The Most Important Case You Haven’t Heard Of. Maybe.

Blog Post by: Moshe Marvit , on April 17, 2013

On Tuesday, the Supreme Court issued a decision that has significant implications for millions of American workers. Or it may have simply “resolve[d] an imaginary question, based on a mistake.”

In a 5–4 opinion, the conservatives on the Court held that a nurse who was required to work through her lunch hour without pay could not continue her case against Genesis Healthcare Corp. The Court’s reasoning is that because the lead plantiff failed to accept—or even respond to—a $7,500 offer from her employer that restored the full amount she was individually owed, she vacated her claim against the company.

Workers’ rights advocates fear that the case, Genesis Healthcare Corp. v. Symczyk, could serve as a roadmap for employers to “pick off” named plaintiffs in wage theft cases and thereby stop collective actions from forming. The Court’s four liberal justices argue in a powerful dissent that the case involves such a remote possibility, readers should “feel free to relegate the majority’s decision to the furthest reaches of your mind.”

The irreconcilable views on the meaning of Genesis Healthcare stem from the fact that the case really had two questions.

  1. Was the nurse’s individual case moot when she rejected the offer made by her employer? The Constitution only permits courts to hear a case with a “controversy,” and the employer argued that when the nurse was made an offer for all of her individual damages, the controversy died. Elon University Law professor Eric Fink said this argument is absurd. “If she didn’t accept the offer, then there’s still something for the courts to decide.” Instead, he sees this as the Supreme Court’s growing animosity toward collective and class actions.
  2. If the individual’s case is moot, can the collective action proceed according to the court’s “relation back” doctrine? This is the more technical of the two issues. The “relation back” doctrine is a legal fiction that allows a court to pretend that the collective action was brought when the individual action was still alive.

The lower courts in this case said yes to the first question. Circuit courts have split on this question, and presumably the Supreme Court accepted the case to resolve that split. However, in a bizarre move based on hyper-technicalities, the Court decided to accept the answer to the first question (that the individual case was moot) and only answer the second question.

In a dissent that calls to mind Justice Scalia’s most pointed writings, Justice Kagan writing for the four liberal justices, effectively refers to the majority’s opinion as a thought experiment. And there is a nerdy form of irony in the fact that a thought experiment would not be a “controversy” that the court could consider. Furthermore, in the moments when she corrects the majority’s premises by explaining that even a first year law student would not make such basic mistakes, she makes clear that it is not even a well-constructed thought experiment. Therefore, the dissent argues, this issue should not have arisen in this case, and it is impossible that it will ever arise in the future.

Despite these reassurances, workers rights advocates are worried. Professor Fink questioned the dissent’s characterization of this case as “the most one-off of one-offs,” saying that “if you accept the majority’s incorrect premise about mootness, then the rest is logically correct. And a number of circuits accept the court’s premise on mootness.”

The practical effect of Genesis Healthcare is uncertain. Professor Janice Fine of Rutgers fears that the decision will have a significant impact on workers abilities to vindicate their rights. Says Fine:

In a period when collective bargaining is in decline and there is an increase of contingent forms of employment, wage and hour claims have become more important than ever.

Fine, who has written extensively about the growing number of workers centers, refers to wage and hour cases as part of the “bread and butter strategy of workers centers.” Many workers centers follow a unique strategy that uses wage and hour cases as part of pressure campaigns to secure rights and make whole workers who are often low wage and not unionized. Wage and hour cases can be combined with organizing, boycotts, and community action to place pressure on employers to reach a settlement with the workers.

Professor Fine says that Genesis Healthcare may affect what have proven to be successful strategies by many workers centers across the country.

Wage and hour claims are important tools in the toolbox for workers centers. They are an important strategy in winning improvements, making employers accountable, and in showing that workers centers are representatives of many low wage workers . . . kicking out this leg is really problematic.

Business groups are already salivating at what they see as a significant shifting of the balance of power away from workers. As Lyle Denniston noted in SCOTUSblog, the conservative National Federation of Independent Business issued a statement shortly after the decision was released stating that the case

has significant implications for small-business owners, who are disproportionately impacted by costly wage and hour lawsuits. . . . The ruling today is a victory for small businesses because it will make it easier to stop frivolous lawsuits before they become multi-million-dollar affairs.

According to Professor Fink, “this case has created an interesting game of chicken,” where employers may rush to make offers that expire quickly to weed out plaintiffs before they can build out a class. By doing so, individual workers would be in the untenable position of accepting the offer and making their collective action moot or rejecting the offer and making their collective action moot.

Professor Fine said that she’d prefer not to wait to see if Genesis Healthcare has the effects of hurting workers’ collective action, and suggested that Congress act. “There is a Hoffman fix in the Senate immigration bill,” she said referring to Hoffman Plastics, the 2002 Supreme Court case that held that the National Labor Relations Board lacked authority to order back pay to undocumented workers who fired on the basis of union activities. “Perhaps Congress can also fix this case in the immigration bill.”

Tags: workers, wage and hour, scotus, marvit,

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