the case was a done deal.

The final vote was the familiar 5-4 split along conservative and liberal blocs.

Justice Elena Kagan wrote a scathing dissent to the majority opinion. The bottom line of the disagreement was that simply making an offer — and then having that offer rejected — shouldn’t be enough to end a lawsuit.

A few excerpts from Kagan’s dissent, written on behalf of the other members of the court’s liberal bloc:

The Court today resolves an imaginary question, based on a mistake the courts below made about this case and others like it. … Embedded within [the court’s ruling] is a crucial premise: that the individual claim has become moot, as the lower courts held and the majority assumes without deciding.

But what if that premise is bogus? What if the plaintiff’s individual claim here never became moot? And what if, in addition, no similar claim for damages will ever become moot? In that event, the majority’s decision — founded as it is on an unfounded assumption — would have no real-world meaning or application. …

Feel free to relegate the majority’s decision to the furthest reaches of your mind: The situation it addresses should never again arise.

A viable option, not foolproof

So does the ruling give employers a new avenue to fight collective wage-and-hour actions?

The National Federation of Independent Business thinks so:

“The Supreme Court’s decision has significant implications for small-business owners, who are disproportionately impacted by costly wage and hour lawsuits. Small employers don’t have the financial advantages of much larger firms; diverting their limited resources for unnecessary litigation could mean the end of their business and all the jobs they created,” said Karen Harned, executive director of the NFIB Small Business Legal Center. “The ruling is a victory for small businesses because it will make it easier to stop frivolous lawsuits before they become multi-million dollar affairs.”

But some employment law attorneys aren’t so sure. Michael Fox, writing on the Jottings by an Employer’s Lawyer blog, expresses his agreement with Justice Kagan that the case is the “most one-off of one-offs.”

“I had hoped … that when the Supreme Court dealt with [this case] by deciding whether or not an offer that would completely resolve an individual plaintiff’s claim prevented a collective action from going forward, that they might somehow wander into what seems to be an issue never subject to review: What is the standard for conditional certification of a collective action.”

But, Fox said, by dodging the “mootness” question, the Supreme Court still leaves the matter in limbo.

All in all, it appears the “pickoff play” remains at least a viable option for employers facing collective wage-and-hour suits. But we wouldn’t call it foolproof.

The case is Genesis Healthcare v. Symczyk.

 

 

 

 

 

 

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