61,000 Reasons to Hate FLSA

An Arizona employer recently learned a costly lesson under the FLSA. Alzate v. Creative Man Painting Three employees sued their employer for a variety of FLSA violations and other claims. The employer, through its attorney, repeatedly tried to settle the case from its inception, but the employees’ counsel refused to discuss settlement until the parties completed discovery. At the completion of discovery, the parties settled the case, but left it for the judge to decide how much of the employees’ attorneys’ fees should be paid by the employer. The employees requested roughly $84,000 in fees and costs. The employer offered a wide variety of reasons why that amount should be reduced to no more than $7,500. At the end of the day, the employer was only minimally successful, reducing the award of fees and costs to $61,000. The case serves as a reminder that attorneys’ fees are almost always the tail that wags the FLSA dog. Plaintiffs’ attorneys know that fee awards are all but automatic in FLSA cases, thereby creating a perverse incentive for plaintiffs to litigate a case into the ground rather than settle early.