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May 06, 2013
Supreme Court: Important ruling regarding class action cases filed under FLSA

The Supreme Court recently issued an important ruling regarding class action cases filed under the Fair Labor Standards Act (FLSA). In class actions under FLSA, members who want to join the suit must opt in. By contrast, in civil rights class action suits, like the one against Walmart now referred to as Dukes, all similarly situated employees are included unless they choose to opt out.

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It’s an important difference, which can have a huge impact on what happens to the suits. Here’s the background on the case the high court ruled on, Genesis HealthCare Corp. et al. v. Symczyk, No. 11-1059 (4/16/13). Like Walmart, Genesis is a nationwide corporation operating thousands of facilities.

The plaintiff, Laura Symczyk, was a nonexempt registered nurse at a Philadelphia nursing home. That facility automatically deducted 30 minutes from the work time of nonexempt employees for their meal break (we don’t know if that is a common or universal practice throughout Genesis). Contending that she was usually unable to take the full break, Symczyk sued Genesis in 2009 for back pay, filing the suit on behalf of all nurses, secretaries, housekeepers, respiratory therapists, and nurses’ aides—a class of similarly situated employees. Whether she intended to include employees beyond the Philadelphia facility is unclear.

Very promptly after learning of the suit, Genesis offered Symczyk $7,500, which it felt would cover her back pay for the missed meal breaks, attorney’s fees, and other costs. Plaintiffs have 14 days to respond to such an offer, and Symczyk never replied. Again, Genesis moved promptly; it went to federal district court, asking that the suit be dismissed. Acknowledging that no other employees had joined the suit, and the plaintiff had ignored the settlement offer, the judge agreed to dismiss it, reasoning that the court had no subject matter jurisdiction over the case.

Symczyk appealed to the U.S. Court of Appeals for the 3rd Circuit, which covers Delaware, New Jersey, and Pennsylvania. Appellate judges disagreed with the lower court: Citing their own similar rulings in earlier cases, they ruled that defendants like Genesis shouldn’t be allowed to frustrate the remedial purpose of the FLSA by paying off individual plaintiffs before a class could be formed. Genesis appealed to the Supreme Court.

The justices split 5-4. With most of their positions made clear when they first heard arguments on the case, the conservative justices ruled that Symczyk had no case, overcoming the contrasting votes of the four more liberal justices. Although the ruling was sought to resolve a long-standing split among both federal district and federal appeals courts, it isn’t as clear as it might be.

For example, the justices refused to rule on whether Symczyk’s case was “moot,” or no longer relevant, because Genesis had tried to settle with her and there were no other plaintiffs, by the time it reached the 3rd Circuit. That’s because Symczyk dropped that issue before going to the 3rd Circuit.

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