Chicago Attorney Peter Kim Wins Summary Judgment in FLSA Case

Litchfield Cavo’s Chicago office partner Peter C. Kim won summary judgment on behalf of the firm’s clients, an optometry clinic and the physician owner, in a wage and hours case.

Plaintiff, a former client employee, alleged that the clinic shortchanged him his overtime pay by failing to properly calculate his overtime rate of pay. Plaintiff claimed that he should have been paid 1.5 times the rate of $25 per hour, when in fact the clinic paid him 1.5 times the rate of $15.52. Thus, because there was a dispute as to the agreed-upon hourly rate, plaintiff argued that summary judgment was inappropriate. He sought the difference in the overtime calculation, liquidated damages and attorneys’ fees.

Peter argued that the rate of calculation for overtime hours under the Fair Labor Standards Act is based on the hourly rate actually paid, rather than what plaintiff thought his hourly rate should have been. He explained that if plaintiff’s interpretation is accepted, then it would “open the floodgates” of FLSA litigation because every employee who has a dispute about their pay rate would argue that overtime was not properly calculated. The FLSA further incentivizes plaintiffs’ attorneys to take on even the tiniest of overtime disputes because of the mandatory attorneys’ fee provision awarded to a prevailing employee.

The federal court agreed with Peter’s arguments and found that the dispute regarding rate of pay ($25 versus $15.52) is irrelevant to an FLSA case because the clinic actually paid plaintiff a straight time of $15.52 and 1.5 times $15.52 for overtime hours. Plaintiff’s disagreement over his hourly rate is a state law contract issue and not an FLSA overtime action. As such, the federal court granted summary judgment in favor of the clinic.

FLSA cases are particularly difficult because of the employers’ burden to prove its defenses and the specter of an outsized attorneys’ fees award. This case law helps to reign in, ever so slightly, the on-going wage and hours lawsuits that continue to be filed against employers.