Use Of Settlement Offers In A Class Action/Collective Action As A Rule 68 Offer To Moot Employees' Claims?

This question - what constitutes an effective Rule 68 offer of judgment to block or exit litigation - is all important to employers in all types of class actions and collective actions.

The Fourth Circuit recently issued a decision clarifying the magic terms that need to be in a settlement offer in order for it to qualify as a Rule 68 offer of judgment. Rule 68 is an especially effective tool for employers because it can be used to cut off a plaintiff's entitlement to attorneys' fees and costs; typically, the result is to shift the litigation dynamics and gain settlement leverage. Pursuant to Rule 68, plaintiffs who reject a pre-trial offer of judgment and end up recovering less than the offer at trial must pay the defendant's attorney’s fees and costs of litigation incurred after the rejection of the offer of judgment. 

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