656 F.3d 189 (3rd Cir. 2011), 10-3178, Symczyk v. Genesis HealthCare Corp.

Docket Nº:10-3178.
Citation:656 F.3d 189
Opinion Judge:SCIRICA, Circuit Judge.
Party Name:Laura SYMCZYK, an individual, on behalf of herself and others similarly situated, Appellant v. GENESIS HEALTHCARE CORPORATION; ElderCare Resources Corporation d/b/a Genesis ElderCare.
Attorney:Gary F. Lynch, Esquire (Argued), Carlson Lynch, New Castle, PA, Gerald D. Wells, III, Esquire, Faruqi & Faruqi, Jenkintown, PA, Attorneys for Appellant. James N. Boudreau, Esquire (Argued), Christina Tellado-Winston, Esquire, Greenberg Traurig, Michele H. Malloy, Esquire, Littler Mendelson, Phila...
Judge Panel:Before: SCIRICA, AMBRO and VANASKIE, Circuit Judges.
Case Date:August 31, 2011
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit
 
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656 F.3d 189 (3rd Cir. 2011)

Laura SYMCZYK, an individual, on behalf of herself and others similarly situated, Appellant

v.

GENESIS HEALTHCARE CORPORATION; ElderCare Resources Corporation d/b/a Genesis ElderCare.

No. 10-3178.

United States Court of Appeals, Third Circuit.

August 31, 2011

Argued March 7, 2011.

Page 190

Gary F. Lynch, Esquire (Argued), Carlson Lynch, New Castle, PA, Gerald D. Wells, III, Esquire, Faruqi & Faruqi, Jenkintown, PA, Attorneys for Appellant.

James N. Boudreau, Esquire (Argued), Christina Tellado-Winston, Esquire, Greenberg Traurig, Michele H. Malloy, Esquire, Littler Mendelson, Philadelphia, PA, Attorneys for Appellees.

Before: SCIRICA, AMBRO and VANASKIE, Circuit Judges.

OPINION

SCIRICA, Circuit Judge.

Laura Symczyk sought relief under the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 207 and 216(b), on behalf of herself and all others similarly situated. The District Court for the Eastern District of Pennsylvania dismissed Symczyk's complaint for lack of subject matter jurisdiction after defendants Genesis HealthCare Corporation and ElderCare Resources Corporation extended an offer of judgment under Fed.R.Civ.P. 68 in full satisfaction of her alleged damages, fees, and costs. At issue in this case is whether a collective action brought under § 216(b) of the FLSA becomes moot when, prior to moving for " conditional certification" and prior to any other plaintiff opting in to the suit, the putative representative receives a Rule 68 offer. We will reverse and remand.

I.

From April 2007 through December 2007, Symczyk was employed by defendants as a Registered Nurse at Pennypack Center in Philadelphia, Pennsylvania. On December 4, 2009, Symczyk initiated a collective action under 29 U.S.C. § 216(b) on behalf of herself and all similarly situated individuals, alleging defendants violated the FLSA when they implemented a policy subjecting the pay of certain employees to an automatic meal break deduction whether or not they performed compensable work during their breaks.1 On February 18, 2010, defendants filed an answer to Symczyk's complaint and served her with an offer of judgment under Fed.R.Civ.P. 68 in the amount of " $7,500.00 in alleged unpaid wages, plus attorneys' fees, costs and expenses as determined by the Court." 2 Symczyk did not dispute the

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adequacy of defendants' offer but nevertheless declined to respond.

The District Court— unaware of the offer of judgment— held a Fed.R.Civ.P. 16 scheduling conference on March 8, 2010. Two days later, the court entered a scheduling order providing for " an initial ninety (90) day discovery period, at the close of which [Symczyk] will move for conditional certification under § 216(b) of the FLSA." Following the court's ruling on certification, the parties were to have " an additional six (6) month discovery period, to commence at the close of any Court-ordered opt-in window."

On March 23, 2010, defendants filed a motion to dismiss for lack of subject matter jurisdiction under Fed.R.Civ.P. 12(b)(1), contending that, because Symczyk had effectively rejected their Rule 68 offer of judgment, see Fed.R.Civ.P. 68(a) (providing a plaintiff with 14 days to accept an offer), she " no longer ha[d] a personal stake or legally cognizable interest in the outcome of this action, a prerequisite to this Court's subject matter jurisdiction under Article III of the United States Constitution." Symczyk objected, citing defendants' strategic attempt to " pick off" the named plaintiff before the court could consider her " certification" motion.3

On May 19, 2010, the District Court " tentatively concluded" that defendants' Rule 68 offer mooted the collective action and that the action should be dismissed for lack of subject matter jurisdiction. Symczyk v. Genesis HealthCare Corp., No. Civ. A 09-5782, 2010 WL 2038676, at *4, 2010 U.S. Dist. LEXIS 49599, at * 17 (E.D.Pa. May 19, 2010). In its memorandum, the court explained:

Symczyk does not contend that other individuals have joined her collective action. Thus, this case, like each of the district court cases cited by Defendants, which concluded that a Rule 68 offer of judgment mooted the underlying FLSA collective action, involves a single named plaintiff. In addition, Symczyk does not contest Defendants' assertion that the 68 offer of judgment fully satisfied her claims....

Id. at *4, 2010 U.S. Dist. LEXIS 49599, at *16-17. The court instructed Symczyk to file a brief in support of continued federal jurisdiction on her state-law claims and her motion for class certification under Fed.R.Civ.P. 23 by June 10, 2010. Id. at *4, 2010 U.S. Dist. LEXIS 49599, at *17. Symczyk did so but conceded she did not believe the court possessed an independent basis for jurisdiction over her state-law claims in the event her FLSA claim was dismissed. The District Court declined to exercise supplemental jurisdiction over Symczyk's state-law claims in accordance with 28 U.S.C. § 1367(c) and dismissed those claims without prejudice. The court also dismissed Symczyk's FLSA claim with prejudice in accordance with its earlier memorandum. Symczyk timely appealed.4

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II.

A.

Enacted in 1938, the FLSA, 29 U.S.C. § 201 et seq., was designed " to aid the unprotected, unorganized and lowest paid of the nation's working population; that is, those employees who lacked sufficient bargaining power to secure for themselves a minimum subsistence wage." Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697, 707 n. 18, 65 S.Ct. 895, 89 L.Ed. 1296 (1945). Under the " collective action" mechanism set forth in 29 U.S.C. § 216(b), an employee alleging an FLSA violation may bring an action on " behalf of himself ... and other employees similarly situated," subject to the requirement that " [n]o employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought."

Prior to 1947, the FLSA permitted an aggrieved employee to " designate an agent or representative to maintain such action for and in behalf of all employees similarly situated." Martino v. Mich. Window Cleaning Co., 327 U.S. 173, 175 n. 1, 66 S.Ct. 379, 90 L.Ed. 603 (1946) (quoting Fair Labor Standards Act of 1938, Pub.L. No. 75-718, § 16(b), 52 Stat. 1060, 1069 (1938)). But in response to " excessive litigation spawned by plaintiffs lacking a personal interest in the outcome," Congress amended the Act to eliminate " representative action by plaintiffs not themselves possessing claims." Hoffmann-La Roche, Inc. v. Sperling, 493 U.S. 165, 173, 110 S.Ct. 482, 107 L.Ed.2d 480 (1989); see also Portal-to-Portal Act of 1947, Pub.L. No. 80-49, § 5(a), 61 Stat. 84, 87 (1947). Further altering the collective action procedure in § 216(b), Congress inserted a requirement that similarly situated employees must affirmatively " opt in" to an ongoing FLSA suit by filing express, written consents in order to become party plaintiffs. See id.

In deciding whether a suit brought under § 216(b) may move forward as a collective action, courts typically employ a two-tiered analysis. During the initial phase, the court makes a preliminary determination whether the employees enumerated in the complaint can be provisionally categorized as similarly situated to the named plaintiff. If the plaintiff carries her burden at this threshold stage, the court will " conditionally certify" the collective action for the purposes of notice and pretrial discovery. In the absence of statutory guidance or appellate precedent on the proper definition of " similarly situated," a divergence of authority has emerged on the level of proof required at this stage. Some trial courts within our circuit have allowed a plaintiff to satisfy her burden simply by making a " substantial allegation" in her pleadings that she and the prospective party plaintiffs suffered from a single decision, plan or policy, but the majority of our circuit's trial courts have required the plaintiff to make a " modest factual showing" that the proposed recipients of opt-in notices are similarly situated.

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See Wright v. Lehigh Valley Hosp., No. Civ. A 10-431, 2010 WL 3363992, at *3-4, 2010 U.S. Dist. LEXIS 86915, at *7-10 (E.D.Pa. Aug. 24, 2010) (canvassing cases).

Under the " modest factual showing" standard, a plaintiff must produce some evidence, " beyond pure speculation," of a factual nexus between the manner in which the employer's alleged policy affected her and the manner in which it affected other employees. See Smith v. Sovereign Bancorp, Inc., No. 03-2420, 2003 WL 22701017, at *3, 2003 U.S. Dist. LEXIS 21010, at *10 (E.D.Pa. Nov. 13, 2003). We believe the " modest factual showing" standard— which works in harmony with the opt-in requirement to cabin the potentially massive size of collective actions— best comports with congressional intent and with the Supreme Court's directive that a court " ascertain[ ] the contours of [a collective] action at the outset." See Hoffmann-La Roche, 493 U.S. at 172, 110 S.Ct. 482.5

After discovery, and with the benefit of " a much thicker record than it had at the notice stage," a court following this approach then makes a conclusive determination as to whether each plaintiff who has opted in to the collective action is in fact similarly situated to the named plaintiff. Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233, 1261 (11th Cir.2008). " This second stage is less lenient, and the plaintiff bears a heavier burden." Id. Should the plaintiff satisfy her burden at this stage, the case may proceed to trial as a collective action.6

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Absent from the text of the FLSA is the concept of " class certification." As the...

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