BY: Charles Ash, IV | IN: Class Action & Commercial Litigation, Employment Law, Unpaid Wages & Overtime
In any wage and hours claim brought by employees against their employer under the federal Fair Labor Standards Act (FLSA), the court can award successful plaintiffs the attorney’s fees and costs they incurred in bringing the suit. In one such suit, however, a federal judge in Colorado recently lambasted the plaintiffs’ lawyers for the amount of fees they sought in a proposed settlement.
In Coker et al v Zurich American Insurance Company et al., the two plaintiffs claimed they were forced to perform off-the-clock work, which should have been paid at one-and-one half their regular hourly rate. The proposed settlement would have provided the two plaintiffs a combined $22,400 in settlement of those claims. Additionally, the settlement included an award of attorney’s fees and costs in the amount of $77,599.
The FLSA’s provision for an award of attorney’s fees to plaintiffs is important because without it, many cases of wage theft would go unpunished as the value of a case would be consumed by legal fees and expenses. As a result, it is not uncommon in an individual wage and hour case for the attorney’s fees to be higher than the actual wages owed to the plaintiff.
In this case, however, U.S. District Judge R. Brooke Jackson was not pleased.
Rejecting the proposed settlement, Judge Jackson stated: “The court believes that the parties and counsel should be ashamed of themselves for asking a federal court to approve this settlement.” She went on to write that “This court will not approve a [Fair Labor Standards Act] settlement where the lawyers receive more than three times what the clients are receiving without an in-person hearing in which each client, named and opt-in, is present and testifies that she is satisfied with the fairness and adequacy of the settlement, and maybe not even then.”
In response to the judge’s rebuke, one of the plaintiffs’ attorneys pointed out that “the clients are recovering more than 300% of their unpaid wages and plaintiffs’ attorneys’ fees were separately negotiated as a capped fee request whereby we asked the court to make its own determination of a reasonable fee within the cap.” Moreover, plaintiffs’ counsel stated that they cut their bill by over $28,000 to help reach the settlement agreement.
The lawyers added that they “appreciate the court’s concern and questions and will provide such additional information to the court including clarifying that there was no confidentiality provision at issue in the settlement.” This means that the settlement will likely be resubmitted to the court in an effort to address Judge Jackson’s issues.
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Charles R. Ash, IV is a Shareholder in Sommers Schwartz’s Complex Litigation groups. A substantial portion of Rob’s practice is devoted to collective and class actions arising under the Fair Labor Standards Act (FLSA) and similar state laws.