Entry of Judgment Proper After Rule 68 Offer in FLSA Collective Action: SDNY | Practical Law

Entry of Judgment Proper After Rule 68 Offer in FLSA Collective Action: SDNY | Practical Law

In Socorro Maximo v. 140 Green Laundromat, et al., the US District Court for the Southern District of New York held that in a Fair Labor Standards Act (FLSA) overtime action, the employer's Rule 68 offer of judgment is a complete offer of relief under the FLSA where the plaintiff stipulated to the amount of overtime due and no other putative collective action members had opted in or submitted an affidavit in favor of conditional certification.

Entry of Judgment Proper After Rule 68 Offer in FLSA Collective Action: SDNY

Practical Law Legal Update 0-617-3706 (Approx. 6 pages)

Entry of Judgment Proper After Rule 68 Offer in FLSA Collective Action: SDNY

by Practical Law Labor & Employment
Published on 21 Jul 2015 • USA (National/Federal)
In Socorro Maximo v. 140 Green Laundromat, et al., the US District Court for the Southern District of New York held that in a Fair Labor Standards Act (FLSA) overtime action, the employer's Rule 68 offer of judgment is a complete offer of relief under the FLSA where the plaintiff stipulated to the amount of overtime due and no other putative collective action members had opted in or submitted an affidavit in favor of conditional certification.
In Socorro Maximo v. 140 Green Laundromat, et al., the US District Court for the Southern District of New York held that where the defendant made a Rule 68 offer of judgment for overtime owed to the plaintiff, and the plaintiff stipulated that the amount of overtime is correct, it is a complete offer of relief under the FLSA. The court also explained that no "additional procedural complications" prevented the entry of judgment under Rule 68 because no other putative collective action members had opted in or submitted an affidavit in support of the plaintiff's motion for conditional certification. For those reasons, the court could enter judgment with or without the plaintiff's consent. (No. 14-6948, (S.D.N.Y. July 7, 2015).)

Background

Socorro Maximo was employed as a laundress by 140 Green Laundromat for approximately one year. Maximo claims that:
  • Certain weeks, she worked seven days a week for 56 hours.
  • She was never compensated for overtime.
  • Other laundresses were also never compensated for overtime.
In her affidavit in support of her motion for conditional certification, Maximo identifies only the first names of ten other laundresses, but suggests that there may be other similarly-situated individuals. However:
  • No one else opted in to the collective action (as of the date of this decision).
  • No other putative collective action member submitted an affidavit in support of the motion for conditional certification.
Maximo filed a complaint and moved for conditional certification of a collective action. Based on its estimate that the plaintiff was owed $1,664 in overtime pay, 140 Green Laundromat:
Maximo's response included a stipulation that she was due $1,664 in overtime pay under the FLSA, but argued that the defendant had largely underestimated the amount she was entitled to under state law.
Based on the plaintiff's stipulation, 140 Green Laundromat requested that the court (if it did not dismiss the action as moot):
  • Enter judgment against 140 Green Laundromat on Maximo's FLSA claims for $3,328 (twice the amount of overtime pay owed under the FLSA).
  • Decline supplemental jurisdiction over Maximo's remaining state-law claims.

Outcome

The SDNY held that where a defendant made a Rule 68 offer of judgment of overtime pay owed to the plaintiff and where the plaintiff stipulated that the amount of overtime pay is correct, it is a complete offer of relief under the FLSA. The court explained that no "additional procedural complications" prevented entry of judgment under Rule 68 because no other putative collective action members had opted in or submitted an affidavit in support of the plaintiff's motion for conditional certification.
For these reasons, the court concluded it could enter judgment under the terms of the Rule 68 offer of judgment with or without the plaintiff's consent.
The SDNY noted that:
  • In collective and class action contexts, there is a circuit split on the issue of whether:
    • an offer of judgment under Rule 68 for complete relief moots a named plaintiff's claim; and
    • a named plaintiff can continue to litigate on behalf of the putative class.
  • The law in the Second Circuit however is clear. The court should exercise its discretion to enter judgment against 140 Green Laundromat, disposing of the federal claim.
  • Because Maximo stipulated the amount of overtime pay, there is no dispute between the parties about the amount owed under the FLSA.
  • The FLSA provides for 100% liquidated damages (29 U.S.C. § 216(b)) and 140 Green Laundromat made an offer of judgment of $3,328, double the amount of overtime due. Because Maximo stipulated that the amount of $1,664 is correct, this is a complete offer of relief under the FLSA.
  • No "additional procedural complications" prevent the entry of judgment on Maximo's FLSA claim because no putative collective action member:
    • submitted an affidavit in support of the plaintiff's motion for conditional certification; or
    • opted in to this action.
  • For these reasons, the court concluded that it could enter judgment under the terms of the Rule 68 offer of judgment with or without Maximo's consent (Gonyer v. Vane Line Bunkering, Inc., 32 F. Supp. 3d 514, 517 (S.D.N.Y. 2014)).
  • Having entered judgment on Maximo's federal FLSA claims, the court declined to exercise supplemental jurisdiction over her remaining state-law claims.
  • Finally, unlike its first offer of judgment, 140 Green Laundromat's offer of judgment of $3,328 does not include attorneys' fees and costs. Because as a prevailing party under the FLSA the plaintiff is entitled to that remedy (29 U.S.C. § 216(b)), the court allowed her to file an application for fees and costs related only to her FLSA claim (see Black v. Nunwood, Inc., No. 13 Civ. 7207 (GHW), , at *2-4 (S.D.N.Y. Apr. 30, 2015)).

Practical Implications

Rule 68 offers in FLSA collective actions can be an effective defense strategy. However, employers should understand the utility of Rule 68 offers of judgment in a particular court or jurisdiction. Employers using Rule 68 offers should use caution when calculating the offer amount by analyzing all possible sources of recovery. Offers should specify what the amount includes, such as attorneys' fees and costs.