In a 5-4 decision, the U.S. Supreme Court held April 16 that because an employee received an individual settlement offer that fully satisfied her Fair Labor Standard Act claims, her individual and collective action claims could not go forward. The Court said that after her employer made an “Offer of Judgment” for the full amount of her claim, the employee did not have a personal interest in the lawsuit and could not be the representative of the other would-be plaintiffs in the collective action. In order for the plaintiff to represent a class, the Court said, she needed to do more than simply write a complaint with collective action allegations.
Here, the employee had rejected the employer’s offer, and the lower courts disagreed over whether such an “unaccepted offer” meant the collective action could advance. However, the Court’s opinion did not address this point for procedural reasons.
As a result, employers should not get too excited, said Shlomo Katz, counsel at Brown Rudnick LLP and co-author of Thompson’s FLSA publications. “The utility of the Court’s opinion is limited by the fact that Symczyk had conceded mootness and by the fact that no other employee had opted in to Symczyk’s complaint, two factors that might distinguish future cases.” Also, Katz said, employers should note than an informal settlement offer does not have the same impact as a Rule 68 Offer of Judgment. “Notwithstanding, a properly used Rule 68 Offer of Judgment can provide other benefits to defendants including the potential to reduce attorney’s fees,” Katz added.
For a full analysis of the Court’s decision, click here.