Darla McClure publishes MC SHRM Legislative Affairs Update for March 2012

By: Darla J. McClure

Publication Name:

Montgomery County Society for Human Resource Management (MCSHRM) Chapter Newsletter

Media Type: Publication

Successful FLSA Claims by Employees Will Require an Employer to Pay Employees’ Attorneys’ Fees

Recently, the U.S. District Court of Maryland heard a case involving claims of violations of the Fair Labor Standards Act (“FLSA”). The facts were simple. Three employees filed FLSA claims against their employer, Central Service, LLC, seeking recovery of overtime and minimum wage for all hours worked. Following mediation, the parties settled the underlying lawsuit, with the employer paying $6,000 to one employee and $2,750 each to the other two employees for a total of $11,500.

After mediation, the employees’ counsel filed a petition with the Court seeking recovery of its attorneys’ fees of $71,840, representing 179.6 billable hours at a rate of $400 per hour. Central Service opposed the petition claiming the $400 per hour was excessive and counsel “over litigat-ed” the case resulting in too many billable hours.

The Court held that the hourly rate was too high and reduced it to $300 and reduced the hours with regard to certain travel time. The end result was an award of $56,430 to employees for their attorneys’ fees– almost 5 times the amount of the back wages recovered in the litigation. In reaching its conclusion, the Court said it was of no consequence that the attorneys’ fees were more than the employees’ claims. The Court went on to state that “In FLSA cases, like other dis-crimination or civil rights cases, the attorneys’ fees need not be proportional to the damages plain-tiffs recover because the award of attorneys’ fees in such cases encourages the vindication of Con-gressionally identified policies and rights.” Allende v. Unitech Design, Inc., 783 F.Supp.2d 509, 511 (S.D.N.Y. 2011).

It is important to note that while analyzing the costs associated with defending an FLSA claim, if the employer loses, it could not only have to pay its’ own attorneys’ fees, but that of the employee bringing the claim; and, unfortunately, the attorney’s fees could be well over the actual amount claimed by the employee.

This issue of the MC SHRM Newsletter is available online.

This article is reprinted with permission from MC SHRM.

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