Offers of judgment issued pursuant to Fed. R. Civ. P. 68 are used as a cost-effective strategy for resolving cases, whether individual, class or collective in nature. An employee who rejects a settlement offer is liable for post-offer costs if he or she recovers less at trial than the settlement offer amount.
On Jan. 20, 2016, the Supreme Court’s decision in Campbell-Ewald Co. v. Gomez arguably dealt a blow to employers defending against class action cases. The court held an unaccepted Rule 68 offer of judgment does not moot a plaintiff’s claim. The Court did however leave open the possibility that a defendant may be able to moot a case by other means, including by tendering actual payment of the plaintiff’s requested relief.
Additionally, notwithstanding the Supreme Court’s decision in Campbell-Ewald, Rule 68 offers still retain value in the appropriate employment case. Unaccepted Rule 68 offers of judgment still permit a defendant to shift post-offer costs to the employee, and they can also cut off an employee’s right to attorney fees if properly drafted. Court rulings issued since the Supreme Court’s Genesis decision in which I participated are instructive on how to draft settlement offers to preclude a plaintiff’s recovery of attorney fees.
Employment litigators considering making a Rule 68 offer of judgment should strategically determine the proper timing of the offer, the impact of the mootness doctrine, and the potential for the judgment to be used against the employer in future litigation.