Kentucky Employment Law Blog

Attorney's Fees & the FLSA: the Sixth Circuit Firmly Rejects Limiting Attorney's Fees to a Percentage of the Recovery

Attorney's fees are recoverable in suits for unpaid overtime under the Fair Labor Standards Act (FLSA), and "a district court abuses its discretion if it limits the fees awardable under hte FLSA to a percentage of the plaintiff's recovery" the Sixth Circuit has held in Rembert v. A Plus Home Health Care Agency. 

The case is a pretty straightforward overtime case, remarkable mainly because (a) the plaintiffs got some good help from the Department of Labor; and, (b) defense counsel's general recalcitrance and failure to "act in accordance with his representations to the court or his obligations under the Rules." Eventually, the plaintiffs' counsel submitted a fee petition requesting an award for 119.9 hours, totaling $38,190 plus $575 in costs. The district court, after sitting on the petition for six months, "reduced counsel's total compensable hours from  a total of 119.9 to 46.2 -- a 61% reduction in compensable hours, and almost twice the reduction that defense counsel had sought." To add insult to injury, the district court, Hon. James E. Graham of the Southern District of Ohio, "cut the fee award an additional $1,660 on the ground that judges in the Southern District of Ohio 'typically approved' fee awards of no more than 35% of the 'total settlement amount' (meaning the amount of the judgment plus the amount of fees and costs awarded)," which left a total of $13,790. Plaintiffs appealed.

After reciting the lodestar calculation method, the Sixth Circuit turned to the district court's capping of the awardable fees at 35% of the total settlement amount. Capping the fees at a percentage of the recovery is an abuse of discretion, as "neither the text nor the purpose of the FLSA supports imposing a proportionality limit on recoverable attorney's fees." 

The Sixth Circuit also faulted the district court for failing to explain adequately why it had cut some of the hours submitted by the plaintiffs' counsel, especially in view of the fact that many "obtained 100% recovery due to them under the Act." First, the Sixth Circuit found it improper to exclude time devoted to gathering information from clients, since "attorneys may communicate directly with their clients" and "the law refers to an attorney-client privilege, not a paralegal-client one." Second, it was error to exclude as duplicative time devoted to communications between the plaintiffs' co-counsel, since "co-counsel may consult each other to avoid duplicative work and otherwise to maximize their efficiency and effectiveness." Third, the district court did not adequately consider to 100% recovery success rate "or that the actions and omissions of defense counsel indisputably prolonged this litigation and rendered it much less efficient than it could have been." 

The Sixth Circuit then did something extraordinary. It reviewed "both the district court's docket in this case, document-by-document, and the billing records of [plaintiffs'] counsel, line-by-line" and concluded that the "district court abused its discretion when it did not grant in full the amounts requested in counsel's fee petition." The Sixth Circuit remanded the case with instructions that plaintiffs' counsel be awarded the full requested amount and noted they were "also entitled to a reasonable fee and costs for this appeal ... which for everyone's sake we hope is not the subject of another appeal." 

Judge Raymond Kethledge authored the Sixth Circuit's opinion and was joined by Judges Eugene Siler and Julia Gibbons. 

Robert L. Abell
www.RobertAbellLaw.com

Supreme Court to Review Overtime Class Action Suit Against Tyson Foods

The Supreme Court will review a $2.8 million judgment against Tyson Foods in an overtime class action suit. It appears the Court will consider two questions: (1) whether and how statistical evidence and methods may be used to determine damages on a class-wide basis; and, (2) whether individuals may be included in a class, even if they've sustained no damages. Read the petition for certiorari here.

My estimation is that Tyson will find the Roberts Court quite receptive to their arguments. The Republican-appointed majority on the Court has been more than solicitous of business and corporate interests and almost unfailingly hostile toward individuals and employees.  The Court is likely to use the case to virtually eliminate class actions in at least two ways: (1) it will practically eliminate the use of statistical methods, which, in turn, will practically eliminate class actions, since every class member's particularized damages would have to be proved individually just as it would in a non-class action suit; and, (2) while the second point is practically irrelevant, the Court will use it as a vehicle to restrict more generally the formation of class actions by creating some requirement erecting a barrier to being an eligible class member.

An excellent report on the Supreme Court's activity yesterday is by Lyle Denniston as SCOTUSblog.

Robert L. Abell
www.RobertAbellLaw.com

Related articles

Employee Cannot Waive Claims Under the Equal Pay Act, Sixth Circuit Rules

High Court to Hear Case Offering Chance to Limit Class-Action Suits

Justices to review Tyson Foods appeal over class-action suit

Supreme Court to review Tyson Foods appeal over class-action suit

Justices to review Tyson Foods appeal over class-action suit

SCOTUS Cert. Grant on Class Actions: Tyson Foods v. Bouaphakeo

U.S. Supreme Court Denies Certiorari in New Orleans Teachers' Challenge to Termination After Katrina

Cert Grant on Statistical Adjudication

Justices to review Tyson Foods appeal over class-action suit

Justices to review Tyson Foods appeal over class-action suit

Is A Plaintiff's Testimony Alone Enough to Sustain an Overtime Claim?

Overtime claims arise where there are no records kept of the hours the employee works, or where the records are incomplete and therefore false or are just false, as in fabricated for purposes of litigation. So it can develop that a plaintiff's claim for unpaid overtime may rest on his or her testimony alone regarding the hours he or she worked. Is this enough for a jury to find in the plaintiff's favor? "Yes" answered the Sixth Circuit recently in Moran v Al Basit LLC (June 1, 2015). 

The plaintiff, Moran, worked for a couple of different auto repair shops owned by defendant. He claimed that he worked every week 65-68 hours. The defendant offered time sheets purporting to show that Moran worked "exactly thirty hours a week, despite his schedule varying notably from week to week." Furthermore, one of defendant's agent offered that he customarily reviewed security camera footage to verify/determine the employees' work hours, which he then recorded on paper, but, as it happened, these papers could not be located by the time of suit. Moran asserted that their existence had been fabricated in any event. 

So Moran's main nearly only evidence was his word.  The district judge, Hon. Judith Levy, granted summary judgment to the defendant. The issue before the Sixth Circuit was whether Moran's word alone good enough for a jury to find in his favor:

This appeal raises one simple question: Where Plaintiff has presented no other evidence, is Plaintiff’s testimony sufficient to defeat Defendant’s motion for summary judgment? We hold that it is. Plaintiff’s testimony coherently describes his weekly work schedule, including typical daily start and end times which he used to estimate a standard work week of sixty-five to sixty eight hours. The district court characterized this testimony as “somewhat vague.” However, while Plaintiff’s testimony may lack precision, we do not require employees to recall their schedules with perfect accuracy in order to survive a motion for summary judgment. It is unsurprising, and in fact expected, that an employee would have difficulty recalling the exact hour he left work on a specific day months or years ago. It is, after all, “the employer who has the duty under § 11(c) of the [FLSA] to keep proper records of wages [and] hours,” and “[e]mployees seldom keep such records themselves.” Defendants emphasize the fact that Plaintiff’s testimony is inconsistent with the allegedly contemporaneous timesheets Defendants provided to the court. But these timesheets do not amount to objective incontrovertible evidence of Plaintiff’s hours worked. Plaintiff denies the validity of these timesheets, which were handwritten by Defendants, and contends that Defendants sanctioned his overtime work. Whether his testimony is credible is a separate consideration that is inappropriate to resolve at the summary judgment stage.

Robert L. Abell
www.RobertAbellLaw.com

Related articles

Black firefighter's lawsuit survives another challenge by Grasonville VFD

The Attorney-Client Privilege In Kentucky: When Does It Apply To Statements By A Corporation's Employees?

Agreement To Shorten Limitations Period for Wage and Overtime Claims Not Enforceable, Sixth Circuit Rules

Northrup v. Toledo: Why a Lawfully-Carried Handgun is Like a Wallet

Bam! Bam! Two Plaintiffs Fall in Two District Court Decisions Concerning Orphan Drug Exclusivity Carve-Outs

Is This The End of RICO?

Sixth Circuit addresses standard for judicial recusal in employment case

Sixth Circuit Becomes First Appellate Court to Address Choice-of-Law Problem in Direct-File MDLs

An Employer Who Knows or Has Reason To Know That An Employee's Time Records Underreports Their Work Hours May Not Escape FLSA Liability Based on the Employee's Failure to Fully Report the Hours Worked

Can an employer that knows or has reason to know an employee has worked overtime get out of paying overtime if the employee does not complain immediately about not being paid the overtime? "No" answered the Eleventh Circuit recently in Bailey v. Titlemax of Georgia in reversing a summary judgment granted by U.S. District Judge Marvin H. Shoob of the Northern District of Georgia.

Santonias Bailey was a victim of wage theft while working for Titlemax of Georgia. His supervisor told him that Titlemax did not pay overtime and made him work off the clock. His supervisor also altered his time cards to reduce the amount of time they reported Bailey had worked. Bailey sued for his overtime pay after leaving Titlemax's employment.

Titlemax's answer was, basically, so what? It blamed Bailey and pointed out that he had not followed its policies of reporting his supervisor's misconduct and accurately reporting his time worked on his time cards. According to Titlemax, Bailey was to blame for having his wages stolen and was entitled to nothing. This succeeded in the district court, which granted Titlemax summary judgment and dismissed Bailey's overtime claim.

The Eleventh Circuit reversed. It framed the question as follows:

if an employer knew its employee underreported his hours, can it still assert equitable defenses based on the employee's conduct in underreporting as a total bar to the employee's FLSA claim?

Put another way, the question is whether an employer can get away with intimidating an employee into letting wage theft slide? The FLSA was intended to police and prevent just that sort of abuse the Eleventh Circuit observed: "the goal of the FLSA is to counteract the inequality of bargaining power between employees and employer."  This principle guided the court's holding:

If an employer knew or had reason to know that its employee underreported his hours, it cannot escape FLSA liability by asserting equitable defenses based on that underreporting. To hold otherwise would allow an employer to wield its superior bargaining power to pressure or even compel its employees to underreport their work hours, thus neutering the FLSA's purposeful reallocation of that power.

The court also noted that it could find no case where an employer's wage theft had been excused where the employer knew the employee's work hours were underreported and still it got away with wage theft because the employee did not immediately demand full compensation.  

The Eleventh Circuit's unanimous opinion was authored by Circuit Judge Beverly Martin joined by Circuit Judge Lanier Anderson and visiting District Judge Denise Cote of the Southern District of New York.

Robert L. Abell
www.RobertAbellLaw.com

 

Related articles

Employee Cannot Waive Claims Under the Equal Pay Act, Sixth Circuit Rules

Agreement To Shorten Limitations Period for Wage and Overtime Claims Not Enforceable, Sixth Circuit Rules

The Attorney-Client Privilege In Kentucky: When Does It Apply To Statements By A Corporation's Employees?

Countrywide Financial Race Discrimination Class Action Denied

Landlord Can Be Liable For Tenant's Injuries Caused By Leaky Roof, Kentucky Court of Appeals Rules

TGI Friday's Accused Of Denying Workers Minimum Wage And Overtime Pay

Lawsuit seeks overtime pay for Epic technical writers

State recoups $30M for workers

FLSA Home Care Rule Struck Down by D.C. District Court

Getting Paid for Work Done: Doesn't the Employer Define The Employee's Principal Activity?

To me the issue of whether an employee's time doing something should be compensated by his or her employee reduced itself to a simple question:

Did the employer require it at the pain of firing the employee if the employee did not do it? 

If the answer to this question is "yes," the employee should be paid for the time. But the Supreme Court's decision earlier in this week in the Amazon security checkout line case, where it ruled that the 25 minutes or so employees at Amazon warehouses spend waiting to clear a security checkout to make sure they're not stealing anything is not compensable worktime, casts at least substantial doubt on this seemingly obvious principle. 

The Court analyzed the case as turning on what was or is the "principal activity" for which the employees were employed. The answer, the unanimous Court concluded, was fetching goods from around the warehouse and readying them for shipping, not waiting in line at a security checkout line.

But this evades reality: if the employer orders the employee to fetch 7 blue bathtubs or get fired, the principal activity for which the employee is employed is fetching blue bathtubs. Likewise, if an employee orders the employee to stand in and clear the security checkout or get fired, the principal activity for which the employee is employed is standing in and clearing that line. It's not one thing: whatever the employer says the employee has to do to keep his or her job is the principal activity for which the employee is employed. And employees should get paid for the time spent doing what their employers require them to do.

There is an excellent discussion and analysis by Anna North on the Op-Talk blog for the New York Times: What the Supreme Court's Decision in the Amazon Case Means.

Robert L. Abell
www.RobertAbellLaw.com

Related articles

Ex-UPS worker's pregnancy discrimination case goes to Supreme Court

Amazon, NLRB settle workers' rights complaint

The Real Reason Amazon Is Telling Us About Its Robots - Huffington Post

NY Times Report Documents Metastasizing of the Police State of America

Amazon Unveils New Warehouse Robots

Supreme Court's opinion on the President's Reference

Pregnancy discrimination case reaches US Supreme Court

Florida Supreme Court Weighs Workers' Comp Attorney Fee Schedule

Employee Cannot Waive Claims Under the Equal Pay Act, Sixth Circuit Rules

Agreement To Shorten Limitations Period for Wage and Overtime Claims Not Enforceable, Sixth Circuit Rules

Time Spent Waiting In After-Shift Security Checkout Line Not Compensable, Supreme Court Rules

The Supreme Court ruled unanimously yesterday that time spent by employees at an Amazon warehouse checking out through security after the end of their shift was not compensable work time.  The decision is Integrity Staffing Solutions v. Busk, No 13-433. 

The Court based its ruling on two main points: (1) it likened standing and waiting in the security checkout line to walking out of the workplace after the end of the shift; and, (2) if the time spent on the security checkout were eliminated, neither the employee's effectiveness nor productivity would be affected. These two factors distinguished the time spent waiting in the security checkout line from cases where the Court has held (1) that the time spent by workers in a chemical plant putting on protective clothing was compensable, because without the protective clothing the workers could not do their job safely, and, (2) the time spent sharpening knives by employees in a meat-processing plant was compensable because sharp knives made the butchers more effective.

There is additional coverage of the decision:  Supreme Court Rules Against Worker Pay for Screenings in Amazon Warehouse Case in the New York Times; No Overtime Pay for After-Work Security Check at SCOTUSblog. 

Robert L. Abell
www.RobertAbellLaw.com

Related articles

Employee Cannot Waive Claims Under the Equal Pay Act, Sixth Circuit Rules

Agreement To Shorten Limitations Period for Wage and Overtime Claims Not Enforceable, Sixth Circuit Rules

The Attorney-Client Privilege In Kentucky: When Does It Apply To Statements By A Corporation's Employees?

Countrywide Financial Race Discrimination Class Action Denied

Landlord Can Be Liable For Tenant's Injuries Caused By Leaky Roof, Kentucky Court of Appeals Rules

Ten SCOTUS Cases to Watch in October & November

Supreme Court's opinion on the President's Reference

Another Take on Warger v. Shauers

Pregnancy discrimination case reaches US Supreme Court

Overtime & Salaried Workers - So Why Did Overtime Disappear?

In 1975, 65% of salaried workers in the United States were paid overtime. In 2013, only 11% of American salaried workers were paid overtime.  So what happened? 

Good lobbying by corporations; the increase of corporate PAC money in our elections; the decline of labor unions for another.  

To be exempt from overtime (meaning you don't have to paid overtime), a salaried workers has to be paid a minimum of $455.00 per week ($455 divided by 40 = $11.38 per hour). There are other factors that make for the exemption also.  If this threshold were the equivalent to what it was in 1975 (adjusted for inflation) the weekly minimum threshold would be $1327 or $69,000 a year.  

President Obama should act to make the overtime standard the same today as it was for salaried workers in 1975; the minimum weekly should be changed to $1330.  

The point is made in an excellent article in by Nick Hanauer in Politico: Whatever Happened to Overtime?

Sign a petition to President Obama at Daily Kos: What About Overtime?

Robert L. Abell
www.RobertAbellLaw.com

Related articles

Agreement To Shorten Limitations Period for Wage and Overtime Claims Not Enforceable, Sixth Circuit Rules

Health Insurance Case Managers File Class Action for Unpaid Overtime

Health insurance case managers, who are involved in the pre-approval, pre-certification or pre-authorization of health care procedures, have filed an interesting class action for unpaid overtime against Centene Management Company in federal district court in Seattle. The case is Randolph v Centene Management Company, No. 14-5730 (WD Wash). 

Centene provides administrative and claims management services to managed care companies that operate government-sponsored health insurance plans.  The key issue in the case is whether the case managers are or are not exempt from overtime pay requirements.  The case managers describe their job duties as follows:

As Case Managers, Plaintiff’s and the putative class members’ primary job duty was non-exempt work consisting of reviewing medical authorization requests submitted by healthcare providers against pre-determined guidelines and criteria for insurance coverage and payment purposes.

The degree to which, if any, the case managers truly exercise discretion and independent judgment will likely determine whether or not they are or are not exempt from overtime pay requirements.  Centene draws significant competive and economic advantage by overloading the case managers and refusing to pay any overtime. 

Robert L. Abell
www.RobertAbellLaw.com

Related articles

Activists hope Centene move brings domino effect

Centene to build new claims center in Ferguson, add up to 200 jobs

Medicaid Contractor Centene Was Top Financial Performer In St. Louis

Shift Supervisors and Overtime Pay

Employees with supervisor job titles or who have some supervisory authority are often misclassified as exempt from overtime pay. Usually applied to them is the "executive," "supervisor" or "manager" exemption to overtime pay requirements. The Sixth Circuit recently considered application of this exemption in Bacon v. Eaton Corp., No 13-1816 (6th Cir., May 1, 2014).

Plaintiffs were "front line" shift supervisors for more than 20 hourly employees. In turn, the plaintiffs were under the supervision of second-level managers. Their employer, Eaton Corporation, refused to pay plaintiffs overtime claiming the "executive" exemption applied to them. Plaintiffs sued, the district court granted summary judgment to Eaton, and plaintiffs appealed. The issue on appeal was whether the executive exemption applied to plaintiffs.

The executive exemption to overtime pay requirements has a four-part test:

 

1. the employee must be compensated on a salary basis of at least $455 per week;
   
   
2. the employee's primary duty must be management of the enterprise or of a customarily recognized department or subdivision of it;
   
   
3. the employee must customarily and regularly direct the work of two or more other employees; and,
   
   
4. the employee must have  hire or fire authority or their "suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees [must be] given particular weight."

 

The Sixth Circuit reversed the summary judgment finding that plaintiffs had created a fact issue regarding whether the executive exemption applied to them based on the following:

 

• although plaintiffs completed probationary evaluations for employees they supervise, Eaton did not place great weight on those evaluations;
  
  
• sometimes the plaintiffs submitted their evaluations after the probationary employees' probation had ended, a reality showing they had no influence on whether or not the probationary employee was hired;
  
  
• the plaintiffs' job descriptions did not include providing suggestions as to hiring and firing or other changes in employment status;
  
  
• Eaton did not follow their disciplinary recommendations and sometimes ignored them completely.

 

In essence, the Sixth Circuit ruled that the plaintiffs had presented enough evidence showing that Eaton did not pay much if any attention to their evaluations or other inputs to the personnel process for a jury to find that the "executive exemption" did not apply to them.  The court also stated that: "As a matter of law, an employee who merely carries out the orders of a superior to effectuate a change in status is not performing exempt executive duties." Therefore, the case was remanded for trial.

Senior Circuit Judge Damon Keith wrote the opinion for the Sixth Circuit.

Robert L. Abell
www.RobertAbellLaw.com

 

Related articles

Once Again, The Sixth Circuit Rules That A Similarly-Situated Comparator Need Not Have Worked For The Same Supervisor

How Important Is Whether A Comparator Was Working For the Same Supervisor?

What Obama's OT hike could mean in CA

Overtime-Pay Lawsuits Surge During Lousy Economy

Changes in overtime pay rules could have 'big effect on employers,' especially in Midwest

Overtime policy for top fire officials skirts labor standards

Is Wage Theft A National Epidemic?

According to the latest information from the U.S. Department of Labor wage theft is a national epidemic: more money in earned wages are stolen each year from working people than is robbed from gas stations, banks and convenience stores put together. The wage theft comes in two forms: (1) overtime that is earned but not paid; or, (2) straight wages that are simply not paid. 

The Huffington Post reports: L0w-Wage Workers Are Robbed More Than Banks, Gas Stations and Convenience Stores Combined. 

Robert L. Abell
www.RobertAbellLaw.com

Related articles

Wage theft outstrips bank, gas station, and convenience store robberies

Wage Theft Outstrips Bank, Gas Station and Convenience Store Robberies

Surprise! Low-wage Workers Are More Likely To Be Victims Of Wage Theft

Workers' Group Rallies Behind Two Fast Food Workers Alleging Mistreatment, Wage Theft

Haitian Wage Theft

Are You Prepared For "Wage Theft" Laws?

Wage Theft Flow For Executives

Corporations Rewriting U.S. Labour Laws

Employee Cannot Waive Claims Under the Equal Pay Act, Sixth Circuit Rules

Is an employee’s waiver of the statutory limitation period for an Equal Pay Act enforceable? “No” answered the Sixth Circuit recently in Boaz v FedEx Customer Information Services, Inc, No 12-5319 (August 6, 2013), reversing a district court's judgment.

Boaz started working for FedEx in 1997 and signed an employment agreement including the following provision: "To the extent the law allows an employee to bring legal action against Federal Express Corporation, I agree to bring that complaint within the time prescribed by law or 6 months from the date of the event forming the basis of my lawsuit, whichever occurs first." Subsequently, Boaz filed suit against FedEx asserting claims for overtime compensation under the Fair Labor Standards Act (FLSA) and the Equal Pay Act, pointing out that she was paid considerably less than her male predecessor in the job. Although Boaz filed suit well within the limitations period in the statutes, she did so more than six months after her claims accrued and the district court (Magistrate Judge Diane K. Vescovo of the Western District of Tennessee) granted summary judgment to FedEx on the limitations period issue.

The Sixth Circuit reversed and began by analyzing whether Boaz’s waiver of her FLSA claims was valid, concluding that it was not as discussed in an earlier post, Agreement To Shorten Limitations Period for Wage and Overtime Claims Not Enforceable, Sixth Circuit Rules. This same analysis applied to the Equal Pay Act as to the FLSA because in 1963 amended the FLSA with the Equal Pay Act. First, since “Congress is [presumed to be] aware of the law (including judicial precedent) relevant to legislation it enacts … by folding the Equal Pay Act into the FLSA, Congress meant for claims under the Equal Pay Act to be unwaivable as well.” Second, similar to an employer that fails to pay overtime in violation of the FLSA, “an employer who pays women less than a lawful wage might gain the same competitive advantage as an employer who pays less than minimum wage.” 

Robert L. Abell
www.RobertAbellLaw.com 

Related articles

Nichols Kaster Wins Precedent-Setting Wage and Gender Discrimination Appeal

10 Major Employment Laws That Every Texas Business Owner Should Know

Equal Pay Act