Has the Eleventh Circuit Court Appeals provided employers with a means to resolve a Fair Labor Standards Act (FLSA) lawsuit quickly and avoid paying attorneys’ fees or has the plaintiffs bar already revised its litigation strategy?  The federal appeals court with jurisdiction over Florida, Georgia, and Alabama recently denied attorneys’ fees to a plaintiff suing for unpaid overtime and liquidated damages under the FLSA.  The case, Dionne v. Floormasters Enterprises, Inc., seemed to outline a path for denying FLSA plaintiffs their attorneys’ fees.

Dionne worked for Floormasters for about two months.  He later sued his former employer for overtime compensation, liquidated damages, attorneys’ fees and costs.  Floormasters quickly tendered Dionne a check for $637.98 in full payment for overtime wages, liquidated damages and interest.  Floormasters then filed a motion to dismiss the lawsuit as moot – a legal term meaning that no legal controversy remained to be resolved by the court.  Dionne opposed the motion and submitted an affidavit saying he was entitled to $3,000 in damages.  Undeterred, Floormasters tendered Dionne a check for $3,000 and filed a second motion to dismiss.  Throughout its filings, Floormasters denied any liability and said it was paying Dionne money solely to resolve the matter expeditiously.  Dionne acknowledged that his claim was moot and agreed that it should be dismissed, but asked the court to reserve jurisdiction to award Dionne his attorneys’ fees and costs.  The trial court allowed Dionne to file his motion for attorneys’ fees but then denied the motion because there was no judicial determination that Floormasters violated the FLSA.  In other words, even though Dionne received everything he claimed, he was not a “prevailing party” under the FLSA.

Dionne took the issue to the Eleventh Circuit Court of Appeals.  The Eleventh Circuit’s opinion is primarily a legal analysis.  In short, the Eleventh Circuit said that, because the trial court did not approve a settlement agreement or retain jurisdiction to enforce a settlement agreement or take any act that could be viewed as judicial imprimatur of the parties change in position, Dionne was not a prevailing party and he was not entitled to attorneys’ fees or costs.  Floormasters’ voluntary change in conduct, i.e., payment of the money Dionne demanded, was not sufficient to make Dionne the prevailing party because there was no corresponding alteration in the legal relationship of the parties.

The Dionne decision seemed to pave the way to quick resolution of FLSA lawsuits and avoidance of paying attorneys’ fees to the suing employee.  Then, along came a decision from the U.S. District Court in Tampa, which leaves us scratching our heads.  The defendant in that case, Klinger v. Phil Mook Enterprises, denied any liability, tendered the plaintiff $3,415.66 in full payment for her overtime claim, liquidated damages, and interest, and moved to dismiss the case as moot.  The plaintiff argued that the tender did not moot the claim for damages but was merely an offer to resolve the claim exclusive of attorneys’ fees and costs.  The court sided with the plaintiff in Klinger on the theory that the tender of payment did not provide the plaintiff with full relief because it did not include an enforceable judgment, attorneys’ fees, and costs.  The Tampa court said that the Dionne decision did not apply because, in Dionne, the plaintiff agreed that his FLSA claim was moot and should be dismissed and, therefore, the Eleventh Circuit did not have to address whether the action was rendered moot by the defendant’s tender.

The narrow reading of Dionne by the Tampa court essentially eviscerates the strategy of tendering full payment to the suing plaintiff.  The tender may still force an early settlement before attorneys’ fees get outrageous, but it is unlikely to preclude the plaintiff’s attorney from recovering any fees.  Economics may not warrant an appeal of the Klinger decision, but we will keep our eye on the issue and continue to update the blog on this evolving topic.