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Ahmed v. Turk

United States District Court, M.D. Florida, Orlando Division

April 20, 2017

MD M. AHMED and SAJADA BEGUM, Plaintiffs,
v.
JAMAL TURK and HKM3, LLC, Defendants.

          REPORT AND RECOMMENDATION

          KARLA R. SPAULDING, UNITED STATES MAGISTRATE JUDGE

         TO THE UNITED STATES DISTRICT COURT:

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

MOTION: RENEWED JOINT MOTION FOR APPROVAL OF
SETTLEMENT AND FOR DISMISSAL WITH PREJUDICE (Doc. No. 20)
FILED: April 17, 2017

         I. BACKGROUND.

         On October 31, 2016, Plaintiffs MD M. Ahmed and Sajada Begum filed a complaint against Defendants Jamal Turk and HKM3 LLC. Doc. No. 1. In the complaint, Plaintiffs asserted that Defendants violated the overtime and minimum wage provisions of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201, et seq. Id. Plaintiffs contended that they were entitled to unpaid minimum wage and overtime compensation, as well as liquidated damages. Id.

         On March 29, 2017, the parties filed a motion informing the Court that they had settled the claims asserted in this case and requesting that the Court approve their settlement in accordance with Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350 (11th Cir. 1982). Doc. No. 18. I denied that motion without prejudice for two reasons. First, the agreement contemplated that it could be modified in writing by the parties, thus depriving the agreement of the requisite finality. Doc. 19, at 3. Second, the agreement included other non-cash concessions (such as a confidentiality agreement, a non-disparagement provision, a no-reemployment provision, and a clause prohibiting Plaintiffs from ever visiting or entering any HKM3 location at any time in the future), which potentially undermined its fairness. Id.

         On April 17, 2017, the parties filed a renewed motion for approval of an amended settlement agreement. Doc. No. 20. The parties stipulate to an order approving their settlement. Because Defendants will be paying the settlement amounts over the course of six months, they ask that the Court retain jurisdiction for period of six months to enforce the terms of the settlement agreement. Alternatively, if the Court declines to retain jurisdiction, they ask that the Court dismiss this case with prejudice. Id. at 9. The amended settlement agreement removed the provision permitting modification of the agreement in writing and removed the non-cash concessions. Doc. No. 20-1. The matter is now ripe for review.

         II. APPLICABLE LAW.

         In Lynn's Food, the U.S. Court of Appeals for the Eleventh Circuit explained that claims for compensation under the FLSA may only be settled or compromised when the Department of Labor supervises the payment of back wages or when the district court enters a stipulated judgment “after scrutinizing the settlement for fairness.” 679 F.2d at 1353. Under Lynn's Food, a court may only enter an order approving a settlement if it finds that the settlement is fair and reasonable, Dees v. Hydradry, Inc., 706 F.Supp.2d 1227, 1240 (M.D. Fla. 2010), and that the ensuing judgment is stipulated, Nall v. Mal Motels, Inc., 723 F.3d 1304, 1308 (11th Cir. 2013).

         When a settlement agreement includes an amount to be used to pay attorney's fees and costs, the “FLSA requires judicial review of the reasonableness of counsel's legal fees to assure both that counsel is compensated adequately and that no conflict of interest taints the amount the wronged employee recovers under a settlement agreement.” Silva v. Miller, 307 F. App'x 349, 351 (11th Cir. 2009) (per curiam).[1] If the Court finds that the payment to the attorney is not reasonable, it must consider whether a plaintiff's recovery might have been greater if the parties had reduced the attorney's fees to a reasonable amount. See Id. at 351-52; see also Bonetti v. Embarq Mgmt. Co., 715 F.Supp.2d 1222, 1228 (M.D. Fla. 2009) (finding that the Court must consider the reasonableness of ...


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