Supreme Court Endorses Dismissal of FLSA Collective Action for Lack of Subject Matter Jurisdiction After Full-Value F.R.C.P. 68 Offer

Pick Off Attempt

Pick Off Attempt (Photo credit: Rich Anderson)

In a ruling with broad implications for employers facing federal wage & hour collective actions, the U.S. Supreme Court held that an FLSA collective action was properly dismissed for lack of subject matter jurisdiction, where the lead plaintiff ignored the employer’s offer of judgment under Federal Rule of Civil Procedure 68.  Genesis Healthcare Corp., et al. v. Symczyk, No. 11-1059, 569 U.S. __ (April 16, 2013).

Plaintiff brought a collective action under the Fair Labor Standards Act (“FLSA”), and Genesis Healthcare Corp. promptly made an offer of judgment under F.R.C.P. 68.  The District Court found that the Rule 68 offer fully satisfied plaintiff’s claim and that no other individuals had joined her suit, and it dismissed the suit for lack of subject matter jurisdiction.  The Third Circuit reversed, explaining that allowing defendants to “pick off” named plaintiffs before certification with calculated Rule 68 offers would frustrate the goals of collective actions.

A 5-4 majority of the Supreme Court (led by Justice Thomas) disagreed, concluding that:

Reaching the question on which we granted certiorari,we conclude that respondent has no personal interest in representing putative, unnamed claimants, nor any other continuing interest that would preserve her suit from mootness. Respondent’s suit was, therefore, appropriately dismissed for lack of subject-matter jurisdiction.

You can read more here.

By CHARLES H. JUNG

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