Mooting the mootness issue as moot? Symczyk's impact on FLSA litigation in Florida and beyond.

AuthorGibbs, J. Evan
PositionFair Labor Standards Act

Seven thousand, sixty-four --that is the record-setting number of federal wage and hour suits brought under the Fair Labor Standards Act (FLSA) between March 2011 and March 2012. (1) That number represents an almost five-fold increase in the number of FLSA federal actions brought since the survey began in 1993. (2) Ostensibly, there are three primary reasons behind the high number of FLSA claims. First, the FLSA requires an award of attorneys' fees to successful plaintiffs regardless of the wage amount in controversy, (3) although there is no similar provision for prevailing defendants. Second, the FLSA is a strict-liability statute, (4) even though the coverage of the statute is subject to considerable uncertainty. (5) Third, [section]216(b) of the FLSA provides a mechanism whereby an employee can bring an action on his or her own behalf and "on behalf of any [similarly situated] employee"; such actions are known as collective actions. (6)

Based on these three factors, there has been a rise in the number of collective actions brought under [section]216(b) of the FLSA. Accordingly, as explained in greater detail below, a strategy has evolved in FLSA collective action litigation in which a defendant will make a Rule 68 offer of judgment to a named plaintiff before the action is certified by the court as a collective action. Specifically, the defendant offers to settle the case for the full amount of the named plaintiff's purported damages, plus reasonable attorneys' fees and costs, and the defendant will then file a motion to dismiss on the grounds that the defendant has offered to compensate fully the plaintiff, rendering the case moot since there is no longer a live case or controversy as required by U.S. Const. art. III. The effect of this tactic, when successfully employed, is that the collective action is, as they say, nipped in the bud; that is, once the named plaintiff's claim is mooted, the case will not proceed, and other potential plaintiffs cannot opt-in to the lawsuit. For defendants, potential exposure to numerous plaintiffs' alleged unpaid overtime claims and attorneys' fees and costs is significantly reduced. For named plaintiffs, their claims are fully satisfied (possibly for more than the claims were actually worth). For potential opt-in plaintiffs, however, they will have to file separately their own suits against the defendant. Thus, based on the language of [section]216(b) and the practical realities of collective action litigation, a divergence of authority has developed as to whether Rule 68 mootness principles thwart the underlying goal of the FLSA's collective action mechanism.

This issue was recently before the U.S. Supreme Court in Symczyk v. Genesis Healthcare Corporation, 656 F.3d 189 (3d Cir. 2011), cert. granted, 133 S. Ct. 26 (2012). This article highlights the practical implications of the ruling for plaintiffs and defendants, preceded by a brief background of the relevant law, and an analysis of the Court's ruling.

The Development of FLSA Collective Actions

The FLSA, codified at 29 U.S.C. [section]201 et seq., was enacted in 1938 in order to help the "lowest paid ... of the nation's working population" to secure a livable wage. (7) Between its enactment and 1947, the FLSA permitted an employee to designate an agent or representative to bring an action on behalf of all employees similarly situated under the FLSA's collective action mechanism. (8) However, responding to "excessive litigation spawned by plaintiffs lacking a personal interest in the outcome," Congress amended the act, eliminating "representative action[s] by plaintiffs not themselves possessing claims." (9) To that end, in 1947 Congress inserted a requirement that similarly situated employees must affirmatively "opt-in" to an ongoing FLSA suit by filing written consents. (10)

Currently, under [section]216(b), the FLSA provides that "[a]n action ... may be maintained against any employer ... by any one or more employees for and in behalf of himself or themselves and other employees similarly situated." (11) When deciding whether a [section]216(b) suit may move forward as a collective action, courts typically employ a two-pronged approach. First, the court makes a preliminary determination as to whether the employees in the complaint can be provisionally categorized as "similarly situated" to the putative representative. If the plaintiff satisfies this test, the court will "conditionally certify" the collective action for the purposes of notice and pretrial discovery. (12) After discovery, a court will then make a conclusive determination as to whether each plaintiff who has opted in to the collective action is in fact similarly situated to the named plaintiff, and, should the plaintiff satisfy this second prong, the case will proceed to trial on the merits as a collective action. (13)

Importantly, once a plaintiff has cleared the hurdle of having the action conditionally certified, notice of the suit is sent to potential opt-in plaintiffs to inform them of their ability to opt in to the action. (14) Obviously, the potential addition of more plaintiffs makes this step particularly vital for employers, plaintiffs, and their respective attorneys, as more parties tend to drive up litigation costs, and because, as mentioned above, [section]216(b) provides for reasonable attorneys' fees and costs. (15)

However, the crucial issue is whether the named plaintiff in a putative FLSA collective action has a procedural right to represent other potential plaintiffs independent of the named plaintiff's own substantive claims. If not, and the plaintiff's claims can be extinguished before notice is sent and opt-in plaintiffs have joined the action, then the case cannot proceed once an offer of settlement has been made because the action is no longer a live case or controversy. But, if the plaintiff does have such an independent procedural right, then the case can proceed, even if the named plaintiff's claims are no longer "live." (16) Courts throughout the United States have looked to Rule 23 and its interpretive precedent in determining the FLSA collective action mootness issue. (17)

The Relatedness of Rule 23 Class Actions

Fed. R. Civ. P. 23 is the procedural mechanism for class action litigation in federal court. (18) The justifications for class action litigation were explained by the Supreme Court in Deposit Guaranty Nat'l Bank v. Roper, 445 U.S. 326 (1980), in which the Court held that the class mechanism is useful because it allows a multitude of aggrieved individuals to obtain relief when small, individual suits may be ineffective or impractical. (19) Additionally, in United States Parole Comm'n v. Geraghty, 445 U.S. 388 (1980), the Supreme Court explained that Rule 23 was also developed to protect defendants from inconsistent obligations, and so that defendants could ostensibly keep litigation costs lower by defending one action instead of many. (20)

With that basic understanding of Rule 23 in mind, similar to a collective action under [section]216(b), a representative plaintiff must move for certification of the proposed class before the case proceeds on the merits. (21) Therefore, the Geraghty Court explained that in the Rule 23 context, the named plaintiff "presents two separate issues for judicial resolution. One is the claim on the merits; the other is the claim that he is entitled to represent a...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT