EMPLOYMENT AGREEMENT AND POWER OF ATTORNEY
I. SCOPE OF AGREEMENT
This Employment Agreement and Power of Attorney (“Agreement”) is entered into by and between Baron & Budd, P.C. (“B&B”), Lazarz & Prieto PLLC (“LP”; B&B and LP referred to as “Lead Attorneys”), and Forester Haynie PLLC (“FH”), Nelson National Law Group LLC (NN), and Damon J. Baldone, A Professional Law Corporation (DB; B&B, LP, FH, NN, and DB collectively referred to as “Attorneys”), on the one hand, and Client on the other hand, for legal representation in prosecuting claims for damages sustained by Client due to violations of the federal Fair Labor Standards Act (“FLSA”) and applicable state laws related to wage payment (FLSA and relevant state laws referred to as “Wage and Hour Laws”), while employed by ______________________ (“Employer”).
Client has not contracted with Attorneys for representation and/or legal advice in any matter other than representation and or legal advice in a dispute under Wage and Hour Laws. Representation and/or legal advice for any matter other than one under Wage and Hour Laws requires the execution of a separate contract for each and every such matter. Client understands that Attorneys cannot and will not render any advice or legal services on local, state, or federal tax issues/laws.
II. ATTORNEYS’ FEES
A. Contingency Fee Agreement
This Agreement is a contingency fee contract. In consideration of the services rendered and to be rendered to Client, Client does hereby grant, assign, and convey to Attorneys an undivided interest of 40% of the Gross Recovery for back wages, liquidated damages, and all other recovery related to wage and hour dispute.
If Attorneys do not recover money for Client, Client will not owe any attorneys’ fees. Attorneys are not requiring Client to provide a retainer fee, and Attorneys are assuming the risk for whether or not they will be compensated for their legal services and costs rendered on behalf of Client, and thus the reason for the contingent fee arrangement as opposed to Client paying hourly out of pocket legal fees and costs regardless of case success.
B. “Upside-Down” Clause
Wage and Hour Laws typically require that prevailing plaintiffs receive mandatory attorneys’ fees. As a result, there will typically be an amount of any settlement recovery or final judgment or award payable in consideration of incurred attorneys’ fees. Any such attorneys’ fees will be added to any recovery for back wages, liquidated damages, and all other recovery to determine the Gross Recovery.
However, if the mandatory attorneys’ fees awarded exceed the amount of fees owed to Attorneys under this Agreement (as provided in Paragraph II.A), then all of the awarded attorneys’ fees will be retained by Attorneys. In that case, Client shall retain all of the recovery for back wages, liquidated damages, and all other recovery except attorneys’ fees and costs.
C. Equalization in the Event of Settlement
The Parties to this Agreement agree that, if a recovery is made by means of settlement (whether informally or through mediation) only, the Gross Settlement Amount shall be used to equalize the Client’s Maximum Potential Recovery and the Actual Fees pursuant to the following formula so that the discount to the Client is proportionate to the discount to Attorneys:
The Gross Settlement Amount shall be divided by the sum of the Maximum Potential Recovery and the Actual Fees. The resulting percentage (“Discount Percentage”) shall be used to discount the Maximum Potential Recovery and Actual Fees equally. The resulting figures shall be used to calculate the attorneys’ fees owed by Client to Attorneys pursuant to the “Upside-Down” Clause provided in Section II.B, above. Specifically, Client will owe 40% of the Gross Settlement Amount as attorney’s fees. However, if the Equalized Settlement Fee Award is greater than 40% of the Gross Settlement Amount, then Attorneys shall retain the Equalized Settlement Fee Award. In that case, Client shall retain the entirety of the Equalized Settlement Recovery to Client, less costs.
Examples of the applicable procedure are provided below:
For example, assume Client’s Maximum Potential Recovery is $75,000 and Attorneys have incurred $5,000 in Actual Fees. Client elects to settle the case for the Gross Settlement Amount of $50,000. In that example, the recovery to the Client would be determined as follows:
Step One: Determine Percent Discount
GROSS SETTLEMENT AMOUNT
MAXIMUM POTENTIAL RECOVERY
($75,000) + ACTUAL FEES ($5,000):
Step Two: Calculate Discounted Recovery and Attorneys’ Fees
EQUALIZED SETTLEMENT RECOVERY TO CLIENT
$75,000 * .625 =
EQUALIZED SETTLEMENT FEE AWARD
$5,000 * .625 =
Because in this example the Equalized Settlement Fee Award is less than 40% of the Gross Settlement Amount (i.e., $3,125 < ($50,000*.4 = $20,000), Attorneys shall be entitled to 40% of the Gross Settlement Amount (i.e., $50,000 * .4 = $20,000). Client shall be entitled to 60% of the Gross Settlement Amount, less expenses (i.e., $50,000 * .6 = $30,000-expenses).
As another example, assume Client’s Maximum Potential Recovery is $10,000 and Attorneys have incurred $100,000 in Actual Fees. Client elects to settle the case for the Gross Settlement Amount of $50,000. In that example, the recovery to the Client would be determined as follows:
($10,000) + ACTUAL FEES ($100,000):
$10,000 * .4̅5 =
$100,000 * .4̅5 =
Because the Equalized Settlement Fee Award exceeds 40% of the Gross Settlement Amount (i.e., $45,454.55 > ($50,000*.4 = $20,000)), Client shall retain 100% of the $4,545.45, less costs.
D. No Equalization of Gross Recovery in the Event of Final Proceedings
The foregoing equalization formula shall apply only in the event of a recovery made by means of settlement. If Client’s case proceeds to trial or a final arbitration hearing (hereinafter “Final Proceedings”), and a recovery is collected subject to the terms of judgment or a final arbitration award (hereinafter “Judgment”), the attorneys’ fees owed by Client to Attorneys are calculated pursuant to the “Upside-Down” Clause provided in Section II.B, above. Examples of the procedure are provided below:
For example, assume Client receives Judgment of $75,000 in actual damages and $1,000 in attorneys’ fees for a Gross Recovery of $76,000.
Because the fee award is less than 40% of the Gross Recovery (i.e., $1,000 < ($76,000*.4 = $30,400), Attorneys shall be entitled to 40% of the Gross Recovery (i.e., $76,000 *.4 = $30,400). Client shall be entitled to 60% of the Gross Recovery, less expenses (i.e., $76,000*.6 = $45,600 – expenses).
As another example, assume Client receives a Judgment of $5,000 in actual damages and $75,000 in attorneys’ fees for a Gross Recovery of $80,000.
Because the fee award exceeds 40% of the Client’s Judgment (i.e., $75,000 > ($5,000*.4 = $2,000), Client shall retain 100% of the $5,000, less expenses. Attorneys shall be entitled to the $75,000 in awarded attorneys’ fees.
E. Deferred Settlements
In the unlikely event that payment of all or any part of the amount to be received will be deferred (such as in the case of an annuity, a structured settlement, or periodic payments), the Gross Settlement Amount for purposes of calculating attorneys’ fees will be the initial lump-sum payment plus the present value, as of the time of settlement, final arbitration award, or final judgment, of the payments to be received thereafter. Attorneys’ fees will be paid out of the initial lump-sum payment. If the payment is insufficient to pay attorneys’ fees in full, the balance will be paid from subsequent payments on the recovery before any distribution to Client.
III. CO-COUNSEL NOTICE AND DISCLOSURE OF RATES
A. Fee Division
Client has agreed that Attorneys shall prosecute the case jointly as co-counsel. Co-Counsel will assume joint responsibility for the prosecution of Client’s claim.
The fee split will not increase the total fee owed by Client. Client understands and approves the division of legal fees between the Attorneys.
At the conclusion of the case, if a recovery is made on Client’s behalf, the Attorneys will share the attorneys’ fees due under this Agreement pursuant to Section II as follows:
FH, NN, and DB shall receive a share of the Attorneys’ Fees equal to 33 1/3% of 40%of the Client’s Equalized Settlement Recovery, with FH receiving 8 1/3%, NN receiving 12 1/2%, and DB receiving 12 1/2% respectively, and B&B and LP shall share the remainder of the Attorneys’ Fees, with B&B receiving 50% and LP receiving 50% of the remainder.
For example, assume Client agrees to settle under the terms in Section II.C.1 of this Agreement. In that example, the Equalized Settlement Recovery to Client was $46,875, and the Attorneys’ Fees due under this Agreement totaled to $20,000. Accordingly, FH, NN, and DB would be entitled to to $6,250.00 (i.e., $46,875*.4*.̅33) of the $20,000 in Attorneys’ Fees, with FH receiving $1,562.50, NN receiving $2,343.75, and DB receiving $2,343.75 respectively, while B&B and LP would each be entitled to $6,875 (i.e., ($20,000-$6,250)/2).
As another example, assume the Client agrees to a settlement under the terms in Section II.C.2 of this Agreement. In that example, the Equalized Settlement Recovery to Client was $4,545.45, and the Attorneys’ Fees due under this Agreement totaled to $45,454.55. Accordingly, FH, NN, and DB would be entitled to$606.06 (i.e., $4,545.45*.4*.̅33) of the $45,454.55 in Attorneys’ Fees, with FH receiving $151.52, NN receiving $227.27, and DB receiving $227.27 respectively, while B&B and LP would each be entitled to $22,424.25 (i.e., ($45,454.55-$606.06)/2).
FH, NN, and DB shall receive a share of the Attorneys’ Fees equal to 33 1/3% of the attorneys’ fees owed by Client to Attorneys as calculated pursuant to the “Upside-Down” Clause provided in Section II.B, above, with FH receiving 8 1/3%, NN receiving 12 1/2%, and DB receiving 12 1/2% respectively, whileB&B and LP shall share the remainder of the Attorneys’ Fees, with B&B receiving 50% and LP receiving 50% of the remainder.
For example, assume a Judgment is obtained as in Section II.D.1 of this Agreement. There, the Client obtained a Judgment for $75,000, and the Attorneys’ Fees due under this Agreement totaled to $30,400. Accordingly, FH, NN, and DB would be entitled to $10,000.00 (i.e., $75,000*.4*.̅3) of the $30,400 in Attorneys’ Fees, with FH receiving $2,500, NN receiving $3,750, and DB receiving $3,750 respectively, while B&B and LP would each be entitled to $10,200 (i.e., ($30,400-$10,000)/2).
As another example, assume a Judgment is obtained as in Section II.D.2 of this Agreement. There, the Client obtained a Judgment for $80,000 ($5,000 in actual damages and $75,000 in attorneys’ fees). FH, NN, and DB would be entitled to $666.66 from the Attorneys’ Fee Award (i.e., $5,000*.4*.̅3), with FH receiving $166.66, NN receiving $250, and DB receiving $250 respectively, while B&B and LP would each be entitled to $37,166.67 (i.e., ($75,000-$666.66)/2).
B. Disclosure of Billing Rates
The Actual Fees referred to above are based on the time spent by lawyers and legal assistants who work on this case. The Actual Fees will represent all time spent in representing you, including, by way of illustration, but not limited to: telephone and office conferences with you, consultants (if any), opposing counsel, and others; conferences among our lawyers and legal assistants; factual investigation; legal research; responding to your requests for us to provide information to you; and drafting letters, motions and other documents.
The Actual Fees referred to above are also based on the customary billing rates of the various attorneys and legal assistants who work on your case. Disclosed below are the billing rates of attorneys who are anticipated to work on your case, and the billing rates of unknown attorneys who may work on your case based on years of experience
Ricardo J. Prieto: $400/hourMelinda Arbuckle: $375/hourUnknown attorney(s); 50-20 years of experience: $600/hourUnknown attorney(s); 20-10 years of experience: $450/hourUnknown attorney(s); 5-10 years of experience: $350/hourUnknown attorney(s); 0-5 years of experience: $300/hourParalegals: $150/hourAdministrative Assistants/Secretaries: $120/hour
C. No Obligation to Pursue Appeal
Notwithstanding the percentage contingency interest attributable to recovery after appeal, Attorneys are not obligated to pursue an appeal on behalf of Client, but may do so at their sole discretion.
Client and Attorneys agree that, if after investigation of the facts and research of the law, Lead Attorneys believe that Client’s claims are of limited merit, Lead Attorneys may terminate this agreement with Client and withdraw from representation in accordance with applicable disciplinary rules and rules of procedure. Said termination will release Attorneys from any further action on Client’s claim, and discharge Attorneys from this Agreement. Termination will be effected by certified mail with return receipt requested or by delivery service with signature receipt to the last mailing address provided by Client to Attorneys.
V. COSTS AND OTHER EXPENSES
It will be necessary for Attorneys to incur and advance certain court costs and other types of litigation-related expenses for Client. These costs and other expenses may include, but are not limited to, the following: filing and service fees; legal research fees; travel expenses (including air fare, ground transportation, vehicle mileage, lodging and meals); deposition expenses and court reporter fees; mediation fees and expenses; and miscellaneous copying, postage, shipping, and courier expenses. In addition, it may be necessary to employ expert witnesses to examine and report on the facts of Client’s cause of action/rebut Employer’s expert witnesses/claims. Client agrees that Lead Attorneys may, in their discretion, employ and pay these expert witnesses. Client further agrees to reimburse Attorneys for all such costs and expenses from Client’s share of any money recovered by settlement or judgment. Upon receipt by Attorneys of the proceeds of any settlement, judgment, or other payment, Attorneys shall (1) retain attorneys’ fees as previously described above, (2) deduct from Client’s share of the proceeds any costs and expenses, and (3) disburse the remainder of Client’s share of the proceeds to Client. Additionally, Client understands that Attorneys may incur certain expenses that jointly benefit multiple clients of Attorneys related to the subject matter of Client’s case. Client agrees that Attorneys may divide such expenses equally among Client and all other clients of Attorneys who benefit from such expenses.
VI. GROUP SETTLEMENT
Client understands that Attorneys may determine that it is in Client’s best interest for Client’s case to be filed and/or go to trial with and/or be settled with a larger group of claimants. Client retains the right to accept or reject any such settlement offers. Client gives permission to Attorneys to disclose Client’s name, claim information, gross settlement offer amount, net settlement offer amount, or other material terms of Client’s settlement offer to other claimants also represented by Attorneys who may receive settlement offers as part of the same Settlement Agreement, to the extent that such disclosure is necessary to comply with any applicable court orders, and/or applicable disciplinary and ethics rules. Additionally, Client understands that if a dispute subsequently arises between clients represented by Attorneys that the attorney-client privilege may not be available for assertion by Client against other clients represented by Attorneys.
VII. POWER OF ATTORNEY
Client gives Attorneys a power of attorney to execute all reasonable and necessary documents connected with the handling of this cause of action. In the event that settlement funds are recovered on behalf of Client and Client cannot be located and neither he/she nor the Client’s legally authorized representative can be located or contacted, through reasonable efforts, for a period of 90 days from the date the funds are received, Client gives Attorneys a Power of Attorney and authorizes Attorneys to disburse and receive from the gross settlement funds held in its trust and/or escrow account(s), the attorneys’ fees due to Client’s counsel and reimbursement for the costs and other expenses (as specified in this Agreement) that have been advanced by counsel on Client’s behalf.
VIII. COOPERATION; ADDRESS CHANGE; RETURN OF DOCUMENTS; WITHDRAWAL
Client agrees to promptly cooperate with Attorneys to permit Client’s claims to be investigated and developed; to disclose to Attorneys facts relevant to the claim; and to be reasonably available to attend any necessary meetings, depositions, preparation sessions, hearings and trial. Client understands that no guarantee of success is made, or can be made, by Attorneys in connection with Client’s claims made the subject matter of this agreement, and that the chance of success is largely dependent on Client’s reasonable and prompt participation in Client’s case.
Client agrees to notify Attorneys in writing of each change in Client’s mailing address, phone number and email address, during the term of this representation no later than seven (7) days of each such change of address/number.
When the case is over, Attorneys will provide Client the opportunity to obtain file documents and materials. However, if Client has not retrieved those documents and materials within ninety (90) days after Attorneys have given Client written notice that the case is over or representation is terminated, Attorneys may dispose of those documents and materials.
IX. DEATH OF CLIENT
The provisions of this Agreement will not terminate upon the death of Client whose signature appears below. In the event of the death of Client, any duly appointed Representative of Client’s heirs and/or estate will be bound by this Agreement to the extent allowed by applicable law. In particular, any such Representative will be bound by the provisions of this Agreement relating to the recovery of attorneys’ fees and costs and other expenses from any settlement entered into by Client prior to his/her death.
X. SURVIVAL AND CHOICE OF LAW
The provisions contained in this Agreement that by their nature and context are intended to survive the completion and performance, cancellation or termination of this Agreement, shall so survive. If any provision in this Agreement is deemed by competent authority to be unenforceable, the remaining provisions herein shall remain in effect and survive the removal of any such unenforceable provision herein.
This Agreement shall be governed by and construed according to the laws of the State of Texas. Attorneys and Client expressly agree that this Agreement was entered in Dallas County, Texas and that Dallas County, Texas is the proper and exclusive venue for any legal dispute between Attorneys and Client.
XI. LITIGATION HOLD NOTICE
Client is hereby advised that all materials related to the claims made the subject matter of this Agreement should be safeguarded and not destroyed by Client. All documents relating to the claims made the subject matter of this Agreement should be promptly given to Attorneys. This includes, but is not limited to, pay stubs, records of hours worked, and communications between Client and employer/former employer.
El cliente entiende expresivamente y acepta que el cliente no debe firmar este Acuerdo sin obtener primero la traducción y la comprensión plena del presente Acuerdo. If Client’s primary language is not English, then Client confirms by Client’s signature below that a translator who speaks both English and Client’s primary language verbally translated this Agreement for Client, and that Client understands the scope and meaning of this Agreement. Client expressly understands and agrees that Client should not sign this Agreement without first obtaining translation and full understanding of this Agreement.
XIII. COMPLIANCE WITH RULES OF PROFESSIONAL CONDUCT
This Agreement shall be governed by, and comply with, the Texas Disciplinary Rules of Professional Conduct (“the Rules”); however, to the extent that any other state’s rules or laws may apply, or to the extent that application of any term of this Agreement shall be inconsistent with the Rules, then this Agreement shall be modified to be consistent with all applicable rules and laws. In addition, and in accordance with joint orders of the Texas Supreme Court and the Texas Court of Criminal Appeals, please take notice that those Courts have adopted the Texas Lawyer’s Creed—A Mandate for Professionalism. The Creed and the Standards contain standards applicable to lawyers in their conduct towards the legal system generally, to clients, to other lawyers, and to judges. A principal goal of the Creed and the Standards is to reduce abusive tactics in litigation. In accordance with the orders of those Courts, Attorneys attempt to comply with the Creed and the Standards for Appellate Conduct, and Attorneys encourage Client to become familiar with the Creed and the Standards and to ask Attorneys any questions about whether and how they apply to the litigation process. A copy of the Creed may be obtained by requesting a copy from Attorneys or on the Texas Bar Website at:
Click to access Lawyers-Creed.pdf
The State Bar of Texas investigates and prosecutes professional misconduct committed by Texas attorneys. Although not every complaint against or dispute with a lawyer involves professional misconduct, the State Bar Office of General Counsel will provide you with information about how to file a complaint. For more information, please call, toll free, 1-800-932-1900.
 The Parties agree that “Gross Settlement Amount” shall mean the total amount of money to be paid by the Employer under the Settlement Agreement.
 The Parties agree that “Maximum Potential Recovery” shall mean Lead Attorneys’ estimate of the total damages, including liquidated damages and all other recovery, to which Client may reasonably be entitled based on readily available data at the time Settlement is reached, excluding any potential award of attorneys’ fees.
 The Parties agree that “Actual Fees” shall mean all documented legal fees incurred by Attorneys according to the billing rates disclosed in Section III of this Agreement at the time Settlement is reached.
 In no event shall this formula result in an Equalized Settlement Recovery to Client (See Note 6) in excess of Client’s Maximum Potential Recovery. In the unlikely event that multiplying the Discount Percentage yields an Equalized Settlement Recovery to Client in excess of Client’s Maximum Potential Recovery, Client shall recover from the Gross Settlement Amount the Client’s Maximum Potential Recovery less costs, and shall owe Attorneys the remainder as Attorneys’ Fees.
 The Parties agree that “Equalized Settlement Fee Award” shall mean the result of multiplying the Actual Fees by the Discount Percentage.
 The Parties agree that “Equalized Settlement Recovery to Client” shall mean the result of multiplying the Maximum Potential Recovery by the Discount Percentage.
BARON & BUDD, P.C. By: 3102 Oak Lawn Avenue, Suite 1100 Date: Dallas, Texas 75219(214) 521-3605
LAZARZ & PRIETO PLLC By: 11 Greenway Plaza, Suite 1515 Date: Houston, Texas 77046(713) 352-3433
FORESTER HAYNIE PLLC By: 1701 N. Market St. #210 Date: Dallas, Texas 75202(214) 210-2100
NELSON NATIONAL LAW GROUP LLC By: 20 E. Thomas St. Suite 2200 Date: Phoenix, Arizona 85012(602) 777-3333
DAMON J. BALDONE By: A PROFESSIONAL LAW CORPORATION Date: __________________________________162 New Orleans Blvd. Houma, Louisiana 70364(214) 210-2100
September 28, 2020
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Signed by Forester Haynie
Signed On: March 23, 2020
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Document Name: EMPLOYMENT AGREEMENT AND POWER OF ATTORNEY
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