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Labor: The Genesis Healthcare decision and its impact on FLSA collective actions

Companies can moot plaintiffs’ claims by offering full relief

Wage-and-hour collective action lawsuits brought by current or former employees under the Fair Labor Standards Act (FLSA) have become a source of massive concern for employers over the last several years, and with good reason. These FLSA collective action lawsuits enable a single employee to file a claim on behalf of not only herself, but also all other “similarly situated” employees, thereby drastically increasing both the scope of potential liability and litigation costs for employers targeted with such claims.

Employers thus have a vested interest in nipping these types of suits in the bud, and some employers have done so (with varied success) in the past by making offers to fully remedy the named plaintiff’s alleged FLSA damages at the beginning of the litigation process in order to deprive the plaintiff of any personal stake he or she may have in the case. This result, in turn, can require the dismissal of the collective action claims in the lawsuit as being moot. Plaintiffs’ lawyers typically have objected strenuously to such a defense strategy, on the grounds that employers should not be permitted to moot collective action allegations by “picking off” the individually-named plaintiffs by way of such early-stage offers.

Contributing Author

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William J. Tarnow

William J. Tarnow II is chair of Neal, Gerber & Eisenberg’s Labor & Employment Practice Group and represents and counsels companies and management...

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Contributing Author

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Judith Kong

Judith Kong practices in Neal, Gerber & Eisenberg’s Labor & Employment Practice Group. She focuses her practice on unemployment insurance,...

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