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Court Approves $1,250,000 Settlement in Suit Against Tennessee County for Fair Labor Violations

On July 2, 2019, Natasha Grayson – an employee of the Madison County Criminal Justice Complex (“MCCJC”) – filed a collective action lawsuit on behalf of herself and other similarly situated current and former employees seeking to recover unpaid wages, attorney’s fees, and statutory penalties for violations of the FLSA. “Grayson and other employees worked over 40 hours per week but were not paid for their overtime work,” said an article in The Jackson Sun. “The sheriff’s office required CJC employees to show up to work 15 minutes before their eight-hour shift and continue working 15-20 minutes after the shift ended.”

On December 2, 2019, the parties submitted a proposed settlement to the Court. The settlement required Madison County to pay $1.25 million to the Plaintiffs with a condition that 40% of that amount ($500,000) be paid to Plaintiff’s counsel, Michael L. Weinman, for fees and expenses. Plaintiffs had agreed to pay either Weinman’s regular hourly rate or 40% of any amount recovered – whichever was greater.

The Court observed that “[a]n award of attorney’s fees under § 216(b) is mandatory.” Smith v. Serv. Master Corp., 592 F. App’x 363 (6th Cir. 2014). In determining the amount to be awarded under the FLSA, courts begin with the “lodestar amount,” which is calculated by multiplying the number of hours worked by a reasonable hourly rate. Hensley v. Eckerhart, 461 U.S. 424 (1983).

The court may then adjust the amount upward or downward, taking into consideration factors such as (1) degree of success obtained; (2) whether the fee was fixed or contingent; and (3) awards in similar cases. Id. In Hebert v. Chesapeake Operating Inc., 2019 WL 4574509 (S.D. Ohio 2019), it was determined that “the requested fees of 40% of the fund are not reasonable,” finding that “33% is typical for attorney’s fees in common fund, FLSA collective action.” In Chapman v. Jet Mall, 2015 WL 2062099 (E.D. Tenn. 2015), plaintiff’s counsel’s request for a 40% attorney’s fee was rejected as unreasonable.

In the instant case, the Court rejected Weinman’s requested 40% fee. The Court calculated Weinman’s lodestar amount as $239,500 based on his affidavit stating he worked 490 hours at $400 per hour, and his paralegals worked 348 hours at $125 per hour.

The Court then took into consideration that Weinman had obtained a great deal of success for his clients. The Court also considered that Weinman had taken the case on a contingency basis, which meant he had risked earning nothing if the outcome had been unsuccessful. Based on those factors, the Court increased the lodestar amount by $135,500 for an award of $375,000 in attorney’s fees or 30% of the $1.25 million. The remainder of the settlement ($875,000) was to be disbursed to the members of the plaintiff class based upon the number of days worked at the MCCJC between July 9, 2016 and July 9, 2019.

The settlement also required Madison County to pay the arbitration fee in addition to the costs of locating class members and disbursing the funds. See Grayson v. Madison County, 2019 U.S. Dist. LEXIS 212615. 

 

Related legal case

Grayson v. Madison County