Attorneys’ Fees Not Always A Sure Thing in FLSA Pay Outs

Fair Labor Standards Act (“FLSA”) claims are the type of claims that can keep an employer fretting.  Not only can FLSA lawsuits be time intensive and mentally draining, they can also prove to be a financial burden if an employer is unsuccessful, since attorneys’ fees for prevailing plaintiffs are mandatory. 29 USC § 216 (b) (2011).   However, the Eleventh Circuit has recently proved that the requirement of attorneys’ fees may not be as clear as one may think.

            On July 28, 2011, the Eleventh Circuit ruled that an employer accused of violating the Fair Labor Standards Act was not required to reimburse a plaintiff for attorneys’ fees and costs when the employer paid out the claim and the court declared the case moot.  Dionne v. Floormasters Enterprises, Inc., et. al., No. 09-15405 (11^th. Cir., July 28, 2011).  InDionne, Defendants filed a Tender of Full Payment and a Motion to Dismiss With Prejudice, based on Plaintiff’s Complaint. This tender of payment was based on Plaintiff’s own version of the facts and estimation of damages.  Pursuant to this tender, Defendants argued that any controversy or cause of action available to be pursued by Plaintiff had been eliminated and the matter should be dismissed with prejudice.  Plaintiff responded to Defendants’ Motion to Dismiss and admitted that the issue of overtime liability was moot and should be dismissed with prejudice. But, Plaintiff requested that the Court reserve jurisdiction as to the award of attorneys’ fees and costs.

            After considering Plaintiff’s motion, the District Court denied Plaintiff’s request for attorneys’ fees stating that there had been no judicial determination as to Defendants’ liability pursuant to 29 USC § 216 (b) since Defendants denied any and all liability, and merely tendered payment in order to resolve the case, rendering the Plaintiff’s claim moot.  On appeal, the Eleventh Circuit analyzed whether or not such a tender by the Defendants was equivalent to a favorable judgment.  In their analysis, the Court noted that Congress has provided that the court in an FLSA action “shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorneys’ fee to be paid by the defendant, and costs of the action.” 29 USC § 216(b) (emphasis added). Based on this language, the Court concluded that the FLSA plainly requires that the plaintiff receive a judgment in his favor to be entitled to attorneys’ fees and costs.

The Court found that the entry of a defendant’s motion to dismiss a plaintiff’s claims as moot did not constitute a judgment in favor of the plaintiff.  In so finding, the Court noted that Plaintiff failed to demonstrate that the District Court entered a judgment awarding him overtime pay, but rather, the record indicated that the District Court granted Defendants’ motion to dismiss  because Defendants’ tender of the amount set forth in Plaintiff’s complaint (while vigorously denying liability) deprived the District Court of jurisdiction due to the absence of a case or controversy. As such, the Eleventh Circuit declined to find Plaintiff was a prevailing party and denied Plaintiff’s request for attorneys’ fees.

As FLSA claims continue to rise, it is important to ensure that employees are classified and paid pursuant to wage and hour laws.  If you have any questions with regards to compliance, please contact us for more information.