On July 8, 2013, the US District Court for the Eastern District of New York issued a decision in Velasquez v. Digital Page, Inc., holding that a collective FLSA wage and hour action was not rendered moot because the defendants made a pre-trial offer of judgment under Rule 68 of the Federal Rules of Civil Procedure (FRCP), which the plaintiffs rejected. The district court distinguished Velasquez from the recent US Supreme Court decision in Genesis Healthcare Corp. v. Symczyk, dismissing a similar case after a plaintiff's non-acceptance of a judgment offer extinguished her personal interest in the case.

Plaintiffs Noel Velasquez and Carlos Rivera commenced a wage and hour action against defendant employers seeking overtime compensation under the FLSA for themselves and for a class of similarly situated persons. Shortly after commencement of the suit, the defendants made a Rule 68 offer of judgment to the plaintiffs. The plaintiffs rejected the offer, and the defendants sought dismissal. The district court denied the motion to dismiss.

Shortly thereafter, the US Supreme Court held in Genesis that a plaintiff in an FLSA collective action no longer had a personal interest in representing her claims after she similarly failed to accept a Rule 68 offer of judgment. The case was dismissed. (For more information about the Genesis decision, see Legal Update, Supreme Court: FLSA Collective Action Properly Dismissed after Plaintiff's Individual Claims Are Rendered Moot.)

In light of the Supreme Court's decision, the defendants in Velasquez asked the district court to reconsider their earlier motion to dismiss, arguing that the plaintiffs' case must now also be dismissed as moot, per Genesis.

The district court denied the defendants' request to reconsider their motion to dismiss, finding that Genesis was non-dispositive. The court found that:

In light of what the district court characterized as a narrow holding, the Supreme Court's holding in Genesis was found non-dispositive to the issue in Velasquez.

The district court further clarified the role Genesis may play in future procedural hearings of FLSA collective actions, which the Supreme Court found differed from class actions under Rule 23 of the FRCP. The Supreme Court's decision also did not necessarily allow plaintiffs to proceed where defendants' judgment offers were simply "pick off" attempts to disrupt class-action proceedings.

The Velasquez decision indicates how some courts may read the Supreme Court's holding in Genesis narrowly, and find it non-dispositive on the issue of mootness when a Rule 68 offer is made in an FLSA collective action.