Getting Away with Wage Theft

The 1938 Fair Labor Standards Act (FLSA), which ushered in many of the worker protections we enjoy today, was a major progressive victory. But as the century that followed it shows, it was by no means the end of the struggle to get workers treated fairly. Employers, aided by conservatives in the executive and judicial branches, have often found ways of ensuring these laws are not fully enforced. Symczyk v. Genesis Healthcare Corp., which the Supreme Court considered yesterday at oral argument, presents another case in which conservatives on the Supreme Court might erect a barrier making FLSA harder to enforce.

The case involves a lawsuit filed by Laura Symczyk, who alleged that Genesis Healthcare had committed wage theft against her and her co-workers. According to Symczyk, Genesis routinely docked the pay of workers (including herself) for lunch breaks that were not taken. Reflecting the strength of her claim, Genesis offered her $7,500 plus associated fees to settle. Symczyk, however, rejected the offer, believing that she was suing not just for herself but for her co-workers. She wanted time for her lawyers to determine if her case could be brought as a class-action suit, representing all the victims of wage theft at Genesis.

When Symczyk refused to accept the offer, however, Genesis sought to get her lawsuit dismissed before a decision about a class-action suit could be made. The company argued that because the offer would have satisfied Symczyk's claims, the lawsuit should be dismissed as "moot" (that is, because the courts lack jurisdiction due to the case having been dismissed). Because Symczyk did not see the offer as resolving the potential collective dispute, however, she argued that the offer did not render the case moot. Moreover, since under the federal Rules of Civil Procedure an offer that is not accepted within 40 days is considered withdrawn, it would be perverse to argue that Symczyk (who has not had any of her claims redressed) has no ongoing stake in the litigation.

If the Supreme Court accepts Genesis's arguments, it would provide a road map for corporations that desperately want to avoid class-action suits. Corporations can simply make offers to settle relatively modest individual claims, and even if plaintiffs selflessly choose not to accept, merely making an offer can preempt a class-action lawsuit.

To accept Genesis's argument, which is not compelled by either the Constitution or by any statute, would have disturbing implications. As I argued with respect to the legal arguments over a class-action suit against Wal-Mart's pervasive gender discrimination, class-action lawsuits are absolutely critical. Many workers who have their rights violated lack the knowledge or resources to pursue claims and can also be subject to intimidation. And while wage theft can at least be proved in an individual case, claims of racial or gender discrimination often require more systematic evidence than any individual case can provide, making preemptive settlements even more likely to undermine the law.

Conditions in the health-care industry provide a particularly compelling case against building new, judicially created barriers to class-action lawsuits. As the National Women's Law Center and the Service Employees International Union point out in a joint statement about the case, "[w]age and hour violations—such as requiring staff to work during meal breaks or to work overtime without compensation—are commonplace in the nursing home industry, where the workers are predominantly women earning near poverty-level wages." It was with this in mind that Symczyk presumably refused to be bought off. The Supreme Court should not create new law in order to deny her co-workers the opportunity of a day in court.

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