Should Disproportionate Attorney's Fees Doom Proposed FLSA Settlements?

Last month, a federal district court in Maryland rejected a proposed FLSA settlement as unreasonable based on the amount of the proposed attorney’s fees.  In Gionfriddo v. Zinc, et al., the Court compared the amount the individual plaintiffs were to recover ($15,000.18) to the proposed attorney’s fees ($100,000), and found the disproportionate figures unpalatable.  Review of attorney’s fees provisions in pure-FLSA settlements occurs when settling parties submit their agreement to the court for approval as a “fair and reasonable compromise” of a bona fide dispute.  Without such approval, there is a significant risk that the plaintiff will have been deemed to have never waived their FLSA claims, and thus can sue their employer again even after already having received a payment pursuant to settlement.

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