Nurses Victorious In Appeal Involving Unpaid Wages
Just in time for Labor Day, the Third Circuit Court of Appeals took a step to disarm employers involved in unpaid wage (including unpaid overtime wage and minimum wage) lawsuits. In Symczyk v. Genesis Healthcare Corp., the plaintiff was a registered nurse (RN) who filed a lawsuit to recover wages for herself and for other employees who had break time automatically deducted from their paychecks. Obviously, this was a bad move by the hospital/employer, since they deducted breaks regardless of whether the employees took breaks or not. What the hospital did was to no pay wages to employees even though they worked – based upon a policy of automatically deducting break time from paychecks. Oops.
Before Ms. Symczyk asked the Court to conditionally certify a class pursuant to the Fair Labor Standards Act (“FLSA”) of other RN’s who also had break time automatically deducted from their paychecks and before she could send out notice to the other nurses (employees), the Defendant employer/hospital made an offer to settle her case under Rule 68 of the Federal Rules of Civil Procedure. The offer was to pay Ms. Symczyk in full for all of her damages as an attempt to prevent the lawsuit from going forward for the other hospital employees who were entitled to the wages they earned (but probably didn’t know that they also were victims of wage theft).
As the Third Circuit put it, “At issue in this case is whether a collective action brought under § 216(b) of the FLSA becomes moot when, prior to moving for “conditional certification” and prior to any other plaintiff opting in to the suit, the putative representative receives a Rule 68 offer.”
To reach its ultimate decision, the Third Circuit referred to the origins and history of the FLSA:
Enacted in 1938, the FLSA, 29 U.S.C. § 201 et seq., was designed “to aid the unprotected, unorganized and lowest paid of the nation‟s working population; that is, those employees who lacked sufficient bargaining power to secure for themselves a minimum subsistence wage.” Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 707 n.18 (1945).
The Third Circuit Court then went on to discuss the interplay between Rule 68 offers and their effect (or lack thereof) on class actions filed under Rule 23 and found the situation analogous to FLSA class actions in which a Rule 68 offer is made to the named Plaintiff only.
The Court ultimately determined that an employer/defendant could not “pick off” the named employee/plaintiff by offering the full amount of that person’s claim as a way to prevent a collective action under the FLSA from going forward:
In sum, we believe the relation back doctrine helps ensure the use of Rule 68 does not prevent a collective action from playing out according to the directives of § 216(b) and the procedures authorized by the Supreme Court in Hoffmann-La Roche and further refined by courts applying this statute. Depriving the parties and the court of a reasonable opportunity to deliberate on the merits of collective action “conditional certification” frustrates the objectives served by § 216(b). Cf. Sandoz, 553 F.3d at 921 (explaining “there must be some time for a[n FLSA] plaintiff to move to certify a collective action before a defendant can moot the claim through an offer of judgment”). Absent undue delay, when an FLSA plaintiff moves for “certification” of a collective action, the appropriate course—particularly when a defendant makes a Rule 68 offer to the plaintiff that would have the possible effect of mooting the claim for collective relief asserted under § 216(b)—is for the district court to relate the motion back to the filing of the initial complaint.
This case represents a victory for employees who have been the victims of wage theft and the lawyers who represent them.