Atlanta Employment Attorneys Blog
Fair Labor Standards Act litigation matters, like most civil lawsuits, involve many decisions, including strategic ones. A party may make some decisions, such as settling despite their case’s perceived strength, simply because strategic considerations dictate that it is wise. The importance of wise decision-making in your FLSA lawsuit is one of the many areas where having representation provided by an experienced Atlanta wage and hour lawyer can provide invaluable benefits.
One example of this type of strategic decision-making involves certain lower-amount unpaid compensation cases. Sometimes, potential collateral costs—like paying the other side’s attorney’s fees—may be so substantial and the sum the employee seeks so comparatively small that those figures dictate tendering a full amount to the employee simply to avoid the risk of a major attorney’s fees expense.
A recent unpaid overtime case from Texas shows how an employer can use the mootness doctrine to its advantage in an FLSA case.
The dispute began after internet pirates launched a December 2021 ransomware attack on one of the country’s largest human resources companies. The attack crippled the company’s ability to provide services, impacting the paychecks of many (if not most) of the company’s clients.
E.E. was a food safety quality representative for one of those clients. The ransomware attack allegedly caused his employer to underpay him and delay his paycheck receipt. Based on those alleged delays and underpayment of overtime wages, the representative launched an FLSA lawsuit against his employer.
The trial court dismissed the representative’s case, and the appeals court upheld that dismissal. The key to the employer’s success was its proactive steps after the attack. The employer engaged in a “reconciliation process” with its affected employees. Through that process, the employer calculated the hours each employee worked and each employee’s entitlement to compensation, including overtime wages. The employer calculated that it owed E.E. $549 in overtime pay. The employer subsequently paid E.E. $549 in wages plus an “unconditional tender of maximum compensation” payment of $549.
That $1,098 sum rendered the representative’s claims moot. The best possible outcome the representative could have achieved in court was proving that the employer underpaid his overtime compensation by $549. If the employee had successfully done that, he would have received $549 in actual damages and $549 in liquidated damages, for a total of $1,098, which was the exact amount the employer had already paid him. As the appeals court explained, whenever “an employer’s compensation makes an FLSA plaintiff whole, his claim is moot.”
Possible Benefits of a Dismissal Based on Mootness
Some employers find making a full payment—even if they believe they owe nothing—is a valuable strategy. In 2011, the 11th Circuit Court of Appeals weighed in on a worker’s claim for attorney’s fees. In that case, a warehouse clerk launched a would-be class action alleging underpayment of overtime compensation.
The employer tendered a payment of $638 to the clerk. However, the clerk alleged that the employer owed him $1,500 in unpaid overtime, meaning his case would be worth $3,000 ($1,500 in unpaid wages and $1,500 in liquidated damages). Although the employer vigorously defended its position and denied any violation or liability, it eventually chose to tender the full $3,000 to the clerk.
After it did so, the employer asked the court to dismiss the case as moot. The trial court agreed, and the 11th Circuit upheld the trial court’s ruling. The employer took this approach because, by tendering an amount equal to the employee’s total claimed damages and securing a dismissal based on mootness, it secured a resolution that named neither side as the winning party. That aspect was crucial because the clerk’s lack of “prevailing party” status meant the employer was not obliged to pay the clerk’s attorneys’ fees, which likely totaled far more than $3,000.
Whether you are an employer or an employee, you need an experienced advocate to provide strategic guidance as you navigate the FLSA lawsuit process. For knowledgeable advice and advocacy, call Atlanta unpaid overtime attorneys at the law firm of Parks, Chesin & Walbert. Contact us through this website or at 404-873-8048 to schedule a consultation today.