Number of New FLSA Lawsuits Filed Each Year Continues to RiseBy Anthony R. McClure, Litigation News Associate Editor – October 14, 2010
The number of new cases filed each year in federal district courts under the Fair Labor Standards Act [PDF] continues to rise. Employment litigators are adjusting their practices to meet the larger demand. Litigators are also analyzing the causes behind the increase in filings.
The FLSA, enacted in 1938, provides standards for minimum wage and overtime pay. Generally, the act requires employers to pay covered employees, who are not otherwise exempt, at least the federal minimum wage and overtime pay of 1.5 times the regular rate of pay as calculated for each workweek.
The act provides that an action to recover lost wages and other damages may be maintained against any employer, including a public agency, in either federal or state court “by any one or more employees for and in behalf of himself or themselves and other employees similarly situated.” It also provides that the court shall, in addition to any judgment, “allow a reasonable attorney’s fee to be paid by the defendant, and costs of the action.”
According to data collected from PACER’s Case Locator service operated by the Administrative Office of U.S. Courts, the number of FLSA related cases filed in federal district courts nationwide rose from 5,210 in 2008 to 6,118 in 2009. Between January 1 and September 30 of this year, PACER has already recorded the filing of 5,304 FLSA related cases in federal district courts. That number reflects a more than 13 percent increase in FLSA case filings over the same period in 2009.
This increased activity also appears to be focused in a few specific regions. From January 1 to September 30 of this year, according to PACER, the U.S. District Court for the Southern District of Florida recorded the filing of 932 new FLSA related cases and the Middle District of Florida recorded 685. Based on PACER’s data, those two Florida district courts alone account for approximately 30 percent of the FLSA related cases filed nationwide as of September 30. PACER data also shows that district courts in New York have a significant, and increasing, number of FLSA cases.
Employment Litigators Respond to Increased Demand
Both plaintiff and defense attorneys have noticed the increase. “In my practice, whereas class and collective wage and hour defense may have been 20 percent of my practice going back five years, now I would say it is 75–80 percent of my practice,” says John A. Ybarra, Chicago, cochair of the Hot Topics Subcommittee for the ABA Section of Litigation’s Employment and Labor Relations Law Committee, who describes his practice as “perhaps a typical employment defense practice.”
Alan G. Crone, Memphis, cochair of the Employment Law Subcommittee of the Section of Litigation’s Class Actions and Derivative Suits Committee, represents plaintiffs in employment cases. “Probably right now the vast majority of my practice is FLSA representation,” he says. “I have been doing these cases for 11 years now and for the first 5 or 6 of those years nobody really did them,” Crone says. Now, “I get a lot more FLSA calls than I used to,” he notes.
Why Are FLSA Filings Increasing?
Commentators have offered varying opinions as to why there has been such an increase in FLSA lawsuits. A primary reason cited is the fee-shifting provision in the FLSA, which some say creates an incentive for plaintiff’s attorneys to engage in these cases. Ybarra agrees. “I think fee shifting does draw the plaintiff’s bar into this where they believe that if they can get any form of recovery they are going to get attorney fees,” he says. “I am not necessarily sure that that’s true, but I think that the plaintiff’s bar believes that.”
Crone believes the increase also could be the result of increased marketing efforts by certain plaintiff’s firms. “I know the Middle District of Florida has been inundated with these cases because of a group of firms down there that have been very aggressive,” he says. If similarly aggressive marketing efforts are being pursued in other significant markets around the country, Crone believes those efforts may have more to do with the increase in cases than other reasons.
Others believe that plaintiff’s attorneys are now advising their clients to file FLSA claims even though some clients do not initially seek counsel for that purpose. Crone has seen this in his practice. “Most people who have good FLSA claims don’t realize it,” he says. “Therefore, the way I have always historically found them is someone comes to see me about a wrongful termination complaint and as you are interviewing them they say something like, you know ‘they fired me for no reason and that’s really terrible because I worked all of this overtime and really didn’t get paid for it.’”
Crone says that employees are often hesitant to bring FLSA claims because they fear retaliation from their employers. “People are told early on, ‘well we don’t pay overtime for that,’ and they just accept it,” he says. “It is awfully hard to make a claim like that against your current employer without at least worrying a little bit about ‘well, what are they going to think of me because I made this claim.’”
Ybarra attributes much of the increase in FLSA filings to what he describes as “copycat cases.” “What we often see is copycat complaints filed against the same client in different districts. And by copycat I do mean everything—the allegation, the substance, the mistakes, and everything.” Ybarra notices this especially with regard to “large national clients.” He also sees “copycat cases” filed against similar companies within the same industry, such as retail and manufacturing.
Another often cited reason is that the FLSA contains “gray” areas, and people may disagree as to what constitutes a violation. “It is easy for an industry to have been doing something a certain way for years and years, for dozens of years perhaps, which at one point would have been overlooked as being insignificant, but increasingly that is subject to question,” Ybarra says. “There is more of a tendency now to call it out, even where it seems to be a very insignificant or technical violation if it is there at all.”
Ybarra is concerned about the impact that this increase in filings will have on businesses. “Once one of these cases is filed,” he says, “ for the company to defend themselves in this area and to mount a rigorous defense and not be held up, they are going to have to spend a significant amount of money.” “American business, especially large corporations, are spending a tremendous amount of money in many cases where the claims are not viable,” he says. And Ybarra has not seen any indication that the trend is slowing.
Keywords: litigation, FLSA, employment and labor
- October 19, 2010 – Courts are not forcing employers to pay the contractual amount, but just the minimum wage and overtime at the contractual rate of pay, without penalty. Employers are telling Wage & Hour Division personnel to sue them or have the complainant sue them because they know that most attorneys will not assist the single employee in getting wages due them. The single employee earning around the minimum wage can not afford to even call an attorney much less file an action against an employer. Once a case is before the court, the judgement does not order the employer to pay, which means the employer gets a second chance to not pay anything. Wage & Hour Division can only do what the law allows it to do legally. And, it does everything possible to get compliance in all cases it confronts.
- November 8, 2010 – Reasons for the increase? (1) Violations are rampant; (2) the FLSA is counter-intuitive; (3) competition in other practice areas, along conservative rulings in other employment cases, such as discrimination cases; (4) employers settle these cases fairly easily. When I started my practice in 2002, after representing management, very few people were handling these cases. Now, it is getting more competitive. As Plaintiffs' attorneys have been squeezed out of other practice areas, they have found the lush green hills of the FLSA.
- January 16, 2011 – You should talk to an attorney who practices in Florida. Nothing in this article is novel to anyone who deals with it - it's old news. And it's a really unfortunate situation for Florida employers that try hard to do the right thing and are victimized by these plaintiffs' firms over the most minor of violations.