New York Southern District Judge Awards Legal Fees in Amount Equal to Damages in FLSA Case

By Anand A. Patel, Esq.

In a decision that may have significant impact on claims brought by employees pursuant to the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL), Judge Crotty of the Southern District of NY awarded plaintiff’s counsel approximately $3.5 million in attorneys’ fees.  In Torres v. Gristede’s Operating Corp., 04 Civ. 3316, plaintiffs filed a class action and two related lawsuits against the supermarket chain Gristedes for violation of NYLL and FLSA.  Shortly before trial, the parties settled for $3.5 million exclusive of attorneys’ fees.

An employer who violates the FLSA minimum wage and overtime regulations is liable for the employee or employees’ unpaid wages, an additional equal amount as liquidated damages and the employee plaintiffs’ attorneys’ fees.

Plaintiffs sought over $4 million in attorneys’ fees and costs.  The Court awarded approximately $3.5 million.  Defense counsel objected stating that legal fees under federal and state labor laws are limited to one third of plaintiff’s damage award.  In rejecting the argument, Judge Crotty noted that the purpose of fee-shifting statutes is to generate attorneys’ fees that may be disproportionate to the plaintiffs’ recovery in an effort to incentivize lawyers to represent civil rights plaintiffs in claims that may have a modest cash value.  In addition, Judge Crotty noted that plaintiff’s fees were directly correlated to defendant’s vigorous approach to litigating the case.  As such, they could not now complain of the amount of time plaintiffs were forced to expend in response.

As noted above, employer’s facing lawsuits for violation of FLSA and NYLL already face substantial financial exposure.  Additionally, employers are individually responsible for back wages owed pursuant to the FLSA and/or NYLL.   The Torres decision could have significant impact on these lawsuits as it provides additional leverage to plaintiffs’ counsel in negotiations with defendants.  Now more than ever, effective, experienced legal representation is critical to successfully defend against these claims and to protect the employer’s business and personal assets.  Tesser, Ryan & Rochman, LLP is a firm with the experience and know-how to defend your interests in the courtroom.