Employers Can “Pick Off” Plaintiffs to Defeat a Federal Wage & Hour Collective Action

By Robyn McKibbin, Esq.

Plaintiff Laura Symczyk sued her employer on behalf of herself and “other employees similarly situated” alleging the company automatically deducted 30 minutes of time per shift for meal breaks even when the employees performed compensable work in violation of the Federal Labor Standards Act (“FLSA”). The employer offered Symczyk $7,500 for her alleged unpaid wages plus attorney’s fees and costs, as determined by the court. Symczyk was given ten days to accept the offer. After Symczyk failed to respond in the allotted time, the employer filed a motion to dismiss.

When the settlement offer was made, no other plaintiff had joined the lawsuit and Symczyk admitted that the settlement offer would have fully satisfied her claims. Pursuant to a Federal Rule of Civil Procedure, the District Court held Symczyk’s claim was moot and dismissed the case. The Court of Appeals agreed that the plaintiff’s individual claims were moot but reinstated her collective action claims and reasoned that the defendant’s attempt to “pick off” the named plaintiff could frustrate the goals of collective action.

Because Symczyk did not challenge the mootness of her individual claims before the Supreme Court, the Supreme Court “assume[d], without deciding” that Symczyk’s individual claims were moot and held she had no “personal interest” left to represent other employees, thus, could not pursue the suit.

Courts of Appeal are split on whether an unaccepted offer of settlement moots the viability of a plaintiff’s collective claim. The decision leaves important questions unanswered for both employees and employers but shows the Supreme Court’s growing intolerance for class actions.

Will California follow suit, show support for small businesses, and make it easier to stop frivolous class actions?