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Brooke Etzel v. Brinker International Payroll Company

January 4, 2012

BROOKE ETZEL, PLAINTIFF,
v.
BRINKER INTERNATIONAL PAYROLL COMPANY, L.P., DEFENDANT.



REPORT AND RECOMMENDATION T O THE U NITED S TATES D ISTRICT C COURT:

This cause came on for consideration, without oral argument, on the following motion:

MOTION: FIRST AMENDED JOINT RENEWED MOTION TO APPROVE FLSA SETTLEMENT AND DISMISS WITH PREJUDICE (Doc. No. 34) THEREON it is RECOMMENDED that the motion be GRANTED.

On November 18, 2011, Plaintiff and Defendant jointly moved the Court to approve their settlement agreement (the "Agreement") pursuant to the Fair Labor Standards Act ("FLSA") and to dismiss the case with prejudice. Doc. No. 30. Under the Agreement, the parties agree to settle Plaintiffs' claims for $14,076.94 in exchange for a release of all claims, distributed as follows: $8,989.70 to Plaintiff's attorney, Barbas, Nunez, Sanders, Butler & Hovsepian; $2,387.24 to Plaintiff's attorney, Shellist, Lazarz, Slobin, LLP; $1,350.00 to Plaintiff for unpaid wages; and $1,350.00 to Plaintiff for liquidated damages. Doc. No. 30-1 at 1-2. The Court denied the motion because the parties did not provide this Court with any information to determine whether the compromise amount Plaintiff agreed to is fair. Doc. No. 31. The Court also denied the motion because the parties did not provide any information by which this Court could determine whether the sums being paid to Plaintiff's counsel, $8,989.70 to Barbas, Nunez, Sanders, Butler & Hovsepian and $2,387.24 to Shellist, Lazarz, Slobin, LLP, is reasonable under the lodestar method. Doc. No. 31.

On December 12, 2011, the parties renewed their motion to approve their Agreement and dismiss the case with prejudice. Doc. No. 32. In their renewed motion, the parties set forth reasons why Plaintiff compromised her claim and attached an affidavit from Plaintiff's counsel, Steven E. Hovsepian, Esq., along with detailed time sheets supporting the reasonableness of the attorney's fees being paid to Barbas, Nunez, Sanders, Butler & Hovsepian. Doc. No. 32-2. However, Plaintiff did not provide an affidavit and detailed time sheets supporting the reasonableness of the payment of $2,387.24 in attorney's fees to Shellist, Lazarz, Slobin, LLP. Consequently, the Court denied the renewed motion. Doc. No. 33.

On January 4, 2012, the parties once again renewed their motion to approve their Agreement (hereafter "Motion"). Doc. No. 34. In the Motion, the parties indicate there was no collusion behind the Agreement. Doc. No. 34 at 2. The parties represent that they conducted extensive discovery, after Plaintiff filed her court interrogatories, that resulted in Plaintiff reducing the "estimated total hours relevant to the asserted tip pool violations." Doc. No. 34 at 3 n.1. The parties indicate the suit involved "complex legal issues of first impression" (Doc. No. 34 at 2, ¶ 5), and that similar cases have resulted in the plaintiff sometimes recovering nothing. Doc. No. 34 at 3. "Against this backdrop, Plaintiff's counsel was able to negotiate a reasonable settlement for the Plaintiff . . . that secured her entire damages, half of her liquidated damages, plus a reasonable amount of attorney's fees, which did not diminish Plaintiff's award." Doc. No. 34 at 3. Attached to the Motion are affidavits and detailed time sheets supporting the attorney's fees to be awarded to Plaintiff's counsel. Doc. No. 34.

In Lynn's Food Stores, Inc. v. United States Department of Labor, 679 F.2d 1350, 1352-53 (11th Cir. 1982), the Eleventh Circuit addressed the means by which an FLSA settlement may become final and enforceable:

[t]here are only two ways in which back wage claims arising under the FLSA can be settled or compromised by employees. First, under section 216(c), the Secretary of Labor is authorized to supervise payment to employees of unpaid wages owed to them. . . . The only other route for compromise of FLSA claims is provided in the context of suits brought directly by employees against their employer under section 216(b) to recover back wages for FLSA violations. When employees bring a private action for back wages under the FLSA, and present to the district court a proposed settlement, the district court may enter a stipulated judgment after scrutinizing the settlement for fairness.

Thus, unless the parties have the Secretary of Labor supervise the payment of unpaid wages owed or obtain the Court's approval of the settlement agreement, the parties' agreement is unenforceable. Id. See also Sammons v. Sonic-North Cadillac, Inc., 2007 WL 2298032 at *5 (M.D. Fla. Aug. 7, 2007) (noting that settlement of FLSA claim in arbitration proceeding is not enforceable under Lynn's Foods because it lacked Court approval or supervision by Secretary of Labor). Before approving an FLSA settlement, the court must scrutinize it to determine if it is "a fair and reasonable resolution of a bona fide dispute." Id. at 1354-55. If the settlement reflects a reasonable compromise over issues that are actually in dispute, the Court may approve the settlement. Id. at 1354.

In determining whether the settlement is fair and reasonable, the Court should consider the following factors:

(1) the existence of collusion behind the settlement;

(2) the complexity, expense, and likely duration of the litigation;

(3) the stage of the proceedings and the amount of discovery completed;

(4) the probability of plaintiff's success ...


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