On September 20, we posted, Was Dionne The FLSA Magic Bullet We Thought?, which discussed recent cases under the Fair Labor Standards Act (FLSA) where the employer tried to moot the lawsuit by tendering the back pay and liquidated damages claimed by the former employee. As a refresher, in Dionne v. Floormasters Enterprises, Inc., the Eleventh Circuit refused to award attorneys’ fees and costs to an FLSA plaintiff (Dionne) after the defendant tendered full payment of overtime, liquidated damages, and interest to Dionne. We also discussed Klingler v. Phil Mook Enterprises, Inc., a decision from the federal district court in Tampa, in which the judge refused to dismiss the lawsuit after the defendant paid the plaintiff in full for allegedly unpaid overtime, liquidated damages, and interest because the defendant had not also paid for the plaintiff’s attorneys’ fees. A new order from a different Judge within the same district court in Tampa reached a decidedly different result, one that employers will rejoice.
In Craig v. Digital Intelligence Systems Corp., the plaintiff sued for unpaid overtime under the FLSA. The defendants in the lawsuit, based on information supplied by the plaintiff, calculated that the employee would be owed $6,480 in back pay if his claims were true. The defendants doubled that amount to cover liquidated damages and sent a check to the plaintiff, representing full compensation for back pay and liquidated damages. The defendants then sought to dismiss the case on the grounds that it was now moot, i.e., there was no legal issue remaining because the plaintiff had been made whole.
The plaintiff argued that while the tender amount fully compensated him for his back pay and liquidated damages, he was not fully compensated because he still had to pay his attorneys’ fees and costs. The court rejected this argument, finding that the issue of attorneys’ fees was separate from the merits of the case. The court further said that the tender of the full damages and the deposit of the check in the law firm trust account made the plaintiff’s claims moot. The court then refused to find that the plaintiff was a prevailing party, which would have entitled him to an award of attorneys’ fees and costs, because there was no judgment on the merits of the case, no offer of judgment under the federal rules, or no court-approved settlement. The bottom line – the case was moot and had to be dismissed because the plaintiff received full compensation for damages on his FLSA claim and no actual injury existed any longer that could be redressed by the court.
Will the litigation strategy used in Craig work all the time? It is hard to say because, on very similar facts, the same court (but a different Judge) in Klingler refused to dismiss the case on grounds of mootness because the tender did not pay the plaintiff for attorneys’ fees and costs. At a minimum, the tender strategy can end the fight over back pay and liquidated damages and make the case entirely about attorneys’ fees and costs. By making the tender early in the case, the defendant can better control the costs of the litigation, namely the attorneys’ fees racking up on both sides.