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Supreme Court Ruling Doesn’t Yet Serve as a Bar to Wage Claim Class Actions

 

Even a Supreme Court ruling can have little practical effect when lower courts consider the individual cases before them. Last year, the Supreme Court ruled in Genesis HealthCare v. Smyczyk that an opt-in collective action brought under the federal Fair Labor Standards Act (FLSA) was moot. The Court made this ruling on the assumption that an offer made by the defendant to the plaintiff for “complete relief” rendered the plaintiff’s claim moot, despite the fact that the plaintiff chose not to accept the offer.

The Court’s ruling comes as a blow to all plaintiffs filing FLSA cases, which mostly deal with wage and hour violations. Because the decision blocked the claims of all of the plaintiffs involved in the collective action, it is particularly detrimental to all other collective actions and class actions (which are similar to collective actions). Such actions deal with large numbers of plaintiffs who may have small individual sums which are not worth pursuing in a court of law on their own. Together however, they may make up significant sums. Collective actions and class actions are frequently used to bring to justice companies who are using illegal means to take advantage of large groups of people.
Justice Kagan wrote the dissenting opinion on behalf of herself and the three other judges who disagreed with the majority rule. Kagan wrote that “[a]s long as the parties have a concrete interest, however small, in the outcome of the litigation, the case is not moot. … [A] case becomes moot only when it is impossible for a court to grant any effectual relief whatever to the prevailing party.”

Justice Kagan also noted that Rule 68, the rule regarding proceedings after an offer has been made and rejected, “prohibits a court from considering an unaccepted offer for any purpose other than allocating litigation costs – including for the purpose of entering judgment for either party.”

Kagan further points out that the Supreme Court’s ruling in Genesis may have little practical effect and, at least in the 9th Circuit Court, that appears to have been the case. Although circuit courts across the country are divided over this issue, the 9th Circuit Court, while admitting the controversy, has just ruled in favor of the plaintiff in a recent class action lawsuit. The case, Diaz v. First American, also involved an offer which First American made to Diaz after her claim for class certification was denied. Diaz refused the offer but, because of the offer’s existence, the trial court dismissed Diaz’s claims as moot, in line with the Supreme Court’s ruling. Diaz appealed, arguing that the offer had not provided “complete relief” and that, even if it did, it did not affect her claim. She further asserted that her remaining claims could not be rendered moot because she “retained a personal stake in appealing the denial of the class certification.” The 9th Circuit Court agreed and ruled in her favor. Thanks to this ruling, her individual case, as well as the class action, can move forward.

This demonstrates the fact that, even after a decisive ruling made by the Supreme Court, lower courts still have significant room for interpretation with each unique case that they handle. If courts continue to render decisions in line with Kagan’s dissent, the Supreme Court’s majority ruling in Genesis will be the one that is rendered moot.


The Chicago overtime lawyers at the Chicago Overtime Law Center are investigating potential unpaid overtime claims against large corporations, franchisors and their franchisees such as Burger King, Wendy’s, Walmart, K-Mart, Sears, Jackson Hewitt, H&R Block and other corporations for claims for non-management employees for misclassifying employees as managers, erasing or altering time sheets or time records, failing to pay for breaks, pressuring workers not to report or record overtime, and otherwise failing to pay workers for overtime and other wages. If you are the victim this practice call us at (312) 869-4095 or contact us online.

The Illinois overtime attorneys at the Chicago Overtime Law Center have decades of experience fighting for wage earner’s rights. We have a team of overtime attorneys who focus on nationwide class action lawsuits and work out of Chicago and Oak Brook offices and prosecute claims for workers all over the Chicago area including Wheaton and Naperville. We protect unpaid workers who haven’t received overtime throughout the Chicago area including in DuPage, Kane and Cook Counties.

Our Elmhurst and Glenview overtime lawyers are intimately familiar with the issues that arise during wage claim litigation, and we know the laws that govern overtime cases well. Many employers misclassify employees as being exempt from overtime laws and pay workers salaries instead of hourly wages in order to avoid paying them overtime. Some employers mistakenly classify employees as exempt and others intentionally do so in order to circumvent the law. In either case, workers do not receive the wages they should, and a lawsuit may be the only way to recover their earned wages.

The Chicago Overtime Law Center is based in Chicago, and represents clients throughout the country who have not been paid for the overtime hours that they worked. If you believe that you are owed overtime wages, contact one of our Chicago class action attorneys by phone at (312) 869-4095 or through our online form.