Fair Labor Standards Act Defense and the Floormasters decision’s impact

Defense Defense attorneys who were celebrating the Eleventh Circuit Court of Appeal’s July 28, 2011 decision in Dionne v. Floormasters Enterprises, Inc. received a does of reality when the court vacated that opinion and superseded it on January 13, 2012.  While Floormasters will certainly provide defendants with another means to nip a Fair Labor Standards Act (“FLSA”) case in the bud, the superseded holding narrows the situations in which its remedy applies.

The Floormaster case began as a routine FLSA case: the plaintiff claimed he was owed overtime wages, and the defendant denied the claim.  Nonetheless, the defendant tendered full payment for the overtime wages owed – first for the amount initially claimed and then for the revised (greater) amount set forth in an affidavit filed by the plaintiff –  and then filed a “Tender of Full Payment and Motion to Dismiss Complaint with Prejudice.” 

The defendant’s argument was quite simple: having paid the plaintiff what was claimed due, there was no controversy pending (in other words the case was “moot”), the court lacked subject matter jurisdiction over the claims, and dismissal of the lawsuit was proper.  In response, the plaintiff agreed that his overtime claim was moot and that dismissal was proper, but he requested the court reserve jurisdiction to consider an award of attorneys’ fees and costs.  The district court granted the defendant’s motion to dismiss and the plaintiff filed his motion for attorneys’ fees and costs, arguing that he was the “prevailing party” and, therefore, entitled to this relief under the FLSA.  The defendant opposed the motion and argued that the plaintiff was not the prevailing party because a judgment was neither awarded nor entered in his favor.  The district court denied the plaintiff’s motion for fees, and the plaintiff appealed. 

The Eleventh Circuit affirmed the district court’s order because the plaintiff had conceded that the defendant’s tender of payment “mooted” his overtime claim.  Following a petition for rehearing, the Eleventh Circuit issued a superseding opinion which delivered a crushing blow to defense counsel who thought they could use Floormasters to moot pesky FLSA cases.  In particular, footnote 5 in the superseding opinion of the Eleventh Circuit stated:

Our decision in this matter addresses a very narrow question: whether an employee who conceded that his claim should be dismissed before trial as moot, when the full amount of back pay was tendered, was a prevailing party entitled to statutory attorneys’ fees. . .  [i]t should not be construed as authorizing the denial of attorney’s fees, requested by an employee, solely because an employer tendered the full amount of back pay owing to an employee, prior to the time a jury has returned its verdict, or the trial court has entered judgment on the merits of the claim.

In light of this statement, attorneys representing plaintiffs in FLSA cases will likely not admit that their clients’ claims are moot (or even satisfied), even when payment in full has been tendered by the defense.  Defense attorneys who thought Floormasters could eliminate payment of the plaintiff’s counsel’s attorneys’ fees in FLSA cases (as is defense counsel’s universally believe is the motivation for the rash of FLSA cases filed) need to go back to the drawing board and think again.