A federal court in Midland, Texas recently issued an opinion which discusses the award of attorney’s fees to employees who prevail on their unpaid overtime claims. The Fair Labor Standards Act (“FLSA”) provides for a mandatory award of attorney’s fees and case expenses to an employee who prevails on his or her claim. 29 U.S.C. § 216(b). There is a strong presumption that the lodestar rate figure, which is a presumed hourly rate, represents reasonable attorney fees. Perdue v. Kenny A., 559 U.S. 542, 553– 54 (2010). The lodestar is calculated by multiplying the number of hours reasonably expended by an appropriate hourly rate charged by similar attorneys in the location where the case is pending for such work. See Singer v. City of Waco, 324 F.3d 813, 829 (5th Cir. 2003). Courts in the Fifth Circuit use several factors to determine whether the attorney’s fees are reasonable and necessary, which are: “(1) the time and labor required, (2) the novelty and difficulty of the issues, (3) the skill required to perform the legal services properly, (4) the preclusion of other employment, (5) the customary fee, (6) whether the fee is fixed or contingent, (7) time limitations imposed by the client or the circumstances, (8) the amount involved and the results obtained, (9) the experience, reputation, and ability of the attorneys, (10) the undesirability of the case, (11) the nature and length of the professional relationship with the client, and (12) awards in similar cases.” Johnson v. Ga. Highway Express, Inc., 488 F.2d 714, 717–19 (5th Cir. 1974).
In Hobbs v. Petroplex Pipe and Construction, Inc., No. 17-cv-00030-DC (W.D. Tex., May 23, 2019), the plaintiff, individually and on behalf of those similarly situated, filed a lawsuit against the defendant for violations of the Fair Labor Standards Act (“FLSA”) alleging that the defendant did not pay overtime for hours worked over forty. Following a bench trial, the Court found in favor of the employees and awarded the plaintiffs $50,800 in overtime pay and another $50,800 in liquidated damages, for a total of $101,600 in damages, plus reasonable attorney’s fees. The plaintiffs then moved for their attorney’s fees, and the parties disagreed as to an amount of fees and expenses that were reasonable. In resolving this dispute, the Court used the following analysis:
- Reasonable hourly rate
The court first looked at whether the lodestar hourly rate was reasonable. Courts look to other attorneys of similar skill and experience in the relevant market, here, the Western District of Texas, to see what those attorneys are changing. The parties disagreed regarding the appropriate hourly rate for the plaintiffs’ counsel. The court looked at the State Bar of Texas Department of Research and Analysis Hourly Rate Report. The report detailed hourly rates for attorney’s based on their years of practice, location and type of practice. Based on the latest report of 2015, the median hourly rate of attorneys with similar experience of plaintiffs’ lead counsel was $300/hour. However, the court said that the attorney was entitled to a higher rate given his extensive experience in labor and employment law so the court said $375 was an appropriate rate for plaintiffs’ lead counsel. The court allowed plaintiffs’ other counsel rates of $325/hour, and $110/hour for the firm paralegal.
- Time reasonable expended
Next, the court looked at whether the number of hours expended on the case was reasonable. If the hours lack billing judgment, the court can reduce the number of hours to what it deems necessary. Here, the billing judgment refers to the exclusion of hours that are excessive, redundant, or unproductive. Saizan, 448 F.3d at 799.
The defendant disputed this number alleging that the plaintiffs sought compensation for extraneous and unnecessary work. The Court agreed, excluding all hours billed that were related to the collective action certification.
Lastly, the court looked at the Johnson factors above to see if any departure from the lodestar figure was warranted. The defendant urged the Court to reduce attorney fees by one-third stating that because the plaintiffs’ claims “were inextricably intertwined in that they all had the same claims against the defendant, … all discovery, motion practice, and trial efforts were expended equally on behalf of all three of the plaintiffs.” Hobbs v. Petroplex Pipe and Construction, Inc., No. 17-cv-00030-DC (W.D. Tex., May 23, 2019). The plaintiffs countered that where the legal services are inextricably intertwined, as pursuing claims on behalf of all three claimants would have made it impossible to determine what tasks were performed on behalf of each individual claimantId. The court agreed and thus did not depart from the lodestar amount.
With respect to the costs seeking to be reimbursed, the defendant argued that the plaintiffs should not recover costs for postage, airfare, Uber fees, meals, hotels, parking, mileage, car rental fees, and mediation. Under the FLSA, district courts “shall… allow a reasonable attorney’s fee to be paid by the defendant, and costs of the action.” 29 U.S.C. § 216(b). The Court opined that this includes “reasonable out-of-pocket expenses incurred by the attorney which are normally charged to a fee-paying client, in the course of providing legal services.” Mota, 261 F.3d at 529.
Thus, the Court relied on the finding that out-of-pocket expenses for travel are recoverable under the ADEA because ADEA and the FLSA share a remedial scheme evidenced by the ADEA’s incorporation of the FLSA’s enforcement and remedial provisions. 29 U.S.C. § 626(b) (“The provisions of this chapter shall be enforced in accordance with the powers, remedies, and procedures provided in sections 211(b), 216 (except for subsection (a) thereof), and 217 of this title, and subsection (c) of this section.”).
Thus, travel expenses and postage are recoverable under the FLSA as they are reasonable out-of-pocket expenses. The court further found that the remaining proposed out-of-pocket expenses were reasonable. However, the court declined to award costs for the mediation. Cook Children’s Med. Ctr. v. New England PPO Plan of Gen. Consol. Mgmt. Inc., 491 F.3d 266, 275 (5th Cir. 2007) (declining to award mediation fees under § 1920 and under ERISA). Thus, the court allowed plaintiffs to recover their reasonable costs of $3,993.04 and expenses of $2,974.19. The court then ordered that the plaintiffs were entitled to a total award of $120,061.00 in attorney fees, $3,993.04 in costs, and $2,974.19 in expenses.
This case illustrates how and in what amounts courts decide to award reasonable and necessary attorney’s fees and costs to a successful employee in an overtime case. Courts may deduct hours for redundant or unnecessary work, and they may also reduce the lodestar rate if it is deemed excessive. However, the net result of this case is very positive for overtime victims and their counsel, as it shows that the amount of attorney’s fees can equal or exceed the amount of the overtime claim, which provides an important incentive to plaintiffs and their counsel in pursuing overtime violations. If you have a FLSA unpaid overtime issue and are unsure of how to recover your back wages, consider speaking with an attorney today. Josh Borsellino is an experienced FLSA attorney who offers free consultations to help you understand your legal rights. He works on a contingency fee basis meaning that he does not get paid unless you get paid. He can be reached at 817.908.9861 or 432.242.7118.