Overtime Lawyer Alert: Seventh Circuit Court of Appeals Holds that FLSA’s Fee-Recovery Provision Requires Formal Entry of Judgment

Section 16(b) of the Fair Labor Standards Act (“FLSA”) enables workers who win FLSA wage and overtime lawsuits to recover attorney’s fees and expenses. See 29 U.S.C. sec 216(b). Specifically, Section 16(b) provides: “The court in such action shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney’s fee to be paid by the defendant, and costs of the action.” 29 U.S.C. sec. 216(b) (emphasis supplied). Congress included this fee-recovery provision because, as we all know, most workers cannot afford to pay a lawyer out of their own pockets.

This brings us to a July 30, 2019 opinion issued by the Seventh Circuit Court of Appeals in Fast v. Cash Depot, Ltd., 18-3571. There, the employee’s lawyer filed a petition for attorney’s fees after the employer, as a result of the FLSA lawsuit, voluntarily paid the employee all of the wages and liquidated damages he possibly could recover under the FLSA. Citing language from the fee-recovery statutes in federal civil rights statutes, the employee’s lawyer asserted that fees should be awarded because the employee, having received a full recovery, effectively was a “prevailing party” in the lawsuit. The Seventh Circuit disagreed. Relying on FLSA Section 16(b)’s plain language, the Court held that the recovery of fees required the formal entry of a entry of a “judgment” in the employee’s favor.

The moral of this story is that, when an employers pay-off FLSA plaintiffs as a result of litigation, plaintiff’s lawyers who achieve success for their clients and rightfully desire (and deserve) to be paid for their time should make sure that the district court formerly enters a judgment. While this might seem like a technicality or mere formality, the Seventh Circuit’s Fast decision demonstrates that it is an important step that should be taken. -PW

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