Laura Symczyk worked as a registered nurse at a retirement home in Philadelphia for 10 months in 2007. She alleges in a lawsuit she filed in 2009 that Genesis HealthCare Corp., the operator of the nursing home, violated the Fair Labor Standards Act (FLSA) by automatically deducting meal breaks from workers’ paychecks regardless of whether they worked during their meal periods. She sought to represent herself and all similarly situated workers at the nursing home. Symczyk claimed she was entitled to about $7,000 in back pay and liquidated damages.
Before Symczyk formally petitioned for class certification, the defendant made an offer of judgment under Federal Rule of Civil Procedure 68, offering to pay Symczyk $7,500 plus attorneys’ fees and costs as determined by the court. Symczyk’s counsel allowed the offer to expire and proceeded forward to discovery in anticipation of class certification.
Genesis challenges an effective strategy corporations have employed to cut off risky class action litigation of wage claims. In those courts that have approved the tactic Genesis used—offering full payment to the named plaintiff before other workers opt into the case—the litigation stops before a class is certified. Although nothing prevents another worker from filing a similar lawsuit on behalf of the same class, the process is iterative—the defendant could immediately offer to pay off the named party in the new case. Meanwhile, each plaintiff needs to come up with a filing fee to initiate the case and find a lawyer willing to take on the claim, which is unlikely to be certified as a class action.