December 14, 2012
Oral Argument in Genesis Healthcare Corp. v. Symczyk
Last week, the Court held oral argument in Genesis Healthcare Corp. v. Symczyk, a Fair Labor Standards Act case. The issue is whether FLSA defendants can moot cases that might otherwise become collective actions by offering the initial named plaintiff all the relief that she could potentially receive – here, back pay, liquidated damages, and attorneys’ fees. In this case, Genesis made Symczyk an offer of judgment under FRCP 68 shortly after she filed her complaint; Symczyk did not accept the offer of judgment (a fact that seems not to have been brought to the Court’s attention until after cert. was granted), but the district court nonetheless held that the case was moot.
It has long been established that defendants cannot defeat class actions by picking off named plaintiffs. However, FLSA “collective actions” require class members to opt in in writing after the complaint is filed. (This is the result of a 1947 amendment to the FLSA that was motivated by Congress’s sense that labor unions, among others, were stirring up litigation unnecessarily by bringing class actions against employers.) Thus, the question is what happens when the defendant makes an offer of judgment between the date the complaint is filed and the date that additional plaintiffs opt in. The Third Circuit, in an opinion by Judge Scirica, answered this question by drawing inspiration from the class action context, and instructing district courts to allow timely motions for conditional certification of FLSA actions to relate back to the date of the original complaint. The Third Circuit stressed that the alternative would allow defendants to avoid ever having to face a collective action, while allowing the statute of limitations to run on the potential claims of other similarly situated employees.
At oral argument, many of the justices seemed skeptical of Genesis’s Article III mootness argument, instead viewing the case as presenting either a statutory issue about the procedure intended by Congress, or else an issue about how district courts ought to exercise their inherent discretion as they manage these cases. For example, Justice Roberts suggested that district court judges could just avoid ruling on a suggestion of mootness until after they rule on conditional certification. Similarly, Justice Alito wondered whether plaintiffs who had been presented with an offer of judgment were entitled to a hearing on the adequacy of the offer, apparently implying that the putative collective action could proceed while the parties were awaiting that hearing.
Two additional points of potential interest: First, there was some discussion of the effect of last Term’s decision in Knox v. SEIU Local 1000, in which the Court rejected a mootness argument based on the union’s post-cert. offer to reinstate the district court’s decision for the plaintiffs. Counsel for Genesis argued that Knox was distinguishable based on the fact that those plaintiffs sought prospective relief, whereas Symczyk was entitled only to damages and attorneys’ fees. (Justice Scalia suggested that Knox might be more broadly distinguishable on slightly different grounds.) Thus, it seems likely that this case will provide the Court an opportunity a chance to elaborate on that aspect of Knox. Second, the Solicitor General, arguing in support of Symczyk, began his argument by invoking freedom of contract – specifically, the freedom to reject a settlement agreement, even if it offers all the relief to which one might be entitled, and choose to litigate instead. This led to a lengthy exchange about the difference between qualifying injuries for purposes of Article III and meritorious claims under the FLSA. Here, the SG offered a defense of collective FLSA actions based on Congress’s judgment that low-wage, nonunion employees have a legitimate interest in banding together to enforce their rights. While this point did not seem to immediately gain traction with the justices, employee solidarity in the non-union context seems to imbue this case – otherwise, it would be difficult to explain why Symczyk would have sought to keep this case alive, foregoing the offer of judgment and attendant cash award, rather than taking the money when it was first offered.
December 12, 2012
Recently Published Scholarship
- Criag Robert Senn, Ending Discriminatory Damages, 64 Alabama L. Rev. 187 (2012).
- Ida Danielle Mashburn-Myrick, Giving "The Help" the Silent Treatment: How Alabama's New Immigration Law Punishes Domestic Workers, Ignores Certain Employers, and Shortchanges Us All, 64 Alabama L. Rev. 443 (2012).
- Parker Graham, Whistleblowers in the Workplace: The Government Employee's "Official Duty" to Tell the Truth, 65 SMU L. Rev. 685 (2012).
- Molly E. Whitman, The Intersection of Religion and Sexual Orientation in the Workplace: Unequal Protections, Equal Employees, 65 SMU L. Rev. 713 (2012).
December 11, 2012
The Supreme Court's Kloeckner Decision
Yesterday, the Supreme Court issued a decision in Kloeckner v. Solis. This case involved the procedures by which federal employees can challenge "mixed cases" under the Civil Service Reform Act. A mixed case is a discrimination action that is appealable to the MSPB. The Eighth Circuit had held that such cases are appealable only to the Federal Circuit (which had held the same in an earlier case), but the Supreme Court disagreed in an unanimous decision.
I won't get into the technical aspects of the decision, which interpreted various provisions of the CSRA. But the upshot is that when the MSPB rejects an employee's mixed case claim, then the next avenue for challenge is the relevant federal district court--not the Federal Circuit, which hears most other MSPB appeals. This is true whether the MSPB dismissed the appeal for substantive or for procedural reasons.
It's great that the Supreme Court clarified this issue. I hope that there are future cases along these lines; as a former clerk on the Federal Circuit, I can personally (and painfully) attest to the fact that the procedures involved with federal employee cases, especially when discrimination is alleged, are incredibly confusing.
Congratulations to Eric Schnapper (U. Washington), the long-time Supreme Court advocate who successfully argued the case for Kloeckner.
December 10, 2012
Maybe Systemic Disparate Treatment Isn't Dead Yet?
Wal-Mart was obviously a major blow to the systemic disparate treatment theory, radically curtailing efforts to use that approach in private class actions. There's also more than a hint that in the majority opinion that the substantive theory is questionable, despite its pedigree in Teamsters and Hazelwood. But to test that out, it seems clear that the only available forum is a government suit, most likely by the EEOC. The possibility of that happening was increased earlier this month when the Sixth Circuit decided Serrano v. EEOC.
The case started life as an class action filed by the woman who had originally filed a charge with the agency. While class certification was denied, the EEOC intervened and, although Ms. Serrano settled her claim, sought relief for a class of female employees.
The agency's efforts didn't fare well at the district court, which not only dismissed all the claims but granted attorneys' fees and costs to the employer. The basis of the dismissal was that the EEOC could not bring a pattern and practice claim on the basis of an individual charge under section 706 of the statute but only on the basis of a pattern or practice suit under section 707 (although the court also found that the agency had failed to properly plead the pattern or practice claim).
The circuit court panel held that a pattern or practice violation could be prosecuted on the basis of a 706 charge. I won't explore the reasoning because the result is more important, but it does seem that the whole issue could have been avoided by the Commission filing its own 707 claims (either in the Serrano litigation or in a separate action that could then be consolidated). That would have avoided the statutory authorization question and, if adequately supported, satisfied the pleading requirements that bothered the dissenting judge. Admittedly, however, a 707-only suit might have more limited remedies.
But what is surprising about the opinion is the failure of the EEOC to be explicit in its pleading about asserting a Teamsters case. To find the pleading sufficient, the majority looked to Swierkiewicz, whose authority is at least questionable, concluding that the EEOC complaint "although not a model of good lawyering," sufficed. Although the dissent agreed with the majority that Teamsters did not have to be explicitly invoked, but she found not "even a shred of an allegation suggesting a pattern-or-practice claim."
This is all more than a little disturbing. Now that the EEOC has pretty much a monopoly on pursuing systemic disparate treatment claims, it is more important than ever that it be that model of good lawyering. While the Commission escaped a fee award (and the court stressed that such an award would probably have been inappropriate even had the defendant prevailed), it can scarcely be confident that it will meet so generous a reading of its pleadings the next time around.