Hi!

This is a true story, but my memory has filled in some gaps, so the details may be a bit off. And my decision to share it today is inspired by the Matlock reboot now on CBS (which started off as a pretty good show but now kind of feels like a chore). I won’t bore you with the Matlock storyline.

As many of you know, I was a practicing attorney for about two years. I started as a know-nothing first-year lawyer in the fall of 2005 at an employment law firm defending corporations against pissed-off employees. I hadn’t even gotten my bar scores back, so I wasn’t allowed to practice without supervision. I had never taken a trial law course or an employment law course. I had no idea what I was doing.

At some point in 2006, I was assigned to a case about unpaid overtime — a bank teller in New York had worked 84.25 hours over two 40-hour work weeks, but didn’t designate the 4.25-hour overage as “overtime.” She was probably due about $80 as a result, but that never happened. Instead, another law firm got wind of her situation, figured that the bank had a practice of having employees not record their hours properly, and filed what a lawsuit against the bank claiming that untold numbers of employees had been denied untold hours of overtime. This wasn’t a case over $80; it was a dispute worth hundreds of thousands, potentially. The bank hired my firm; the two senior partners on the case, seeing this as a good training opportunity for me, put me on it as well.

My job was to do some research on recent developments in caselaw surrounding the issue at hand. The case centered on New York and federal overtime laws; I was to read every case decided in the last 18 months that addressed those laws. (There weren’t many, maybe 20 or so.) They also assigned me to read every decision written by the judge we drew for the most recent six months or so. And then, I was to report back on what I learned. They — and I — expected me to learn the ins and outs of the law here, but not discover anything new. That’s not what happened, but I didn’t know it.

I quickly learned that New York law, in the employment law setting, doesn’t have a “class action” option. Instead, there’s something called a “collective action.” I’ll explain in a moment, but at this point in the story, I hadn’t even heard about collective actions before either, so don’t feel bad.

The difference is pretty easy. In a class action, everyone else in the same situation as the plaintiff is considered to be already involved in the case (but has the right to opt out if he or she so chooses). If you’ve ever gotten one of those legal notices about your rights in a class action in the mail, without any prior warning, that’s why.

In a collective action, though, all the other people who could potentially be involved have to opt in. New York state employment law uses collective actions, not class actions, which kind of makes sense. Imagine if your pissed-off former co-worker sues your employer for unpaid overtime and all of a sudden, you’re also part of that lawsuit. That could really hurt your relationship with your boss.

Get it? OK, moving on then. As I’m reading the cases, I come across a footnote in a case in Connecticut, which isn’t applying New York law. It’s a class action employment law case, not a collective action one. The judge says something that you’re not going to understand (if you’re not a lawyer) but don’t worry — I didn’t either at the time. He goes on a tangent about how a Rule 68 offer of judgment could theoretically moot the claim of the plaintiff had this been a collective action case, and he’s glad it didn’t because that would be abusive. I had no idea what that meant, but if you’ve read Now I Know for long enough, you know I’m obsessively curious. So I dove in.

I knew what “moot” meant — that’s what probably got me interested. You can read more about the mootness doctrine here but the basic idea is that if you file a lawsuit but the problem goes away in the meantime, your case goes away too. (Basically, you can’t keep suing because you’re still mad.) There are a lot of exceptions here, but let’s not worry about that. It’s the Rule 68 and “offer of judgment” part which I didn’t get because I hadn’t heard of it before.

Rule 68 is a federal rule of civil procedure, and you can read it here. The details aren’t important for this story; click the link if you want to read more about it — but the idea is pretty simple. If you’re sued, you can make a formal settlement offer to the plaintiff for whatever amount you want. If the defendant rejects the offer and ends up with a judgment worth less than that, he or she is on the hook for all sorts of bad things like, your attorneys’ fees and court costs. And in some cases, the court will make a plaintiff accept an offer of judgment — this happens when the most the plaintiff can possibly recover at trial is less than the offer.

Once I understood that, the footnote from the Connecticut case made sense. The plaintiff in my case was owed, maximum, $80, give or take. If the bank we were representing made her an offer of judgment for significantly more than that — say, $1,000 — the court would have little choice but to force her to accept the offer. She would have no further role in the case, and she was the only named plaintiff. And because this is a collective action, again, there are no other plaintiffs. No plaintiffs meant no lawsuit — the whole case goes away.

It feels like a win-win, at first: the bank’s lawsuit goes away and the bank teller, who was only owed $80, walks away with 12.5 times that. But what about all the other people who were owed unpaid overtime? They’ll never be identified. Had the class/collective action been certified, the bank would have likely been ordered to go through its records to identify other potentially harmed employees — now that’s not happening. What I discovered was abusive and had to be wrong. But as a first-year, know-nothing attorney, I had to bring it to the partners — after all, what did I know? So I did.

My memory at this point is hazy. I remember going to one of the partners first, not both at the same time. Sometimes, when I tell the story, she creams at me, telling me I’m an idiot who should know better than to suggest something so preposterous. Other times, I remember her mostly ignoring me. Either way, she and the other partner (and a more senior associate who I was friendly with) discussed the case without me in the room, and she brought up what I came up with. They apparently laughed about how preposterous it was but then one of them asked the associate to research my research, to see why it doesn’t actually work — I must have missed something, but it’s not obvious what.

He found nothing.

The next day, the two partners called me into the room (with the associate also there) and quizzed me on my research and my reasoning. They couldn’t see any logical problem with what I had come up with, and when I showed them the footnote in the Connecticut case, they decided to try it. The bank made an offer of judgment to the plaintiff for $1,000 and then our firm filed a motion to dismiss the case. The court agreed with my theory and the bank won. (Here’s the decision if you want to read it.) The one key detail that I didn’t realize until sharing this story with you now is that the court also noted that “in the twelve months since the original complaint was filed, not one individual has come forward to opt in to [the] collective action.” So it wasn’t that abusive after all — combined with the fact that the teller had filled out her own time card, there’s a good chance the named plaintiff was the only plaintiff harmed in this way. There’s a good chance that the other law firm was on a fishing expedition in a lake with no fish.

The partners on the case thanked me and I heard a rumor that I was given a lot of credit internally, which I guess was nice. I effectively left the practice of law shortly thereafter. Coincidentally, I promise.

But ultimately, my theory turned out to be wrong. Yes, for the next ten years, employment attorneys everywhere used this one little trick to knock out many, many other cases. But that finally ended in January 2016 when the Supreme Court ruled that “an unaccepted settlement offer or offer of judgment does not moot a plaintiff’s case.” My loophole was closed. And to be honest, I’m good with that — I think that’s the just outcome.

Only took a decade.

The Now I Know Week In Review

Monday: The Phone Company That Hung Up On Its Customers: Don’t complain too much!

Tuesday: Bombs Away! (Cat Version): They wanted to stop malaria. They did — and more. Then the cats came flying down.

Wednesday: Dun-nuh-nuh-nuh-nuh-nuh-nuh-nuh Lawsuit!: Batman vs. Batman

Thursday: The Worst Airplane Meal?: Yes, the title was originally “World” not “Worst.” I guess I was thinking about the Guinness record book while typing it. Oops.

Long Reads and Other Things

Here are a few things you may want to check out over the weekend:

1) “The Leaning Tower of New York” (New Yorker, 17 minutes, February 2025). The subhead: “How a luxury condo building in Manhattan went sideways..”

2) “He Was Once the ‘Subway Ninja.’ He Would Like to Explain.” (New York Times/gift link, 9 minutes, March 2025). The subhead: “In the lowest moment of Selwyn Bernardez’s life, he attacked a stranger with a sword. It was another transit horror story, but with a different ending..” A sword!

3) “Why It’s So Hard to Build a Jet Engine” (Construction Physics, 29 minutes, February 2025). I admit that I only understood like 80% of this, which is also probably an indicator as to why it’s so hard to build a jet engine.

Have a great weekend!

Dan