Agreeing with a district court that certain county employees did not present enough evidence to avoid a directed verdict on the county’s “willfulness” in failing to aggregate hours worked by employees who had two part-time jobs in calculating their overtime pay, the Third Circuit affirmed judgment for the employer on that issue. The evidence did not suggest the county was subjectively aware of the FLSA problem at the time of the violations. Additionally, the appeals court rejected the employees’ challenge to the district court’s calculation of attorney’s fees (Souryavong v. Lackawanna County, September 20, 2017, Vanaskie, T.).
The employees were among a class of individuals working in two separate part-time capacities for the county. Apparently the county had tracked and paid these employees for each of their individual jobs, but in 2011 it became aware that it had failed to aggregate the hours of both jobs, resulting in a failure to pay the overtime rate for hours beyond 40 hours per week. In June 2013, several employees filed suit alleging, among other claims, nonpayment of overtime in violation of the FLSA.
Willfulness. It was undisputed that the county violated the FLSA’s overtime provisions at various times from 2008 to 2012. What was disputed was whether the county’s violations were “willful.” In November 2015, the case went to trial on the willfulness question and damages. At the close of the employees’ case, the county made an oral motion for entry of judgment as a matter of law, arguing the employees’ evidence was insufficient to create a jury question on willfulness. The district court agreed and entered judgment for the employer.
Liquidated damages. The damages question went to the jury, however, and the employees were awarded $5,588. The court addressed several post-trial motions and sided with the employees on their motion for liquidated damages. It reasoned that the county had presented “no evidence” to show that it had taken any “affirmative steps to ascertain the FLSA’s requirements” prior to the overtime violations or that it had acted in “good faith.” In that regard, the district court correctly followed the Third Circuit’s ruling in Martin v. Cooper Elec. Supply Co.
Attorneys’ fee calculation. The employees also moved for attorney’s fees and costs of $166,162 based on a fee rate of $400 per hour for 367.6 hours of legal work. The district court found the proper rate to be $250 per hour and that only 278.2 hours were compensable for a lodestar of $69,550. It then deviated downward to a final award of $55,852, approximately one-third of what the employees initially requested. This appeal followed.
On appeal, the employees presented two issues: (1) whether the district court was right to grant judgment as a matter of law on the willfulness question; and (2) whether the court erred in its calculation of attorney’s fees. Although willfulness is a “question of fact,” a district court may take the question from the jury and grant a Rule 50(a) motion for judgment as a matter of law if “there is no legally sufficient evidentiary basis for a reasonable jury to find for” the non-moving party.
Willfulness defined. Under the FLSA, whether an employer “willfully” violates the statute is important because willfulness extends the FLSA’s limitation period from two years to three, bringing another year of lost pay within the scope of an employee’s claim. Willfulness includes situations when the employer, at the time of its violation, either “knew” its conduct was prohibited by the FLSA or “showed reckless disregard for the matter.”
Here, no pre-violation awareness of the two-job FLSA problem was shown by the evidence. Moreover, the employees’ evidence did not suggest that the county’s violations continued after an email identifying the problem by the county’s Human Resources director. Alternatively, even if the HR director’s email pre-dated some of the county’s FLSA violations, two other factors still indicated that the district court’s ruling was correct. First, an FLSA violation must have a degree of egregiousness that was lacking here, and second, even if the HR director’s email showed the county was aware of an overtime problem generally, it did not indicate an awareness of an FLSA overtime problem specifically.
Further, the district court’s holding on liquidated damages did not require the appeals court to favor the employees on willfulness; for example, a lack of evidence going to good faith was not the same as evidence in support of intentionality. Accordingly, the district court was correct that trial evidence did not support a willfulness finding.
Attorneys’ fees. The appeals court next reviewed the “reasonableness” of the attorneys’ fee award for abuse of discretion. Plaintiffs’ counsel first argued that the district court erred as a matter of law in reducing the fee award below the lodestar amount. In the 2010 case of Perdue v Kenny A, the Supreme Court spoke glowingly of the lodestar approach and its advantages over the Johnson factors. Yet the court still left room for the factors identified by the Fifth Circuit in Johnson v. Georgia Highway Express, Inc.
Here, the district court followed the proper lodestar-then-Johnson factors process, ruled the Third Circuit. It rejected the argument that the downward deviation was impermissible. Finding that the district court applied the correct law, the appeals court found no abuse of discretion in determining that the relatively modest damage award justified a reduction in the lodestar. Accordingly, the judgment of the district court was affirmed.
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