Whether it's poker or employment litigation, sometimes it's best just to fold 'em.
With the evidence stacked against it, an employer chose to appeal a Fair Labor Standards Act (FLSA) verdict with a weak defense instead of taking its lumps and avoiding further legal fees.
In 2011, a federal district court had ordered the employer, an automotive detailing business, to pay its employees about $57,000 for unpaid overtime and another $121,000 in attorney fees.
Rather than licking its wounds, the employer appealed to the 5th Circuit Court of Appeals with a mathematically challenged argument. It had acknowledged that its employees worked more than 80 hours during many biweekly pay periods. But it noted that the employees never provided evidence about how many hours they worked during any single 168-hour workweek, which is the basis on which overtime is calculated under the FLSA. As a result, it argued there was not enough evidence to determine the total number of overtime hours actually worked in a given workweek, and the case should be dismissed.
In a ruling issued February 13, Lopez v. Genter's Detailing, +2013 U.S. App. LEXIS 3032 (5th Cir. 2013), the 5th Circuit rejected the employer's argument as "nonsensical." It said:
The plaintiffs and the district court calculated overtime as the number of hours over 80 that a given plaintiff worked in a two-week period. Mathematically, the number of overtime hours calculated in this manner could not possibly be higher than the number calculated under a system that measured the hours over 40 that a given plaintiff worked in a one-week period over the course of those two weeks. For example, if a plaintiff worked 110 hours in two weeks, there is no way that he could have worked less than 30 hours of overtime total during that period if the weeks were separated out from one another. The district court's damages award therefore, if anything, likely understates the amount of overtime pay that [the employer] should have paid plaintiffs ... .
If there is a lesson to be drawn here, it is the importance of soberly appraising the viability of an FLSA defense. Without a reasonable expectation of prevailing in court, an employer facing an FLSA lawsuit would do better to limit its liability by seeking a settlement or making an offer of judgment.
