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Labor: Hope exists for employers defending wage and hour claims

Two recent rulings can help protect corporate counsel from FLSA costs and liabilities.

In October 2010, the American Bar Association estimated that cases filed in federal court alleging a violation of the Fair Labor Standards Act would increase by more than 13 percent over 2009. In certain regions of the country, including New York and Florida, the increase has been even more staggering. No anecdotal evidence suggests this trend has tapered off during the first seven months of 2011.

Against this backdrop, however, two recent rulings have caught the attention of corporate counsel seeking to better insulate their clients from the tide of wage and hour claims. In the first, the 11th Circuit denied a plaintiff’s attorneys’ fee petition where the employer, prior to judgment, paid the plaintiff all wages claimed plus an equal amount as liquidated damages. In the second, the 4th Circuit concluded that the FLSA does not protect job applicants who claim they were not hired in retaliation for suing a former employer for labor law violations. 

Full offer of judgment precludes payment of attorneys’ fees 

In Dionne v. Floormasters Enters., 2011 U.S. App. Lexis 15560 (11th Cir. July 28, 2011), the plaintiff sued his former employer, claiming that it failed to pay him overtime under the FLSA. In response to the plaintiff's affidavit estimating that his unpaid wages totaled $1,500, the employer tendered a check for $3,000—the amount claimed as unpaid wages plus an equal amount as liquidated damages. It then moved to dismiss the case, arguing that its offer mooted the plaintiff’s claim and, therefore, deprived the court of subject matter jurisdiction under Article III of the United States Constitution The trial court granted the employer’s motion and dismissed the case with prejudice, reserving jurisdiction to consider the plaintiff’s motion for attorneys’ fees and costs. 

The plaintiff’s attorney subsequently sought his fees and costs under Section 216(b) of the FLSA, which makes fee awards mandatory for prevailing plaintiffs. The employer opposed the motion, arguing that the employee was not entitled to his attorneys’ fees or costs because a judgment had not been entered in his favor. The trial court agreed, and the Circuit Court affirmed.

According to the 11th Circuit:

  1. Entry of judgment in favor of a plaintiff is necessary for an award of attorneys’ fees to issue under the FLSA
  2. An FLSA case is rendered moot by payment of the full amount claimed by the plaintiff in back wages, plus liquidated damages
  3. A dismissal based on mootness is not the same as a judgment in favor of the plaintiff
  4. A plaintiff whose FLSA claim is mooted by its full payment is not entitled to an award of attorneys’ fees under Section 216(b) of the FLSA

Job applicants are not protected by the FLSA’s anti-retaliation provision 

In Dellinger v. Science Applications Int’l Corp., No. 10-1499 (4th Cir. August 12, 2011), the plaintiff filed an FLSA overtime and minimum wage suit against her former employer in July 2009. Around that time, she applied to work at the defendant’s company. The defendant offered Dellinger a job as an administrative assistant contingent on her passing a drug test and completing a security clearance form, which asked Dellinger if she was a party to any pending civil cases. She responded by revealing her suit against her former employer. Several days later, the defendant withdrew the job offer. In turn, Dellinger brought suit against the company, alleging that its withdrawn job offer constituted unlawful retaliation under the FLSA, which prohibits discrimination against employees who earlier sued under the law.

The trial court granted the defendant’s motion to dismiss, ruling that only employees, not prospective employees, could sue under the FLSA’s anti-retaliation provision. In a 2-1 decision, the 4th Circuit agreed, ruling that the FLSA’s anti-retaliation provision allows only employees to sue, and that it could find no FLSA case law defining job applicants as employees. Specifically, the Court held that Congress’ use of the term “employee” in the FLSA’s anti-retaliation provision was aimed at prohibiting employers from taking action against current workers who file FLSA actions. By contrast, “[a]n applicant who never began or performed any work could not, by the language of the FLSA, be an ‘employee,’” the majority ruled.

Armed with these cases, corporate counsel may be better able to decrease costs associated with FLSA claims, or avoid liability altogether.

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David Gevertz

David Gevertz is a shareholder and vice chair of the Labor and Employment Department at Baker, Donelson, Bearman, Caldwell & Berkowitz, PC (Atlanta). His practice...

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