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. The FLSA provides that the prevailing party 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 attorney’s 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 overtime damages claimed by the employee prevents an FLSA plaintiff from collecting his or her 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..
Therefore, where an employer denies liability, but tenders payment of the entire amount of the FLSA wages clamed by a plaintiff, the employer will be able to dismiss the plaintiff’s lawsuit as mott and avoid liability for payment of the plaintiff’s attorneys’ fees. Of course, even prior to litigation, employers may 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.