- Employers Now Have a Powerful Option to Defeat FLSA Attorney's Fees Claims
- August 5, 2011 | Authors: Andrew M. Loewenstein; Scott T. Silverman
- Law Firms: Akerman Senterfitt - West Palm Beach Office ; Akerman Senterfitt - Tampa Office
As many employers know, the Fair Labor Standards Act ("FLSA") requires most businesses to pay their employees the federal minimum wage, as well as time-and-one-half their regular rate for hours worked in excess of forty (40) per week. Although employers may painstakingly develop polices to comply with these FLSA requirements, mistakes in payment of wages inevitably occur. When this happens, employees have little difficulty finding an attorney to represent them, even where the amount of claimed damages is small. This is so, because the FLSA provides that a prevailing plaintiff is entitled to attorneys' fees. The FLSA therefore tends to be a fee-driven statute, because the amount of attorneys' fees sought by a plaintiff typically exceeds the amount of any overtime actually owed. However, is it possible for an employer to resolve the employee's claimed damages without having to pay the attorneys' fees sought by the employee's counsel?
In a recent victory for employers, the United States Court of Appeals for the 11th Circuit said "yes," finding that an employer who tenders the entire amount of alleged overtime damages bars a claim for FLSA attorneys' fees. That case, Dionne v. Floormasters Enterprises, Inc., ---F.3d.---, 2011 WL 318977 (July 28, 2011) (11th Cir. 2011), provides powerful leverage for employers against FLSA litigation in certain cases.
The Plaintiff in Dionne was employed by Floormasters Enterprises, Inc. as a warehouse clerk for approximately nine (9) weeks. Several months after departing the company, Dionne filed an FLSA lawsuit in a Florida federal court, seeking to recover overtime compensation, liquidated damages (double the wages owed), and attorneys' fees. During the litigation, Floormasters filed a motion, which denied that Dionne was owed anything, but offered $3,000—the entire amount of the Plaintiff's alleged overtime claim. Floormasters argued that its tender of the entire amount of alleged overtime mooted Plaintiff's case, and it should be dismissed. The Plaintiff accepted the offer, but sought to collect his attorneys' fees by claiming that he had prevailed in the litigation. The trial court denied the Plaintiff's motion for attorney's fees, stating that the FLSA only provides for such an award where there is a determination that a defendant violated the FLSA. That did not occur, because Floormasters had denied any and all liability and merely tendered payment to resolve the litigation and render the Plaintiff's claim "moot." On appeal, the Eleventh Circuit affirmed the denial of fees, because Plaintiff had not prevailed in his lawsuit. Rather, his claim was dismissed.
Therefore, where an employer denies liability, but tenders payment of the entire amount of the FLSA wages clamed by a plaintiff, the employer may be able to dismiss the plaintiff's lawsuit and avoid liability for payment of the plaintiff's attorneys' fees. Consequently, Dionne underscores the importance of keeping complete and accurate time records of hours worked by employees. Employers who maintain such records will be in a good position to determine the amount, if any, of wages owed to an employee, or to obtain, as in Dionne, an employee's admission as to the amount of potential overtime owed. The employer may then offer to pay the agreed upon amount and move to dismiss the claim as moot, without payment of fees. Of course, even prior to litigation, employers may be able to moot a FLSA claim and deter a lawsuit for damages and fees by offering to pay the entire amount claimed to be owed. Employers should keep in mind their new leverage in addressing FLSA claims.