Unaccepted Offer Didn't Deflate Tire Workers'FLSA Claims

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By Jay-Anne B. Casuga

June 3 — Arizona tire store employees who didn't accept their employer's checks for alleged unpaid overtime wages can proceed with their collective action against the company, a federal judge ruled ( O'Neal v. America's Best Tire LLC , 2016 BL 176293, D. Ariz., No. 16-00056, 6/2/16 ).

The decision is one of a handful of rulings to apply the U.S. Supreme Court's January holding in Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016), to Fair Labor Standards Act cases. In Gomez, the justices 6-3 concluded that an unaccepted offer to settle an individual claim doesn’t render a claimant’s proposed class action moot (13 DLR C-1, 1/21/16).

“The Gomez case is pretty brand new,” attorney Clifford P. Bendau of The Bendau Law Firm in Phoenix, told Bloomberg BNA June 3. He said yesterday's ruling “that even a unilateral tender of payment of the entire amount allegedly owed cannot halt the progression of a collective action lawsuit to recover unpaid minimum and overtime wages.”

Bendau, one of three attorneys who represented the employees, said he estimates that a little more than 100 current and former tire porters, crew members or tire technicians of America's Best Tire LLC potentially could opt-into the collective action.

An attorney representing America's Best Tire didn't respond to Bloomberg BNA's June 3 requests for comment before deadline.

No Payment Without Acceptance

America's Best Tire argued that the workers' FLSA claims should be rendered moot because it provided payment to the employees in amounts equal to its alleged liability, including unpaid overtime compensation and liquidated damages.

Rejecting that argument, Judge David G. Campbell of the U.S. District Court for the District of Arizona found that no payment occurred because the employees never accepted, cashed or deposited those checks.

The company cited to no case law that supported its contention that a payment can occur without an acceptance, Campbell said.

Here, the workers rejected what amounted to a settlement offer or an offer of judgment under Rule 68 of the Federal Rules of Civil Procedures, the judge said.

Relying on Gomez, he concluded that the unaccepted offer didn't moot the worker's collective action, which he also conditionally certified in the same ruling.

Jason S. Barrat and Michael D. Zoldan of the Zoldan Law Group in Scottsdale, Ariz., also represented the employees. Karen L. Karr of Clark Hill in Scottsdale, Ariz., represented America's Best Tire.

To contact the reporter on this story: Jay-Anne B. Casuga in Washington at jcasuga@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com