A Pennsylvania nurse objected to the practice of a hospital where she worked of automatically deducting a daily 30-minute meal break from the pay of a wide variety of employees—whether or not they worked through break. So she filed a class action lawsuit on behalf of a long list of other kinds of employees she felt were underpaid. Very quickly, the hospital made her a generous offer, which she ignored. But the effect of that offer wasn’t clear.

What happened. “Corbin” worked as a registered nurse at Pennypack Center in Philadelphia, which is operated by Genesis HealthCare Corporation. She was only employed there for 8 months, but Pennypack implemented the new meal break policy during her tenure. In early December 2009, Corbin filed her lawsuit in federal district court, naming at least 27 other job titles whose incumbents in the prior 3 years were potential class members. By mid-February, Pennypack tendered her an offer of $7,500 to settle her individual claims, attorney’s costs, and other fees.

Corbin ignored the offer, and the court moved to schedule discovery and other steps to ‘certify’ the class for trial, with Corbin as lead plaintiff. But Pennypacker pleaded before the judge, saying, in effect, “Hold on: So far you have only one plaintiff, and we’ve made her what we all concede is a fair offer. On that basis, her case is moot, and you no longer have jurisdiction.” The judge agreed and dismissed Corbin’s case. She appealed to the 3rd Circuit, which covers Delaware, New Jersey, and Pennsylvania.

What the court said. Appellate judges began by distinguishing between class action suits brought under the Fair Labor Standards Act (FLSA), in which other plaintiffs must opt in, and such suits under some other laws, in which other plaintiffs are automatically included and may only opt out. They believed that Pennypacker had moved deliberately to “pick off” the only plaintiff in order to save the much greater expenses they might have incurred if other plaintiffs had joined the suit.

And, judges said, while other plaintiffs who do nothing shouldn’t automatically benefit from the actions of one or two, they also shouldn’t be shut out of a case by an employer’s preemptive strike. So they sent the case back to district court, telling it to allow Corbin to seek class certification. Symczyk v. Genesis HealthCare, U.S. Court of Appeals for the 3rd Circuit, No. 10-3178 (8/31/11).

Point to remember: Judges for the 11th Circuit (AL, FL, GA) recently ruled the opposite way in a similar case—that the employer’s fast offer of a settlement before the class had been formed effectively killed the plaintiff’s case.