Recent Case Shows the Risk of Companies Taking Overtime Claims to Trial

A recent case in federal court in Connecticut demonstrates how expensive it can be for a defendant to fight an overtime case all the way to trial. Several class representatives filed an overtime misclassification suit on behalf of Associate Professional and Professional System Administrators (collectively, “SAs”) that had been employed by Computer Sciences Corporation (“CSC”). Plaintiffs brought this action under the Fair Labor Standards Act (“FLSA”) and the state laws of Connecticut, California and North Carolina, claiming that Defendant CSC unlawfully classified the SAs as overtime-exempt computer employees. 

In 2015, the Court conditionally certified an FLSA collective composed of all SAs who had the titles “Associate Professional System Administrator,” “Professional System Administrator,” or “Senior Professional System Administrator” and whose yearly earnings were less than $100,000. On June 30, 2017, the Court certified Connecticut and California Rule 23 subclasses of Professional and Associate Professional System Administrators.

In 2017, Defendant petitioned the Second Circuit to appeal this class certification, which the appellate court denied. Trial commenced in December, 2017. On December 20, 2017, the jury returned a verdict in Plaintiffs’ favor on liability on Plaintiffs’ claims under the FLSA and Connecticut and California wage-and-hour law. The jury made a specific finding that Defendant acted willfully in classifying Plaintiffs as exempt. However, the jury also found in Defendant’s favor that Defendant had proved that it and the SAs had a clear, mutual understanding that their fixed salaries were intended as compensation (apart from overtime premiums) for the hours worked each workweek. In November, 2018, the Court issued its ruling on remedies, and then appointed a Special Master to address the calculation of damages. In August, 2019, the Court adopted the Special Master’s recommendation as to damages and entered an amended judgment in favor of the Plaintiffs in the amount of $18,755,016.46. In September, 2019, Class Counsel filed motions for attorneys’ fees and costs, and for service awards. 

In their motions, Plaintiffs’ counsel submitted a lodestar fee of $10,369,189, and asked that this fee be enhanced to $13,616,063.17. CSC raised a number of objections, claiming that both the fees and the enhancement were excessive. The Court first addressed the reasonableness of the Lodestar hourly rates requested by the Plaintiffs’ counsel. Plaintiffs’ counsel asked for rates as high as $975 per hour for its most experienced partners. The Court declined to adopt these rates, instead approving out-of-district hourly rates as high as $725 for the partners who litigated this action, and capping “the hourly rates of all other attorneys at $450, which is within the range of rates generally approved for partners in this district.” The Court also capped the hotly rates of staff, such as paralegals, at $195. The Court also found that some of the hours billed by Plaintiffs’ counsel were too high, ordering a 12%, across-the-board reduction of all hours billed. The Court next declined Plaintiffs’ counsel’s requested fee enhancement, and deducted more than $200,000 in Plaintiffs’ counsel’s expenses, finding them improperly documented. The Court awarded the requested $10,000 in service awards to each of the four class representatives. 

Thus, in sum, the Court ordered CSC to pay Class Counsel $7,740,152.51 in attorneys’ fees for their work on behalf of Plaintiffs. From those attorneys’ fees, the Court ordered Class Counsel to pay a $10,000 service award to each Class Representative, for a total of $40,000, as detailed in this Opinion. The Court further ordered CSC to pay Class Counsel $354,567.90 in litigation costs. 

Even though the Court sustained a number of the Defendant’s objections to the fees and expenses sought by the Plaintiffs, this can hardly be classified as a “win” for CSC. After more than five years of litigation, and an untold amount of money in legal fees to its own counsel, it now faces the prospect of paying near or even more than $30 million, once pre- and post-judgment interest is added. While it has indicated it intends to appeal, it will still be required to post a bond in the full amount of the judgment, as well as face the prospect of be ordered to pay Plaintiffs’ counsel’s appellate fees if the appeal is unsuccessful. This is a stark lesson to all defendants sued for overtime violations that taking such cases to trial is often a painful and expensive endeavor. 

About the author: Josh Borsellino represents workers in claims for unpaid overtime. Josh was not involved in the CSC lawsuit described in this article. If you have questions about overtime pay, call Josh at 817.908.9861 or complete this contact form for a free consultation. 

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