Warning - Employers who fail to pay overtime as required should settle immediately!

29-May-2014

The most recent FLSA case reminds employers of the first rule of holes.  When you find yourself in one, stop digging.

The Fair Labor Standards Act (FLSA) requires Employers to pay 1.5 times the base pay rate to non-exempt employees who work more than 40 hours in a week.   The FLSA imposes harsh penalties for disobedient employers.  Specifically, prevailing employees are typically entitled to recover double the unpaid wages, and attorneys' fees and costs incurred to prosecute the claim.  The FLSA imposes these penalties to discourage employers from trying to avoid their obligations to pay fair wages and to encourage lawyers to take these cases notwithstanding the damages are often small. In addition, the penalties are intended to strongly encourage disobedient employers to quickly resolve FLSA claims when they arise.

Last week, the United States District Court reminded us all to take the FLSA obligations seriously.  The Court awarded $173,000 in fees and costs to a plaintiff who recovered only $6,000 in unpaid wages.  Maybe the most important thing about the fee award in this case is that it was not unusual.  The Court noted that a fee award that is more than 10 times the unpaid wages is "not remarkable in an individual FLSA case seeking overtime."

The case is Cain v. Almeco 1:12-CV-3296-TWT.

Relevant excerpts follow:

That a plaintiff succeeds in only a limited way does not strip her of prevailing-party status, but the degree of her success is “the most critical factor in determining the reasonableness of a fee award.” 

***

The Plaintiff had the burden of proof; the fact that defense counsel billed substantially fewer hours to defend the case is not remarkable. Considering the Johnson factors – in particular, the experience, reputation, and the ability of the attorneys and the “undesirability” of the case – and the Lee Parks Declaration, I think that the hourly rates requested are reasonable. This results in a lodestar amount of $173,300.50 ($193,121.50 minus $19,821.00). 

***

Applying established Eleventh Circuit law, a downward adjustment to the lodestar is merited only if the prevailing party was partially successful in its efforts. Here, the Plaintiff prevailed on her only claim and persuaded the jury that the FLSA violation was wilful. It is true that she was awarded only about one-third of the damages that she claimed. But that is not remarkable in a case where an FLSA plaintiff has to reconstruct her hours. And it is true that the lodestar amount is more than ten times that of her actual and statutory damages. But that is not remarkable in an individual FLSA case seeking overtime. Accordingly, I decline to reduce the lodestar amount for limited success on the merits of the claim. Therefore, the Plaintiff’s Motion for Attorney’s Fees [Doc. 72] is GRANTED in the amount of $173,300.50. 



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