Patterson Harkavy Wins in Fourth Circuit for Underpaid Workers

In Simmons v. United Mortgage and Loan Investment, LLC, the Fourth Circuit ruled for plaintiffs and reversed the district court in this wage and hour case.  The plaintiffs are Charlotte-based Junior Asset Managers for a mortgage company who were not paid overtime even though they worked more than 40 hours per week.  They brought claims under the Fair Labor Standards Act (FLSA) and North Carolina Wage and Hour Act (NCWHA) based on the failure to pay overtime.  The primary issue is whether the plaintiffs will be able to pursue their case as a collective and class action on behalf the other underpaid workers at the company.  The defendants tried to short-circuit the collective/class action process by tendering a limited settlement offer before other workers could be notified of the case.  The Fourth Circuit rejected this tactic, finding the settlement too indefinite to moot the case.  The Court remanded the case to the trial court to consider plaintiff’s motion to certify the collective action and plaintiffs’ amendments to the NCWHA claims.  Ann Groninger, Burton Craige, and Narendra Ghosh are representing the plaintiffs.

More from the opinion below:

The primary question presented in this appeal is whether the district court erred in holding that the contents of a particular letter from defense counsel to counsel for the plaintiffs, as clarified by a follow-up letter from defense counsel thirteen days later, rendered moot the plaintiffs’ claims for unpaid overtime wages in a collective action under the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201-219, such that a live case or controversy no longer existed with respect to such claims, requiring their dismissal for lack of subject matter jurisdiction. We answer this question in the affirmative, and therefore, vacate the district court’s dismissal of the plaintiffs’ FLSA claims and remand for further proceedings consistent with this opinion.

In sum, the fact that the Defendants’ offer to settle the Plaintiffs’ FLSA claims (as contained in the letter dated May 16, 2008, and as clarified by the follow-up letter thirteen days later) did not offer for judgment to be entered against the Defendants, was ambiguous as to the amounts of actual and liquidated damages to be recovered, and was conditioned upon an agreement by the Plaintiffs to keep the settlement confidential, prevented the mooting of the Plaintiffs’ FLSA claims. Accordingly, we hold the district court erred by dismissing the Plaintiffs’ FLSA claims for lack of subject matter jurisdiction, vacate the district court’s order dismissing such claims and corresponding judgment, and remand such portion of this action for further proceedings consistent with this opinion. We also vacate the district court’s order denying the Plaintiffs’ motion for conditional collective action certification of their FLSA claims and their amended version of such motion, because the district court denied these motions upon its erroneous belief that the Plaintiffs’ FLSA claims had already been rendered moot. On remand, we direct the district court to reconsider these motions in light of our holding that the May 16, 2008 letter, as clarified by the May 29, 2008 letter, did not render the Plaintiffs’ FLSA claims moot.