U.S. Supreme Court rules against nurse in wage-and-hour case

(Reuters) A nurse who sued her employer for unpaid wages could not seek to press her case on behalf of similarly treated but yet-to-be-identified workers once the care facility where she worked offered to settle her claim, rendering it moot, the U.S. Supreme Court ruled on Tuesday.

The 5-4 decision, split along the court’s ideological fault lines, will likely have limited practical applicability but could spark further debate about whether the justices treat collective actions brought under the 1938 Fair Labor Standards Act (FLSA) differently from traditional class actions.

In Genesis Healthcare Corp v. Laura Symczyk, the justices found that the case against the nursing and rehabilitation provider should be dismissed because its offer to Symczyk of the unpaid wages to which she alleged she was entitled effectively ended her stake in the case.

“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,” Justice Clarence Thomas wrote for the majority.

The lawsuit began when Symczyk, then a registered nurse at Philadelphia’s Pennypack Center, sued parent company Genesis Healthcare Corp, alleging that 30 minutes of break time were subtracted per worked shift even though employees performed tasks during that time.

Genesis offered Symczyk a “Rule 68” settlement of $7,500 to cover the sought unpaid wages, plus reasonable attorneys’ fees and costs. After Symczyk did not respond to the offer, Genesis filed a motion to dismiss because, it argued, it had offered to settle her individual claim, making her stake in the lawsuit moot, and no other employees had signed on as plaintiffs.

Rule 68 of the Federal Rules of Civil Procedure is designed to encourage settlements.

In wage-and-hour claims brought under FLSA, similarly situated workers must proactively opt in to be covered by a collective action. In traditional class actions, the inclusion of similarly treated members of a class is presumed.

Symczyk’s attorneys said that Genesis was trying to “pick off” the lead plaintiff in what could become a larger collective action lawsuit over unpaid wages once other workers were identified.

“A BOILING DISPUTE”

A district court sided with Genesis and dismissed the case. The 3rd U.S. Circuit Court of Appeals reversed. Though the three-judge panel found that Symczyk’s individual claim had been satisfied, it said Rule 68 was not meant for strategic use in picking off lead plaintiffs.

The Supreme Court disagreed with the 3rd Circuit panel, finding that though Symczyk had the authority under FLSA to pursue collective relief on behalf of similarly affected employees, her role in the case became moot once her claim was satisfied.

Justice Elena Kagan, in a dissenting opinion for the minority, assailed the majority for failing to consider the underlying question of whether Symczyk’s lack of response to the settlement offer rendered her claim moot.

“So, a friendly suggestion to the Third Circuit: Rethink your mootness-by-unaccepted-offer theory. And a note to all other courts of appeals: Don’t try this at home,” Kagan wrote.

J. Timothy McDonald, a Thompson Hine partner who was not involved in the case, said Wednesday’s decision would likely “add fuel to a boiling dispute” over to what extent class action principles can be applied to FLSA collective action cases.

The Supreme Court two years ago in Wal-Mart Stores Inc v. Dukes, in a boon for employers, limited the type of classes that can be certified for the purposes of bringing a class action to those who had truly similar experiences.

“In today’s decision, the majority – which is constituted by justices in the majority in Dukes – notes that there are ‘significant differences’ between the two, but stops far short of saying that (class action) cases like Dukes have no applicability to FLSA collective actions,” McDonald said.

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