Clarifying FLSA Anti‑Evasion and Prevailing‑Party Fees After Rule 68 Judgments: Commentary on Thompson v. Regions Security Services, Inc.

I. Introduction

This consolidated Eleventh Circuit decision in David Thompson v. Regions Security Services, Inc. (Nos. 24‑11998, 24‑14028) arises from a straightforward set of facts but raises important questions in two distinct areas:

  • Substantive wage-and-hour law under the Fair Labor Standards Act (FLSA), especially the prohibition on manipulating hourly rates to evade overtime; and
  • Litigation mechanics in FLSA cases, including the effect of a Rule 68 offer of judgment on appellate jurisdiction, “prevailing party” status, and entitlement to attorney’s fees and mediation costs.

David Thompson, a security guard employed by Regions Security Services, alleged that the company reduced his hourly “regular rate” when it began routinely scheduling him for 60-hour workweeks, thereby neutralizing the economic benefit Congress intended to confer through FLSA overtime. After an earlier appeal established that such a rate-cut scheme can violate the FLSA’s anti-evasion rule, the case returned to the district court, where summary judgment was granted for Thompson on liability.

With liability established, the parties used Federal Rule of Civil Procedure 68(c): Regions offered, and Thompson accepted, a monetary judgment for unpaid overtime and liquidated damages, while explicitly preserving Regions’ right to appeal liability and Thompson’s right to seek attorney’s fees and costs. The district court later awarded Thompson $94,627.50 in attorney’s fees and $858.75 in mediation costs.

Regions appealed both the liability ruling and the fee award, arguing:

  • The appeal was moot by virtue of the Rule 68 judgment;
  • The FLSA was not violated because Thompson “agreed” to work more hours at a lower rate;
  • Thompson was not a “prevailing party” entitled to fees; and
  • The fee and cost awards were excessive and unreasonable.

The Eleventh Circuit affirmed in all respects, offering a careful application of its prior published decision in Thompson v. Regions Security Services, Inc., 67 F.4th 1301 (11th Cir. 2023) (“Thompson I”), and clarifying how Rule 68 judgments, FLSA settlements, and fee-shifting interact.

II. Summary of the Opinion

A. Factual and Procedural Background

Thompson worked for Regions as a security guard from 2015 to 2020. The key wage facts:

  • For several years he was paid $13.00 per hour, with overtime at $19.50 (1.5×) when applicable.
  • In 2019, Regions offered him a schedule of not less than 60 hours per week, but at a reduced base rate of $11.15 per hour, with overtime at $16.73 (still 1.5× the new “regular rate”).
  • This reduced $11.15 rate was lower than his original starting wage of $12.00 per hour.
  • The reduced wage was in effect from July 22, 2019, through July 5, 2020—during which Regions consistently scheduled at least 20 overtime hours per week.
  • When Regions stopped scheduling him for overtime, it restored his base pay to $13.00 per hour.

Thompson sued under the FLSA, claiming Regions had artificially lowered his regular rate to avoid paying genuine time-and-a-half on overtime. The district court initially granted judgment on the pleadings for Regions, but in Thompson I the Eleventh Circuit vacated and remanded, holding that the complaint plausibly alleged the use of “prohibited arithmetic” under 29 C.F.R. § 778.327—i.e., rate manipulation tied solely to hours worked.

On remand:

  • The district court granted summary judgment to Thompson on liability, finding no evidence that Regions reduced his rate for any permissible reason other than the length of his workweek.
  • Regions then made a Rule 68(c) offer of judgment for $5,650.82 (unpaid overtime plus liquidated damages), explicitly:
    • Not admitting liability,
    • Reserving its right to appeal the earlier liability ruling, and
    • Leaving Thompson free to seek attorney’s fees and costs under 29 U.S.C. § 216(b).
  • Thompson accepted; the district court entered judgment for $5,650.82 after conducting a Lynn’s Food fairness review and retained jurisdiction over fees and costs.
  • The court later awarded $94,627.50 in attorney’s fees and $858.75 in mediation costs.

B. Holdings

The Eleventh Circuit’s key holdings are:

  1. Appellate Jurisdiction & Mootness: The Rule 68(c) judgment did not eliminate appellate jurisdiction or moot the case. Because the parties expressly preserved Regions’ right to appeal liability and obtained a stay of execution, the settlement was not a “final, unconditional” monetary settlement of the kind that moots a case.
  2. FLSA Overtime Liability:
    • Thompson I is both binding precedent and law of the case.
    • An employer may not lower an employee’s non-overtime hourly wage solely because the employee’s hours have increased; if it does so, that reduction is treated as an impermissible device to evade overtime requirements under 29 C.F.R. § 778.327.
    • Regions produced no evidence of any factor other than the length of Thompson’s workweek to justify the rate reduction. Summary judgment for Thompson on FLSA liability was therefore proper.
  3. Prevailing-Party Status under the FLSA:
    • Thompson, having obtained a court-entered Rule 68 judgment for damages after a merits ruling on liability, is a “prevailing party” under 29 U.S.C. § 216(b).
    • The Rule 68 judgment bears the necessary “judicial imprimatur,” is enforceable, and reflects a court-approved FLSA settlement under Lynn’s Food Stores.
  4. Reasonableness of Attorney’s Fees:
    • The district court’s lodestar calculation—242.15 hours at $375–$400 per hour, totaling $94,627.50—was within its discretion.
    • Broad objections based on alleged “block billing,” vagueness, and limited monetary recovery did not justify an across-the-board reduction.
    • The court correctly concluded that Thompson obtained excellent results on his single FLSA claim; his unsuccessful pursuit of an additional, related non-overtime wage theory did not require a fee reduction.
  5. Mediation Costs:
    • Mediation expenses are compensable as part of a “reasonable attorney’s fee” under § 216(b) when they are the kind of expense normally billed separately to fee-paying clients.
    • The $858.75 mediation cost award was within the district court’s discretion.

III. Precedents and Authorities Cited

A. FLSA “Regular Rate” and Anti‑Evasion Framework

The court situates this dispute within the Supreme Court’s early FLSA jurisprudence:

  • Walling v. Youngerman‑Reynolds Hardwood Co., 325 U.S. 419 (1945): The “regular rate” is not a label chosen by the parties but “an actual fact,” namely the hourly rate paid for the normal, non-overtime workweek.
  • Walling v. Helmerich & Payne, 323 U.S. 37 (1944): The freedom of contract to set wages is limited by the FLSA’s remedial purposes; employers cannot structure pay in a way that nullifies overtime requirements.
  • Walling v. A.H. Belo Corp., 316 U.S. 624 (1942), and Bay Ridge Operating Co. v. Aaron, 334 U.S. 446 (1948): Address various permissible and impermissible pay schemes but emphasize that mathematical artifices cannot be used to evade overtime.

The operative regulatory provision is 29 C.F.R. § 778.327, sometimes referred to by the panel as the “non-circumvention rule.” It provides that:

  • A rate change that is “justified by no factor other than the number of hours worked” is an unlawful device to evade overtime;
  • In such a case, the wage paid in the non-overtime week is treated as the “regular rate” for all weeks for overtime calculation.

The panel also references 29 C.F.R. § 778.500, which prohibits paying a fixed sum for “overtime” that does not vary with actual overtime hours. Although Regions argued that it complied with § 778.500, the court correctly notes that compliance with that separate rule does not answer whether § 778.327’s anti-evasion rule has been violated.

B. Thompson I and the Law-of-the-Case Doctrine

Thompson I, 67 F.4th 1301 (11th Cir. 2023), is central. There, the Eleventh Circuit:

  • Held that Thompson had plausibly alleged that Regions used “prohibited arithmetic” by lowering his hourly rate when his weekly hours rose;
  • Clarified that employers can lower an employee’s pay rate, but not when the only justification is the number of hours worked;
  • Relied expressly on 29 C.F.R. § 778.327(b), holding that if a wage reduction is driven solely by hours, the higher non-overtime-week rate is the “regular rate” for all weeks.

Under the law-of-the-case doctrine, as summarized in Welch v. United States, 958 F.3d 1093 (11th Cir. 2020), a court is ordinarily bound by earlier appellate rulings in the same case. The panel emphasizes that Thompson I is both:

  • Binding circuit precedent; and
  • Law of the case, controlling the subsequent proceedings absent exceptional circumstances (which are not present here).

Regions’ attempt to relitigate the validity and scope of § 778.327 is rejected on this basis; the court notes that prior discussion of the regulation was not dicta but necessary to the earlier holding that Thompson had stated a claim.

C. Mootness and Appellate Jurisdiction: Consent Judgments and Rule 68

On jurisdiction and mootness, the panel draws on:

  • Hofmann v. De Marchena Kaluche & Asociados, 657 F.3d 1184 (11th Cir. 2011): A party generally cannot appeal a judgment it consented to.
  • Dorse v. Armstrong World Industries, Inc., 798 F.2d 1372 (11th Cir. 1986): Exception where the consent judgment expressly preserves a right to appeal a previously contested issue.
  • Perez v. Owl, Inc., 110 F.4th 1296 (11th Cir. 2024): Reaffirms that parties may settle while explicitly preserving appeal rights as to earlier rulings.
  • Yunker v. AllianceOne Receivables Mgmt., Inc., 701 F.3d 369 (11th Cir. 2012): An accepted Rule 68 offer may moot a case if it represents a final, unconditional settlement and neither party retains a concrete financial stake dependent on the outcome of an appeal.

Applying these cases, the panel holds that:

  • The Rule 68 judgment here expressly preserved Regions’ right to appeal the pre‑existing liability ruling; and
  • Because execution of the judgment was stayed and the funds were deposited with the court, both sides retained a financial stake dependent on the appeal’s outcome.

Thus, unlike in Yunker, the settlement was not “final and unconditional,” and the appeal was not moot.

D. Prevailing Party and Judicial Imprimatur

The court’s “prevailing party” analysis relies on:

  • Buckhannon Board & Care Home, Inc. v. W. Va. Dep’t of Health & Human Res., 532 U.S. 598 (2001): To be a prevailing party, there must be a “material alteration of the legal relationship of the parties” with judicial imprimatur.
  • Smalbein v. City of Daytona Beach, 353 F.3d 901 (11th Cir. 2003): A party can prevail through (a) a judgment on the merits, (b) a court-ordered consent decree, or (c) judicially approved settlements where the court incorporates the settlement into its order or retains jurisdiction to enforce it.
  • American Disability Ass’n v. Chmielarz, 289 F.3d 1315 (11th Cir. 2002): A settlement with incorporated terms or retained jurisdiction is the “functional equivalent” of a consent decree for fee purposes.
  • Dionne v. Floormasters Enters., Inc., 667 F.3d 1199 (11th Cir. 2012): Under FLSA § 216(b), a plaintiff must receive a judgment in his favor to be entitled to fees.
  • Utility Automation 2000, Inc. v. Choctawhatchee Elec. Co‑op., Inc., 298 F.3d 1238 (11th Cir. 2002): An accepted Rule 68 judgment has sufficient judicial imprimatur because it is an enforceable judgment, even if it is entered “mechanically.”

The panel also notes Lynn’s Food Stores, Inc. v. U.S. Dep’t of Labor, 679 F.2d 1350 (11th Cir. 1982), which requires court approval of FLSA settlements to ensure they are a fair and reasonable resolution of a bona fide dispute. This further confirms the judicial character of FLSA settlements resolved by judgment.

E. Fees and Costs: Lodestar, Billing Judgment, and Mediation Expenses

For attorney’s fees and associated costs, the court draws on:

  • Hensley v. Eckerhart, 461 U.S. 424 (1983): Establishes the lodestar method and the central role of “results obtained” in adjusting fees.
  • Pennsylvania v. Delaware Valley Citizens’ Council for Clean Air, 478 U.S. 546 (1986), and City of Burlington v. Dague, 505 U.S. 557 (1992): Confirm the lodestar as the starting point and presumptively reasonable fee.
  • Norman v. Housing Auth. of City of Montgomery, 836 F.2d 1292 (11th Cir. 1988): Fee applicant’s burden to establish reasonable hours and rates.
  • ACLU of Ga. v. Barnes, 168 F.3d 423 (11th Cir. 1999): Courts must enforce “billing judgment” by pruning excessive or redundant hours.
  • Loranger v. Stierheim, 10 F.3d 776 (11th Cir. 1994): Courts may use either an hour-by-hour analysis or an across-the-board cut, with articulated reasons.
  • Villano v. City of Boynton Beach, 254 F.3d 1302 (11th Cir. 2001): Rejects mechanical reductions merely because some theories failed; emphasizes focus on “overall relief obtained.”
  • In re Home Depot Inc., 931 F.3d 1065 (11th Cir. 2019): Requires courts to articulate reasons for fee decisions; specificity corresponds to specificity of objections.
  • Vasconcelo v. Miami Auto Max, Inc., 981 F.3d 934 (11th Cir. 2020): Attorney’s fees in FLSA actions are collateral to the merits and do not prevent formation of a final judgment.
  • Evans v. Books‑A‑Million, 762 F.3d 1288 (11th Cir. 2014): “Reasonable attorney’s fee” includes litigation expenses—such as mediation—if they are customarily billed separately to clients, even if not taxable under 28 U.S.C. § 1920.

IV. Legal Reasoning

A. FLSA Liability: Rate Manipulation as an Evasive Device

The core substantive FLSA question is whether Regions lawfully reduced Thompson’s hourly wage from $13 to $11.15 in connection with his 60-hour workweeks. The court’s reasoning unfolds in three steps:

  1. Identify the regular rate and its significance
    Under 29 U.S.C. § 207(a)(1), overtime must be paid at “not less than one and one-half times the regular rate at which [the employee] is employed.” Drawing on Youngerman‑Reynolds, the “regular rate” is a factual construct: the hourly compensation for the normal non-overtime workweek. It is not whatever the parties choose to call it.
  2. Apply the non‑circumvention rule of § 778.327
    Thompson I held that employers may lower an employee’s rate in some circumstances, but not if the only reason is the number of hours worked. Section 778.327(b) instructs that when a rate reduction is “justified by no factor other than the number of hours worked,” the higher non-overtime-week rate is deemed the regular rate for all weeks for overtime calculations. This prevents employers from using “simple arithmetic” to neutralize overtime:
    • Reduce the base rate;
    • Increase hours beyond 40; and
    • Set an overtime rate that is 1.5× the artificially low rate, thereby keeping total weekly pay roughly flat despite overtime.
    That is exactly what Thompson alleged and what the undisputed summary judgment record showed.
  3. Evaluate Regions’ justification (or lack thereof)
    On remand, the “essential question” (quoting Thompson I) was whether Regions could show any “legitimate factor other than the number of hours in [Thompson’s] workweek” to justify the rate cut. The evidence revealed:
    • Thompson was paid $13/hour in 2018 when working 40 or fewer hours;
    • The rate was reduced to $11.15/hour only while he was working 60-hour weeks;
    • When Regions stopped scheduling him for overtime, the rate was restored to $13/hour;
    • Regions’ own CEO testified that he did not negotiate the rate reduction with Thompson; Thompson described the arrangement as “take-it-or-leave-it.”
    Regions’ only explanation was that Thompson “agreed” to the arrangement because it allowed him to work more hours with one employer instead of two. The court rejected this for two reasons:
    • Employees cannot “contract out” of FLSA rights; private agreements that waive overtime protections are unenforceable (Wethington; Lynn’s Food); and
    • The FLSA bars payment schemes that nullify overtime regardless of employee consent. The question is whether the arrangement violates statutory and regulatory commands, not whether it was subjectively acceptable to the employee.
    Because Regions offered no factor other than the increased hours to justify the lower rate, the court treated the reduction as an evasive device under § 778.327 and affirmed summary judgment for Thompson.

Regions’ reliance on the Ninth Circuit’s Parth v. Pomona Valley Hospital Medical Center, 630 F.3d 794 (9th Cir. 2010), and the 1940s Supreme Court decisions is dismissed as either non-binding or already considered in Thompson I. Moreover, Parth expressly found no conflict with any Department of Labor regulation, whereas Thompson centers on a direct conflict with § 778.327.

B. Appellate Jurisdiction and Mootness After a Rule 68(c) Judgment

The panel carefully distinguishes between two types of settlements, both potentially involving Rule 68:

  • Final, unconditional monetary settlements, where all money is paid and the parties’ rights no longer depend on the outcome of an appeal (as in Yunker); and
  • Conditional settlements preserving appeal rights, where the judgment is subject to reversal on appeal and the parties’ financial stake turns on that appeal (as in Dorse and Perez).

This case is squarely in the latter category:

  • Regions’ Rule 68(c) offer explicitly reserved its right to appeal the liability determination;
  • The district court’s final judgment was expressly based on that offer;
  • Execution was stayed, and funds were deposited with the court; and
  • Success on appeal would affect whether Regions ultimately had to pay anything.

Accordingly, the appeal was not moot, and the court had jurisdiction to review both the liability ruling and the fee award.

C. Prevailing-Party Status in an FLSA Case Resolved by Rule 68

The FLSA’s fee-shifting provision is mandatory: “The court in such action shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney’s fee … and costs of the action.” 29 U.S.C. § 216(b) (emphasis added). The critical questions were:

  1. Was there a “judgment” in Thompson’s favor? and
  2. Did that judgment reflect a “judicially sanctioned” change sufficient to make him a prevailing party under Buckhannon?

The court answers “yes” to both:

  • The Rule 68 judgment awarded Thompson $5,650.82 in unpaid overtime and liquidated damages—monetary relief he had sought from the outset.
  • The judgment was enforceable, issued by the court, and incorporated the terms of the parties’ agreement; the court also explicitly retained jurisdiction to award fees and conducted a Lynn’s Food fairness review, confirming that the settlement was a fair and reasonable resolution of a bona fide FLSA dispute.
  • Under Utility Automation, such a Rule 68 judgment, even if entered “mechanically,” bears sufficient judicial imprimatur because it is a binding and enforceable change in the parties’ legal relationship.

Regions’ attempt to characterize Rule 68 as a purely “ministerial” mechanism lacking judicial approval is rejected. The judgment here is, in both form and substance, a court-sanctioned resolution that satisfies Buckhannon and Smalbein. Thompson is therefore a prevailing party entitled to reasonable fees and costs under § 216(b).

The stay of execution pending appeal does not affect this analysis. The fee determination is collateral to the merits, and a final judgment existed for purposes of both appeal and fee-shifting, as emphasized in Vasconcelo.

D. Reasonableness of Attorney’s Fees

The district court, via a magistrate judge’s report and recommendation (R&R), applied the lodestar method:

  • Hours reasonably expended: 242.15 total hours across three attorneys, covering pleadings, two rounds of appeal-related work, summary judgment briefing, and fee litigation.
  • Reasonable rates: $375–$400 per hour, deemed appropriate based on experience and local market rates.

The resulting lodestar was $94,627.50. The panel finds no abuse of discretion in either the hours or the rates, addressing Regions’ principal objections:

  1. Alleged block billing and vagueness
    Regions claimed the billing records were replete with impermissible “block billing” and vague descriptions. The magistrate judge:
    • Found that the records either separated tasks into distinct entries or combined only closely related tasks in a way that did not impede review;
    • Noted that Regions did not comply with local rules requiring specific, entry-by-entry objections with supporting authority; and
    • Concluded that, except for a few narrow adjustments, Regions’ broad-brush objections were waived or insufficiently developed.
    The Eleventh Circuit defers to this considered evaluation, citing In re Home Depot, where the level of explanation required of a district court depends on the specificity of the objector’s challenges. Given Regions’ largely generic objections, an across-the-board reduction was not compelled.
  2. Degree of success and “limited” monetary recovery
    Regions argued that the approximately $5,600 recovery was too small to support a nearly $95,000 fee award, particularly because Thompson had at one point sought additional non-overtime wages (~$3,500) based on the difference between $11.15 and $13. The court responds:
    • Thompson prevailed fully on his sole pleaded FLSA claim, obtaining 100% of the overtime and liquidated damages he ultimately demanded;
    • The additional non-overtime wage theory arose out of the same “common core of facts” and legal theory (the rate manipulation) and was voluntarily abandoned when Thompson accepted Regions’ Rule 68 offer;
    • Under Hensley and Villano, a fee award need not be reduced merely because every contention did not succeed, particularly where the central claim achieved excellent results; and
    • In FLSA and civil-rights contexts, it is well-established that fees can far exceed the damages recovered, because the statute is enforcing broader public rights and relies on private litigation to do so.
    The court thus finds no abuse of discretion in declining an across-the-board cut tied to the damages amount.

E. Mediation Costs as Part of a “Reasonable Attorney’s Fee”

Finally, the panel addresses whether $858.75 in mediation costs were recoverable. Relying on Evans v. Books‑A‑Million, the court explains:

  • A “reasonable attorney’s fee” under fee-shifting statutes includes “all reasonable expenses incurred in case preparation, during the course of litigation, or as an aspect of settlement of the case.”
  • Such expenses may include mediation costs if (1) they are reasonable, and (2) it is the prevailing practice in the local legal community to bill them separately to fee-paying clients.

The magistrate judge found that mediation fees are commonly awarded in FLSA cases in the Southern District of Florida and that Regions did not argue (or provide evidence) that such costs are not typically billed. The panel therefore affirms the award, noting that non-taxability under § 1920 does not bar their recovery as part of the statutory “attorney’s fee.”

V. Simplifying the Key Concepts

A. “Regular Rate” vs. “Hourly Rate”

The “regular rate” in FLSA parlance is the base hourly rate used to calculate overtime. An employer may label wages in many ways—salary, piece rate, day rate, or hourly rate—but for FLSA purposes, the regular rate is the actual hourly value of the employee’s compensation for non-overtime workweeks.

If an employer maintains a higher rate in non-overtime weeks and slashes it solely when the employee works overtime, the FLSA and its regulations treat that higher, non-overtime-week rate as the true regular rate for computing overtime across all weeks.

B. Law-of-the-Case Doctrine

Once an appellate court decides a legal issue in a case, that decision generally governs subsequent stages of the same case. The parties cannot reargue that issue on remand or in a second appeal absent extraordinary circumstances (like an intervening Supreme Court decision). Here, Thompson I already resolved that rate manipulation based solely on hours could violate the FLSA under § 778.327. That legal conclusion remained binding on the district court and the panel in this second appeal.

C. Rule 68(a) and (c) Offers of Judgment

  • Rule 68(a) allows a defendant to offer to have judgment entered against it on specified terms, shifting certain post-offer costs if the plaintiff rejects and then fails to obtain a more favorable judgment at trial.
  • Rule 68(c) applies when liability has already been determined but the amount of damages remains in dispute; the defendant may then offer judgment on “the extent of liability.”

In both settings, if the plaintiff accepts, “the clerk must then enter judgment.” But as this opinion emphasizes, that judgment is not purely ministerial: it is an enforceable court order that can carry “prevailing party” consequences when paired with judicial approval and retention of jurisdiction.

D. “Prevailing Party” and Judicial Imprimatur

A “prevailing party” is one that obtains:

  • At least some relief on the merits; and
  • A court-ordered change in the legal relationship between the parties (judicial imprimatur).

Purely private settlements, without court involvement, generally do not create prevailing-party status. But once a court:

  • Enters judgment embodying a settlement,
  • Reviews and approves the settlement (as under Lynn’s Food in FLSA cases), or
  • Retains jurisdiction to enforce the settlement,

the necessary judicial imprimatur is present, and fee-shifting statutes such as § 216(b) can apply.

E. Lodestar and Block Billing

The lodestar method multiplies the number of reasonably expended hours by a reasonable hourly rate. Courts then consider adjustments, usually small, based on factors like the degree of success.

“Block billing” refers to lumping multiple unrelated tasks into a single time entry (e.g., 5 hours for “research, drafting motion, emails, meeting”), making it hard to determine whether the time spent on each task is reasonable. Courts sometimes reduce fees where block billing is pervasive and obscures the nature of the work. Here, the magistrate judge found the records sufficiently detailed and not truly block-billed.

F. FLSA’s Non-Waivability and Anti-Evasion Rule

Two fundamental concepts:

  • Non-waivability: Employees cannot sign away their right to minimum wage or overtime under the FLSA. Private agreements that purport to do so are unenforceable absent court or Department of Labor supervision.
  • Anti-evasion: Even when formal time-and-a-half is paid, the FLSA prohibits schemes that make the overtime premium illusory—such as cutting base pay when overtime is scheduled so that total weekly pay barely changes. Section 778.327 specifically targets such manipulations.

VI. Impact and Practical Implications

A. For Employers and HR Professionals

  • Rate changes tied solely to overtime hours are hazardous: If you lower an employee’s regular hourly rate only when that employee begins working overtime, and then restore it when overtime ends, the Eleventh Circuit will likely treat this as a prohibited evasive device.
  • Document independent business reasons: If you adjust pay rates, you must be prepared to show legitimate, non-hour-related reasons (e.g., market conditions, performance issues, restructuring) that are not simply a function of scheduling more hours.
  • Beware of “package deals” that neutralize overtime: Paying the same weekly amount for 40 hours at a higher rate or 60 hours at a lower rate may look efficient, but under the FLSA it can be unlawful if it undermines overtime incentives.
  • Contractual assent will not save an unlawful scheme: Even if an employee “agrees” to the arrangement for his own reasons, that consent does not shield the employer from liability.

B. For Employees and Plaintiffs’ Counsel

  • Rate manipulation is actionable: This decision confirms that employees can challenge wage structures that lower base pay when overtime is offered, even if the formal overtime rate is 1.5× the reduced base.
  • Significant fee awards are possible on modest claims: The court’s willingness to affirm nearly $95,000 in fees on a $5,650 recovery underscores the FLSA’s reliance on private enforcement and its mandatory fee‑shifting regime.
  • Rule 68 can be used strategically: Plaintiffs can accept offers of judgment to secure certain monetary recovery while still preserving their ability to seek full fees and costs; they also gain the status of prevailing parties.

C. For Defense Counsel and Litigators

  • Rule 68(c) is compatible with preserving appeal rights: Carefully drafted offers that expressly reserve appellate rights on liability and are followed by stays of execution will not, under this case, moot an appeal.
  • Fee exposure must be integrated into settlement strategy: Offering judgment on damages after an adverse liability ruling does not eliminate fee exposure; indeed, it may lock in prevailing-party status and shift the battleground to fee reasonableness.
  • Specific, entry-by-entry objections are essential: Broad assertions of block billing or vagueness, without line-specific challenges, are unlikely to persuade courts to make large across-the-board cuts.
  • Mediation costs are recoverable: In FLSA cases, expect courts to award reasonable mediation expenses as part of attorney’s fees where such costs are standard in the local legal market.

D. For Courts

  • Consistency with Thompson I: The decision reinforces the importance of applying § 778.327 and law-of-the-case principles rigorously.
  • Rule 68 judgments as vehicles for fee-shifting: The opinion gives clear guidance that Rule 68 judgments, coupled with Lynn’s Food review and retention of jurisdiction, supply the required judicial imprimatur for prevailing‑party status in FLSA suits.
  • Fee review standards: It affirms that where a plaintiff achieves excellent results on a core claim, courts need not (and should not) mechanically tie fee awards to the ratio of fees to damages or to the success of every subsidiary theory.

VII. Conclusion

This Eleventh Circuit opinion consolidates and applies a number of important principles at the intersection of wage-and-hour law and federal civil procedure.

On the substantive FLSA side, it confirms that:

  • The “regular rate” is a factual concept rooted in the non-overtime workweek;
  • Employers cannot reduce that rate solely because an employee’s hours increase; and
  • Doing so is a prohibited device under 29 C.F.R. § 778.327 to evade the overtime premium Congress mandated.

On the procedural and remedial side, it clarifies that:

  • Rule 68(c) offers of judgment, when properly drafted, do not necessarily moot appeals and can coexist with explicitly preserved appellate rights;
  • An FLSA plaintiff who accepts a Rule 68 judgment after a liability ruling is a prevailing party, entitled to mandatory reasonable fees and costs under § 216(b);
  • Substantial fee awards may be appropriate even when damages are modest, particularly when plaintiffs secure complete success on their main claim; and
  • Mediation expenses can be recovered as part of a reasonable attorney’s fee when consistent with local billing practices.

Taken together, the Thompson decisions send a clear message: courts in the Eleventh Circuit will scrutinize pay arrangements that appear designed to dampen or erase the economic impact of overtime, and they will robustly enforce FLSA rights through fee-shifting mechanisms—even where the individual damages at stake are small. Employers must design compensation structures and litigation strategies with these principles firmly in mind.