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Gill v. Steve Harper Painting, Inc.

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

June 18, 2017

DEAN GILL, Plaintiff,
v.
STEVE HARPER PAINTING, INC. and STEVE HARPER, Defendants.

          REPORT AND RECOMMENDATION

          GREGORY J. KELLY UNITED STATES MAGISTRATE JUDGE.

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

MOTION:JOINT MOTION TO APPROVE REVISED SETTLEMENT AGREEMENT AND TO DISMISS WITH PREJUDICE (Doc. No. 29)
FILED: April 17, 2017
THEREON it is RECOMMENDED that the motion be GRANTED in part and DENIED in part.

         I. FACTUAL BACKGROUND

         On July 25, 2016, Plaintiff filed a complaint against Defendants alleging unpaid overtime in violation of the Fair Labor Standards Act (the “FLSA”), 29 U.S.C. § 201 et seq. Doc. No. 1. On October 3, 2016, Plaintiff filed his answers to the Court's interrogatories. Doc. No. 19. In his answers, Plaintiff did not provide a precise calculation of alleged damages. Id. at 2. Instead, he states that he “will provide a more precise calculation upon receipt of Defendants' complete production of weekly payroll information …” Id. On November 16, 2016, Plaintiff filed a notice of settlement. Doc. No. 22. Thus, the parties settled their case before Plaintiff provided a precise calculation of his alleged damages.

         On December 29, 2016, the parties filed a joint motion to approve their FLSA settlement agreement and dismiss the case with prejudice (the “First Motion”). Doc. No. 25. On February 2, 2017, the undersigned denied the First Motion because separate consideration was not given for: 1) the broad general release; and 2) the confidentiality provision. Doc. No. 26 at 3-7. On April 17, 2017, the parties filed a joint motion (the “Renewed Motion”) to approve their revised FLSA settlement agreement (the “Agreement”) and dismiss the case with prejudice. Doc. No. 29. The matter has been referred to the undersigned for a report and recommendation. Doc. No. 12. For the reasons that follow, the undersigned recommends that the Agreement be approved with certain modifications and the case be dismissed with prejudice.

         II. APPLICABLE LAW

         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:

There 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. 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 ...

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