Not Worth Fighting Over?

By Andy Volin

In wage and hour disputes, sometimes an employer would rather just pay a claim instead of fighting it. Maybe the claim is only worth several hundred dollars and attorney’s fees would be a far greater expense. Or maybe not only is the claim small, but the plaintiff claims the dispute should be enlarged into a collective action on behalf of a class of employees, making a mountain out of a molehill. In this situation, some employers have made offers to settle the case at the outset for the full relief the individual plaintiff is seeking, using what is known as a Rule 68 Offer of Judgment. Regardless of whether the offer was accepted or not, employers have argued that the fact they made the offer meant there was no longer any controversy, and so the case should be dismissed as moot.

The Supreme Court’s ruling yesterday explained that this strategy will not work. An unaccepted offer does not make the case moot. Campbell-Ewald Co. v. Gomez, No. 14-857 (Jan. 20, 2016). This ruling should not come as a surprise, as it follows reasoning expressed in a 2013 Supreme Court case. Still, the decision gives employers reason to hope, if they tweak the strategy. Instead of merely making an offer under Rule 68, what if the employer pays the total amount claimed by the plaintiff, either directly to an account in the plaintiff’s name, or to the court involved? In this situation, the employer might still argue the case is moot. The Supreme Court majority expressly declined to rule on this strategy, but the dissenting opinions directly stated it would work.