Betty Black v. SettlePou, P.C.
732 F.3d 492
| 5th Cir. | 2013Background
- Black, a former SettlePou employee (2005–2010), was initially non-exempt and paid overtime at 1.5× her regular rate.
- In 2007 Black was reclassified as exempt and alleged she remained owed overtime for extra hours worked, leading to a FLSA misclassification claim and a jury finding of willful violation for 274 overtime hours.
- The district court calculated actual damages using the fluctuating workweek (FWW) method, paying 274 hours × half of Black’s rate ($28.89) = $3,957.93, and also awarded equal liquidated damages of $3,957.93.
- Black and her counsel sought higher damages (1.5× rate) and challenged the FWW approach; the court denied alteration of judgment.
- The court also awarded attorney’s fees using lodestar methodology, then reduced by 25% due to disappointment over a retaliation claim.
- On appeal, the Fifth Circuit held there was no mutual agreement for a fixed weekly salary to cover fluctuating hours, so the FWW method did not apply, and the district court’s damages, liquidated damages, and fees awards were reversed and remanded for recalculation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FWW applies in misclassification cases | Black argues no FWW unless a fixed weekly wage covers fluctuating hours. | SettlePou argues FWW may apply under § 778.114 if there is a fixed salary for fluctuating hours. | FWW does not apply; no agreement for fixed salary covering fluctuating hours. |
| Whether actual overtime damages were calculated correctly | Damages should be 1.5× regular rate for overtime hours. | FWW method yields half-rate damages under the salary agreement. | Damages recalculated; district court’s calculation erroneous under no FWW agreement. |
| Whether liquidated damages should be vacated | Liquidated damages follow correct actual damages; court erred by miscalculation. | Liquidated damages permitted given willful violation. | Liquidated damages vacated and remanded for recalculation. |
| Whether attorney’s fees should be vacated/remanded | Fees should be based on correct damages and Johnson factors; not prematurely reduced. | Lower lodestar reasonable given limited recovery. | Attorney’s fees vacated and remanded for reconsideration consistent with recalculated damages. |
Key Cases Cited
- Overnight Motor Transportation Co. v. Missel, 316 F.2d 572 (U.S. 1942) (authority for using the fluctuating workweek method in weekly wage contracts)
- Blackmon v. Brookshire Grocery Co., 835 F.2d 1135 (5th Cir. 1988) (FWW appropriate when employer and employee agree on fixed salary for varying hours)
- Ransom v. M. Patel Enterprises, Inc., 734 F.3d 377 (5th Cir. 2013) (cannot rely on Section 778.114 for retroactive misclassification damages; focus on Missel/Blackmon)
- Missel v. Overnight Motor Shipping, 316 U.S. 572 (U.S. 1942) (establishes Missel framework for FWW in weekly wage contracts)
- Umikis-Negro v. Am. Family Prop. Servs., 616 F.3d 665 (7th Cir. 2010) (discusses retroactivity and remedial nature of FWW application)
- Lamonica v. Safe Hurricane Shutters, Inc., 711 F.3d 1299 (11th Cir. 2013) (retroactivity of § 778.114 not remedial; consideration of FWW in misclassification)