Court Opinion

ID: 1085178
Source: CourtListenerOpinion
Date Created: 2013-10-12 05:29:20.830286+00
Date Added: 2024-06-11T15:46:40.104009
License: Public Domain

Case: 12-10972   Document: 00512405198     Page: 1   Date Filed: 10/11/2013

        IN THE UNITED STATES COURT OF APPEALS
                 FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                 Fifth Circuit

                                                                    FILED
                                                               October 11, 2013

                                 No. 12-10972                      Lyle W. Cayce
                                                                        Clerk

BETTY BLACK, on behalf of herself and all others similarly situated,

                                           Plaintiff - Appellant
v.

SETTLEPOU, P.C.,

                                           Defendant - Appellee

                Appeal from the United States District Court
                    for the Northern District of Texas

Before REAVLEY, ELROD, and GRAVES, Circuit Judges.
JAMES E. GRAVES, JR., Circuit Judge:
      Betty Black is a former employee of SettlePou, and after a jury found that
SettlePou had misclassified Black as exempt from the Fair Labor Standards Act
(FLSA), Black became eligible for an award of unpaid overtime wages. In
computing the overtime payment award, the district court applied the
“Fluctuating Workweek” (FWW) method of calculating overtime by multiplying
the number of overtime hours Black worked by one-half of her regular rate of
pay. Black contends that the FWW method of calculating overtime is not
warranted here, and we agree. We therefore REVERSE the ruling of the district
court, VACATE the amount of actual damages awarded to the plaintiff and
REMAND for recalculation and entry of an appropriate judgment. We further
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VACATE the award of liquidated damages and the amount of attorney’s fees and
REMAND for reconsideration.
                  FACTS AND PROCEDURAL HISTORY
      Betty Black was employed as a legal secretary and paralegal at the Dallas
law firm SettlePou, P.C. from 2005–2010. SettlePou first hired Black in 2005 as
a non-exempt legal secretary, a position in which she received a fixed salary and
overtime premiums at a rate of time and one-half her regular rate of pay in
addition to her salary if she worked more than forty hours per week. Black was
promoted to paralegal in 2006, and remained a non-exempt employee, as defined
by the Fair Labor Standards Act, 29 U.S.C. §§ 201–19 (FLSA), earning overtime
at one and one-half her regular rate of pay. In 2007, SettlePou informed Black
that she was to begin supervising one of their legal secretaries, therefore, she
would be reclassified as exempt. Black became ineligible for overtime pay as an
exempt employee. Immediately following her reclassification Black complained
both verbally and in writing to her supervisor, Karl Morgan who was a partner
with SettlePou, and to SettlePou’s Human Resources Directors stating that she
thought she should be paid overtime for her extra hours worked. Black was
terminated in 2010 and she filed suit against SettlePou on behalf of herself and
all other similarly situated paralegals for violations of the FLSA.
      The collective action suit alleged that SettlePou had misclassified Black
as an exempt employee and sought damages for unpaid overtime wages,
liquidated damages, back pay, and emotional pain and suffering. Black also
claimed that SettlePou had terminated her in retaliation for her complaints
about the lack of overtime pay. A jury found that SettlePou had willfully
violated the FLSA by misclassifying Black as exempt from overtime pay and that
she was owed 274 hours of overtime pay. The jury also found that SettlePou did
not unlawfully retaliate against Black.

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      After the jury rendered its verdict, the district court calculated the amount
of overtime premiums owed to Black by multiplying her 274 overtime hours by
one-half of her hourly pay rate of $28.891 for an actual damages award of
$3957.93. The district court also awarded liquidated damages in the same
amount, as required under the FLSA for SettlePou’s willful violation of the
statute, 29 U.S.C. §216(b), for a total damages award of $7,915.86. Black then
filed a motion to alter or amend the judgment, arguing that the district court
erred in awarding only half the regular hourly rate for the overtime hours
instead of one and one-half times the regular hourly rate of pay. The district
court denied the motion.
      Black’s attorneys also filed a motion to recover their attorney’s fees and
costs. The district court determined the proper lodestar was $232,400.81, but
in its discretion reduced the award to only $45,000.00 in attorney’s fees. Black
appealed both the calculation of actual damages and the award of attorney’s fees
to this Court.
                               STANDARD OF REVIEW
      This Court reviews the district court’s findings of fact only for clear error.
Lee v. Coahoma Cnty., 937 F.2d 220, 224 (5th Cir. 1991) (“We will not disturb the
district court’s fact findings unless they are clearly erroneous.”). This Court
reviews liquidated damages awards for clear error. Singer v. City of Waco, 324
F.3d 813, 823 (5th Cir. 2003). “Clear error exists when although there may be
evidence to support it, the reviewing court on the entire record is left with the
definite and firm conviction that a mistake has been committed.” Hollinger v.
Home State Mut. Ins. Co., 654 F.3d 564, 569 (5th Cir. 2011) (citations,
alterations and internal quotation marks omitted).

      1
          The parties stipulated at trial that Black’s hourly pay rate was $28.89 per hour.

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      In a misclassification case, once the fact finder has established that the
employee is due unpaid overtime, the proper determination of the regular rate
of pay and overtime premium to which an employee is entitled is a question of
law. Ransom v. M. Patel Enterprises, Inc., ___ F.3d ___ No. 12-10972, 2013 WL
4402983, at *3 (5th Cir. Aug. 16, 2013); see also Singer, 324 F.3d at 823 (“We
review de novo the district court’s determination of the regular rate of pay under
the FLSA.”).
      “A district court’s determination of attorneys’ fees is reviewed for abuse of
discretion, and the findings of fact supporting the award are reviewed for clear
error.” McClain v. Lufkin Indus., Inc., 519 F.3d 264, 284 (5th Cir. 2008).
                                 DISCUSSION
      A. Overtime Pay
      The FLSA sets the standard workweek at forty hours and requires
employers to pay non-exempt employees no less than one and one-half times
their regular rate of pay for any hours worked in excess of forty. 29 U.S.C. §
207(a)(1). The FWW is one method of satisfying the FLSA’s overtime pay
requirement. Samson v. Apollo Resources, Inc., 242 F.3d 629, 636 (5th Cir. 2001)
(“[T]he FWW method is one method of complying with the overtime payment
requirements of 29 U.S.C. § 207(a)(1).”).        The FWW is an employment
arrangement in which an employee receives a fixed weekly pay for a fluctuating
work schedule with a varying number of hours worked each week.
      After the trier of fact has found that a misclassified employee is due
overtime pay, the court must determine as a matter of law whether to apply the
standard method of calculating the amount of overtime pay using the one and
one-half times the regular rate of pay multiplier found in the FLSA, or to apply
the FWW multiplier of only one-half of the regular rate of pay. See Ransom,
2013 WL 4402983, at *3 (“[T]he appropriate methodology to determine the total
amount [of overtime pay] owed [is] a question of law.”); Urnikis-Negro v. Am.

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Family Prop. Servs, 616 F.3d 665, 679 (7th Cir. 2010) (stating that the court
“must ascertain the employee’s regular rate of pay and calculate an appropriate
overtime premium based on that rate”). The decision of when and how to apply
the FWW’s half-time formula in misclassification cases has divided the federal
courts. See Urnikis-Negro, 616 F.3d at 666. This division has been focused on
whether the FWW formula as expressed in 29 C.F.R. § 778.114 may be applied
retroactively in misclassification cases.2 See, e.g., Clements v. Serco, Inc., 530
F.3d 1224, 1230–31 (10th Cir. 2008) (applying Section 778.114 to retroactively
calculate overtime premiums in a misclassification case); Valerio v. Putnam
Assocs., Inc., 173 F.3d 35, 40 (1st Cir. 1999) (affirming a district court’s
application of Section 778.114 to calculate overtime damages award in a
misclassification case). But see Lamonica v. Safe Hurricane Shutters, Inc., 711

      2
        29 C.F.R. 778.114(a) explains how and under what circumstances an employer may
compensate an employee under a FWW:
      An employee employed on a salary basis may have hours of work which
      fluctuate from week to week and the salary may be paid him pursuant to an
      understanding with his employer that he will receive such fixed amount as
      straight time pay for whatever hours he is called upon to work in a workweek,
      whether few or many. Where there is a clear mutual understanding of the
      parties that the fixed salary is compensation (apart from overtime premiums)
      for the hours worked each workweek, whatever their number, rather than for
      working 40 hours or some other fixed weekly work period, such a salary
      arrangement is permitted by the Act if the amount of the salary is sufficient to
      provide compensation to the employee at a rate not less than the applicable
      minimum wage rate for every hour worked in those workweeks in which the
      number of hours he works is greatest, and if he receives extra compensation, in
      addition to such salary, for all overtime hours worked at a rate not less than
      one-half his regular rate of pay. Since the salary in such a situation is intended
      to compensate the employee at straight time rates for whatever hours are
      worked in the workweek, the regular rate of the employee will vary from week
      to week and is determined by dividing the number of hours worked in the
      workweek into the amount of the salary to obtain the applicable hourly rate for
      the week. Payment for overtime hours at one-half such rate in addition to the
      salary satisfies the overtime pay requirement because such hours have already
      been compensated at the straight time regular rate, under the salary
      arrangement.

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F.3d 1299, 1311 (11th Cir. 2013) (stating that Section 778.114 “is not a remedial
measure that specifies how damages are to be calculated”) (citing Urnikis-Negro,
616 F.3d at 666); Urnikis-Negro, 616 F.3d at 666 (“[S]ection 778.114(a) itself does
not provide the authority for applying the FWW method in a misclassification
case.”); Russell v. Wells Fargo & Co., 672 F. Supp. 2d 1008, 1013 (N.D. Cal. 2009)
(holding that Section 778.114 “cannot be used to calculate overtime pay
retroactively in a misclassification case”).
      Courts have rejected the application of Section 778.114 as a basis for
applying the FWW method in misclassification cases for various reasons. Some
courts have found that the rule on its face is forward looking, and therefore is
not a remedial measure. See, e.g., Lamonica, 711 F.3d at 1311; Urnikis-Negro,
616 F.3d at 677–78.      Section 778.114 also requires the contemporaneous
payment of overtime premiums at one-half the employee’s regular rate of pay,
a requirement that by definition has not been met in an employee’s suit for
unpaid overtime premiums. Id. at 677–79.
      In rejecting the retroactive application of Section 778.114, courts have
relied instead on the Supreme Court’s endorsement of the FWW method in
Overnight Motor Trans. Co. v. Missel, 316 U.S. 572 (1942) for the authority to
calculate the overtime premium using the FWW half-time multiplier. See, e.g.,
Lamonica, 711 F.3d at 1311 (“[U]nder Missel, the fluctuating workweek method
may be used to calculate an employee’s regular rate of pay and corresponding
overtime premium for use in determining damages under the FLSA.” (citation
omitted)); Desmond v. PNGI Charles Town Gaming, L.L.C., 630 F.3d 351, 357
(4th Cir. 2011) (holding that “Overnight Motor provides the appropriate method
for calculating the unpaid overtime compensation”); Urnikis-Negro, 616 F.3d at
666 (holding that Missel provides the authority for applying the FWW method
in calculating overtime premiums). The Supreme Court explained in Missel that
the FWW half-time multiplier may be used to calculate overtime when the

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employee had been working under a “contract [that] is for a weekly wage with
variable or fluctuating hours.” 316 U.S. at 580.
      In Ransom v. M. Patel Enterprises, Inc., this Court decided that Section
778.114 cannot be used to support a retroactive damages award in
misclassification cases. Ransom, 2013 WL 4402983, at *7 (finding that Section
778.114 “is not a remedial measure” (citing Urnikis-Negro, 616 F.3d at 666)
(internal quotations omitted)).      Instead, we rely on the Supreme Court’s
precedent in Missel and this Court’s own precedent in Blackmon v. Brookshire
Grocery Co., 835 F.2d 1135 (5th Cir. 1988), as the appropriate basis for using the
FWW method to calculate the overtime premiums due to the employee in
misclassificaiton cases.    Ransom, 2013 WL 4402983, at *6 (noting that
“Blackmon and Missel reflect the same instruction”). The FWW method of
calculating overtime premiums in a misclassification case is appropriate when
the employer and the employee have agreed that the employee will be paid a
fixed weekly wage to work fluctuating hours. See Blackmon, 835 F.2d at
1138–39 (holding that the FWW method of overtime calculation is appropriate
“when the employer and the employee have agreed on a fixed salary for varying
hours”); see also Ransom, 2013 WL 4402983, at *6 (“FWW is the proper method
of calculating overtime when an employee . . .[is] paid a weekly wage and [is]
expected to work fluctuating hours.”). Accordingly, this Court will proceed in
determining whether the FWW applies to calculating Black’s overtime premiums
based on the guidance found in Missel and Blackmon.
      The question of whether an employer and employee agreed to a fixed
weekly wage for fluctuating hours is a question of fact. Id. at *3 (“[T]he number
of hours the [employee’s] fixed salary was intended to compensate . . . is a
question of fact.”). The district court in this case made no specific finding of fact
as to the terms of Black’s employment agreement with SettlePou, yet it applied
the half-time multiplier of the FWW when calculating Black’s damages for

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overtime.3 Because the district court applied the FWW half-time multiplier
when calculating Black’s overtime premium, the district court implicitly
determined that SettlePou and Black agreed that her fixed weekly salary was
intended to compensate her for all the hours she worked each week no matter
how her hours fluctuated.4          This Court reviews this finding of fact for clear
error. Lee, 937 F.2d at 224.
       The parties’ initial understanding of the employment arrangement as well
as the parties’ conduct during the period of employment must both be taken into
account in determining whether the parties agreed that the employee would
receive a fixed salary as compensation for all hours worked in a week, even
though the number of hours may vary each week. Ransom, 2013 WL 4402983,
at *7 (concluding that the parties’ “course of conduct, along with the parties’
initial understanding of the employment arrangement, establishes that the

       3
       In its Judgment issued January 20, 2012 the district court provided the following
statement regarding its calculation of damages:
             It is therefore ORDERED, ADJUDGED, AND DECREED that judgment
             is rendered for Betty Black and that Betty Black have and recover the
             sum of actual damages in the amount of THREE THOUSAND NINE
             HUNDRED FIFTY-SEVEN DOLLARS AND NINETY-THREE CENTS
             ($3,957.93) from SettlePou, P.C. These damages for overtime wages are
             calculated by multiplying 274 hours (as found by the jury) by half of
             Betty Black’s regular rate of $28.89 (as stipulated by the parties at trial
             on November 10, 2011).

Black promptly filed a Motion to Alter or Amend Judgment. The district court denied her
motion in a Memorandum Opinion and Order dated August 12, 2012 without any further
explanation:
             In Betty Black’s Motion to Alter or Amend Judgment (Doc. No. 110), she
             contends that the proper method of calculating Betty Black’s unpaid
             overtime compensation is at a one-and-one-half-times rate and that the
             judgment should be amended accordingly. The Court disagrees. Betty
             Black’s Motion to Alter or Amend Judgment (Doc. No. 110) is DENIED.
       4
         Plaintiffs correctly point out that the district court judge stated during trial that he
was “going to follow the Blackman [sic] case.” Therefore, this Court presumes the district
court intended to follow the rule in Blackmon when applying the FWW method, which requires
a finding that “the employer and the employee have agreed on a fixed salary for varying
hours.” 835 F.2d at 1138.

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[employees] were to be paid a fixed salary for the total number of hours they
worked in a week”). We address each issue in turn.
              1.     The Parties’ Initial Understanding
       When SettlePou hired Black in 2005, the parties initially agreed that
Black would be given a fixed weekly salary and time and one-half of her regular
hourly pay for any hours worked beyond forty. When SettlePou reclassified
Black as exempt from the overtime requirements of the FLSA in 2007, the
parties’ employment agreement changed, raising the issue of whether SettlePou
and Black mutually agreed that she would receive a fixed salary to compensate
her for fluctuating weekly hours under her new employment arrangement. See
Id. at *3 (stating that “the most important issue in resolving [the] appeal [is] the
[employees’] employment arrangement between them and their employer”).
       As directed by Missel, the FWW method may only be applied to calculate
overtime premiums when there is a contractual agreement between the
employer and the employee that the employee will be paid a fixed weekly wage
for hours that fluctuate from week to week.5 Missel, 316 U.S. at 580; see also
Blackmon, 835 F.2d at 1138.            However, there is no requirement that the
employment agreement be in writing. Ransom, 2013 WL 4402983, at *6.
Accordingly, we turn to the parties’ testimony regarding their understanding of
the terms of their employment agreement when Black was reclassified. During
trial, Black testified that it was her understanding that she would be
compensated with a fixed weekly wage to work a regular schedule of 37½ hours

       5
         Appellees contend that the only requirement necessary to establish a FWW is an
understanding that the employee would receive a salary rather than hourly wages, regardless
of the workweek. As authority for this proposition Appellees cite Tolentino v. C & J Spec-Rent
Servs. Inc., 2010 WL 2735719, at *3, n.3 (S.D. Tex. July 12, 2010). Tolentino discusses the
“clear and mutual understanding” requirement in 29 C.F.R. 778.114(a), stating its view that
“[t]he Fifth Circuit has interpreted this requirement broadly, essentially requiring only an
understanding that the employee would be salaried rather than hourly, regardless of the
workweek.” Id. (citations omitted). Because we do not apply Section 778.114 retroactively in
misclassification cases, this case offers Appellees no support.

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per week, even though she was now classified as exempt. Kimberly Williams,
SettlePou’s Human Resources Director who informed Black of her change to
exempt status, testified that she too was unaware of any fluctuating workweek
agreement with Black. SettlePou partner David O’Dens testified that a full-time
employee’s regular workweek at SettlePou was, as Black had explained, 37½
hours per week. The parties’ testimony weighs in favor of finding that Black and
SettlePou had agreed that Black’s weekly salary was intended only to
compensate her for a regularly set schedule of 37½ hours per week.
       The payroll records Black received from SettlePou also support her
testimony that she understood that her fixed weekly pay was intended to
compensate her for a regular schedule of 37½ hours per week. Black’s payroll
records show that she was being compensated for “full time employment” and
SettlePou’s own Employee Handbook defines “[f]ull-time” as “[a]ny employee
who is regularly scheduled to work thirty-seven and one-half (37½) hours per
week.” An employee who is expected to work a regular schedule of hours is not
typically paid by a FWW method, since by definition the FWW requires that the
employee be expected to work fluctuating weekly hours.6
       Black’s statements at trial regarding her understanding that she was to
work a regular schedule are starkly different than was the case in Ransom, in
which the plaintiff-employees testified that they knew they were expected to
work fluctuating hours when they applied for their jobs. Id. at *5 (noting the
employees’ testimony “establish[ed] that the plaintiffs understood that the hours

       6
         SettlePou’s employee handbook does explain that “[e]xempt employees are paid a
salary for performance of their jobs and are not eligible for compensatory time off or overtime
pay for time worked in excess of their standard workweek.” SettlePou’s statement of policy
that exempt employees are not compensated for overtime, however, sheds no light on whether
full time paralegal employees such as Black were expected to regularly work overtime or a
fluctuating schedule. As this Court held in Ransom, the FWW may only be applied when the
employee is paid a “weekly wage and [is] expected to work fluctuating hours.” 2013 WL
4402983, at *6.

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would fluctuate but their weekly salary would not”). SettlePou’s own
documentation of the regular 37½ hour workweek outlined in its employee
handbook also distinguishes this case from our analysis in Ransom, in which the
employment application itself stated that employees may “work a flexible
schedule where days and number of hours scheduled is different each week.” Id.
Black’s testimony and supporting documentation, showing that she understood
her fixed weekly salary was only intended to compensate her for a standard 37½
hour workweek, weighs against applying the FWW method to calculate overtime
premiums in this case.
            2.     The Parties’ Course of Conduct
      The parties’ conduct during the period of employment may also be
determinative of whether the parties agreed that a fixed salary would
compensate the employee for a fluctuating schedule of hours worked each week.
Singer, 324 F.3d at 824 (“We can determine how many hours the salary is
intended to compensate by examining what happens under the [employment]
contract.”); see also Ransom, 2013 WL 4402983, at *5; Urnikis-Negro, 616 F.3d
at 681 n.8 (“The existence of [a FWW] agreement may be . . . inferred from the
parties’ conduct.” (citations omitted)). Although Black testified that she expected
to work a regular schedule of 37½ hours per week, the jury found that she
worked 274 hours of overtime. Therefore it is clear that Black’s schedule did
fluctuate above her standard workweek at least some of the weeks she was
employed with SettlePou, yet SettlePou only compensated her with the same
fixed weekly salary no matter how many hours she worked.
      SettlePou argues that Black’s conduct in accepting her fixed weekly pay,
without any additional compensation for hours worked above the standard
workweek, is conclusive of the fact that Black understood and agreed that her
fixed weekly salary would cover all of her hours worked on her varying schedule.
Therefore, SettlePou contends, her conduct is evidence of a FWW agreement.

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The critical issue in this case, however, is not only whether SettlePou paid Black
a fixed salary for varying hours, but whether SettlePou and Black had agreed
that a fixed salary would compensate her for all of the hours she worked each
week. Ransom, 2013 WL 4402983, at *3; Blackmon, 835 F.2d at 1138.
      Black testified that she expected to work a set schedule of 37½ hours every
week, and the record evidence shows that when Black found herself working
more than that number she lodged both verbal and written complaints with her
supervisor and SettlePou’s Human Resources Directors about the fact that her
pay did not compensate her for the extra work. Black’s conduct in asserting that
she should be receiving additional pay for the extra hours worked distinguishes
this case from Urnikis-Negro, in which the court found a FWW was established
by the parties’ course of conduct when the employee accepted her fixed weekly
pay no matter how many hours she worked and never asked for any additional
overtime pay. 616 F.3d at 669. Black’s conduct in her continued protests of
SettlePou’s failure to compensate her for her overtime hours, on the other hand,
shows that she did not agree that her fixed weekly salary should compensate her
for all of the hours she worked each week. Accordingly, the parties’ course of
conduct also weighs against application of the FWW method to calculate Black’s
overtime premiums.
      By immediately and repeatedly voicing her disagreement with her lack of
overtime pay after being reclassified as exempt, Black did much, short of
quitting her job, to show that she did not agree that her fixed weekly salary was
intended to compensate her for all of the hours she worked each week.
Accordingly, it was clear error for the district court to apply the overtime
calculation method found in Missel and Blackmon.
      B. Liquidated Damages and Attorney’s Fees
      In cases of FLSA violations, the FLSA provides for actual damages in
unpaid overtime as well as an “additional equal amount as liquidated damages.”

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29 U.S.C. § 216(b). A district court may decline to award liquidated damages if
the court finds that the employer “acted in good faith and had reasonable
grounds to believe that its actions complied with the FLSA.” Singer, 324 F.3d at
822–23 (internal quotations and citations omitted). Because the jury found that
SettlePou had acted willfully in violating the FLSA, SettlePou cannot show that
it acted in good faith. Therefore, a liquidated damages award is warranted. See
id. at 823 (awarding liquidated damages when a jury finds an employer’s FLSA
violation was willful); Heidtman v. Cnty. of El Paso, 171 F.3d 1038, 1042 (5th
Cir. 1999) (noting that when an employer does not act in good faith “it would
have been an abuse of discretion if the district court had not awarded liquidated
damages” (emphasis original)). Because we have held that the district court
erred in calculating the amount of actual damages due in overtime pay, we also
vacate the liquidated damages award and remand to the district court for
recalculation. Ransom, 2013 WL 4402983, at *9 (“Because we have held that the
district court erred in calculating actual damages . . . we also vacate the
liquidated damages award . . . .”).
      Under the FLSA, an employer who violates the statute is also required to
pay attorney’s fees. 29 U.S.C. 216(b) (“The court . . . shall, in addition to any
judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney’s fee
to be paid by the defendant . . . .”); Singer, 324 F.3d at 829 n.10. “This Court
uses the ‘lodestar’ method to calculate attorney’s fees.” Heidtman, 171 F.3d at
1043 (citing Fender v. Zapata Partnership, Ltd., 12 F.3d 480, 487 (5th Cir.
1994)); Saizan v. Delta Concrete Prod. Co, 448 F.3d 795, 799 (5th Cir. 2006)
(“[W]e use the lodestar method to calculate an appropriate attorney’s fee award
under the FLSA.”). The lodestar is calculated by multiplying the number of
hours an attorney reasonably spent on the case by an appropriate hourly rate,
which is the market rate in the community for this work. Smith & Fuller, P.A.
v. Cooper Tire & Rubber Co., 685 F.3d 486, 490 (5th Cir. 2012). There is a strong

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presumption of the reasonableness of the lodestar amount. Perdu v. Kenny A.,
559 U.S. 542, 552 (2010); Saizan, 448 F.3d at 800. However, after calculating
the lodestar, a district court may enhance or decrease the amount of attorney’s
fees based on “the relative weights of the twelve factors set forth in Johnson.”
Id.7 The lodestar may not be adjusted due to a Johnson factor that was already
taken into account during the initial calculation of the lodestar. Id. (noting that
applying the same Johnson factor during the initial calculation and then again
to adjust the lodestar “would be impermissible double counting”). This Court
reviews the district court’s award of attorney’s fees for abuse of discretion and
its factual findings for clear error. Singer, 324 F.3d at 829 (citing Mathis v.
Exxon Corp., 302 F.3d 448, 461–62 (5th Cir. 2002)).                     Under the abuse of
discretion standard, this Court “inspect[s] the district court’s lodestar analysis
only to determine if the court sufficiently considered the appropriate criteria.”
Louisiana Power & Light Co. v. Kellstrom, 50 F.3d 319, 329 (5th Cir. 1995)
(emphasis original); accord Saizan, 488 F.3d at 800; Singer, 324 F.3d at 830.
       Plaintiffs seeking attorney’s fees have the burden of showing the
reasonableness of the hours billed and that the attorneys exercised billing
judgment. Saizan, 448 F.3d at 799. In their claim for attorney’s fees, Black’s
attorneys voluntarily reduced their billing hours by excluding any hours that
were related strictly to Black’s retaliation claim, since Black was not successful
in proving that claim. Black’s attorneys further reduced their hours by an

       7
         The Johnson factors are: (1) the time and labor required; (2) the novelty and difficulty
of the issues in the case; (3) the skill requisite to perform the legal services properly; (4) the
preclusion of other employment by the attorney due to acceptance of the case; (5) the
customary fee charged for those services in the relevant community; (6) whether the fee is
fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the
amount involved and the results obtained; (9) the experience, reputation, and ability of the
attorneys; (10) the undesirability of the case; (11) the nature and length of the professional
relationship with the client; and (12) awards in similar cases. Johnson v. Georgia Highway
Exp., Inc., 488 F.2d 714, 717-19 (5th Cir. 1974) abrogated on other grounds by Blanchard v.
Bergeron, 489 U.S. 87 (1989).

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    Case: 12-10972       Document: 00512405198          Page: 15     Date Filed: 10/11/2013

                                       No. 12-10972
additional 25% to compensate for their failure to recover on that claim. The
District Court ultimately determined that the lodestar offered by Black of
$232,400.81 was “reasonable and supported by evidence.” The district court’s
finding that the lodestar was reasonable is not at issue in this appeal.
       The district court then proceeded with the analysis of the remaining
Johnson factors. While the district court noted that three of the Johnson factors
weighed in favor of an upward adjustment and one factor weighed against
reduction of the lodestar amount,8 it ultimately concluded that a 25% voluntary
reduction in hours was insufficient given that Black had lost the retaliation
claim, resulting in her recovery of only “about $8,000 in damages instead of the,
at least, $97,000 in damages she requested.” The district court found that it was
“appropriate to significantly reduce the lodestar based on [that] fact” and
awarded attorney’s fees in the amount of $45,000. On appeal, the parties
dispute whether the reduction of the lodestar amount was an abuse of discretion.
       This Court has held that “the most critical factor in determining an
attorney’s fee award is the degree of success obtained.” Id. at 799 (citing Singer,
24 F.3d at 829) (internal quotations omitted); Ransom, 2013 WL 4402983, *at 9.
However, this Court has also held that “[w]hile a low damages award is one
factor which the court may consider in setting the amount of fees, this factor
alone should not lead the court to reduce a fee award.” Saizan, 488 F.3d at 799;
accord Singer, 324 F.3d at 830; Hollowell v. Orleans Reg’l Hosp. LLC, 217 F.3d
379, 392 (5th Cir. 2000). Accordingly, while the district court must take the

       8
         The district court stated that the following Johnson factors had already been
considered in calculating the proper lodestar: the time and labor involved, the skill required
to perform the legal services properly, and the experience, reputation and ability of counsel.
It further found that the Defendant’s admission of misclassifying Black, and the fact that the
parties heavily contested the proper method of calculating overtime payments, both warranted
an upward adjustment of the lodestar. It further noted that SettlePou had previously been
a source of referrals for Black’s attorneys’ law firm, a fact that also weighed against a
reduction of the lodestar amount.

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                                  No. 12-10972
degree of success obtained into account, it would be an abuse of discretion for the
district court to reduce Black’s attorney’s fee award solely on the basis of the
amount of damages obtained. Because we are vacating the actual and liquidated
damages awards, we also vacate and remand the attorney’s fee award for
reconsideration consistent with this opinion. See Ransom, 2013 WL 4402983, at
*9 (vacating the attorney’s fee award and remanding for reconsideration when
the amount of damages under the FLSA was also vacated); West v. Nabors
Drilling USA, Inc., 330 F.3d 379, 395 (5th Cir. 2003) (vacating the attorney’s fee
award for reconsideration when the awards of back pay and liquidated damages
were also reversed).
                                CONCLUSION
      In summary, we hold the record evidence shows that there was no
agreement between Black and SettlePou that Black would receive a fixed weekly
wage to work fluctuating hours. Therefore, under Missel and Blackmon there
is no basis on these facts for applying the FWW method of calculating Black’s
overtime premiums using the half-time multiplier. Accordingly, the amount of
damages the district court awarded as overtime pay is clearly erroneous. We
REVERSE the ruling of the district court, VACATE the amount of actual
damages, and REMAND for recalculation consistent with this opinion. We
further VACATE the liquidated damages award and attorney’s fees award and
REMAND for recalculation of those awards.

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                                 No. 12-10972
REAVLEY, Circuit Judge, specially concurring:

        I concur but emphasize how unusual this case is.         When the same
salary is paid for hours of work that fluctuate weekly for years, without
anything said, that evidence will support a finding that the employer and
employee have agreed on the fixed salary for all hours worked. If the salary
is only for 40 hours of work and the compensation does not change when
overtime is worked, the employee is working then for no pay at all. Strange it
may be, but that is this case. And the evidence is conclusive.

        From the time Black began to work for this law firm in 2005, she was
paid a fixed salary and any overtime hours were kept weekly for her
compensation—at one and a half times the hourly wage. In 2007 she was told
that she had supervisor duties and would no longer be paid for overtime
work.     But except to term her exempt from overtime pay, nothing else
changed about her employment terms or compensation. Only then she was
not paid anything for overtime work.

        Black did not agree. She complained repeatedly. And when the parties
came to this trial, they stipulated on the hourly wage ($28.89) as 1/40 of the
weekly wage ($1,153.77). They agreed that the weekly wage was paid for only
40 hours. Black’s complaint for not being paid anything for her overtime
hours was justified. And so is the judgment of this court.

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