Supreme Court Holds That Plaintiff Whose Individual Claims Were Mooted By An Offer Of Judgment Lacks Standing To Maintain FLSA Collective Action

Keywords: Deposit Guaranty Nat'l Bank v. Roper, Fair Labor Standards Act, Genesis Healthcare Corp. v. Symczyk, Greisz v. Household Bank (Ill.) N.A., McCauley v. Trans Union L.L.C., O'Brien v. Ed Donnelly Enters. Inc., offer of judgment, Second Circuit, Seventh Circuit, Weiss v. Regal Collections

The Fair Labor Standards Act of 1938 ("FLSA") permits an employee to file a "collective action" for damages against an employer individually and on behalf of other "similarly situated" employees who later choose to join the lawsuit. 29 U.S.C. § 216(b). In Genesis Healthcare Corp. v. Symczyk, before any other employee had opted to join the suit, the defendant made an offer of judgment to the named plaintiff for the full relief sought by her individual claims. Today, the Supreme Court held—by a 5-4 vote—that the district court had properly dismissed the FLSA collective action for lack of standing. Writing for the majority, Justice Thomas explained that once the offer of judgment had mooted the named plaintiff's individual claims: "A straightforward application of well-settled mootness principles compels" the conclusion that the entire action "became moot, because she lacked any personal stake in representing" other employees, and thus there no longer was any "case or controversy" for decision, as required by Article III of the U.S. Constitution.

The court of appeals had reversed the dismissal, reasoning that to allow the defendant to "pick off" the named plaintiff with an offer of judgment before the collective action could be certified would "frustrate" the goals of FLSA collective-action provisions. In the Supreme Court, the majority rejected this argument because it rested on distinguishable cases involving class actions. In those cases, the majority explained, either it would be impossible for any other class member to pursue claims for injunctive relief if the class action were dismissed (because of the claims' transitory nature) or the putative class already had acquired "independent legal status" before the offer of judgment was made. Neither is true of an FLSA collective action for damages that no other employee had yet joined.

The plaintiff also had relied on a statement in Deposit Guaranty National Bank v. Roper, 445 U.S. 326 (1980), criticizing the use of offers of judgment to "pick off" the named plaintiff in a class action before class certification. But the majority explained that Roper's holding turned on the fact that the plaintiff in...