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Leleux v. The Covelli Family Limited Partnership

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

October 18, 2017

KELLY LELEUX, Plaintiff,
v.
THE COVELLI FAMILY LIMITED PARTNERSHIP, COVELLI FAMILY LIMITED PARTNERSHIP II and COVELLI FAMILY LIMITED PARTNERSHIP III, Defendants.

          REPORT AND RECOMMENDATION

          THOMAS B. SMITH, United States Magistrate Judge

         Pending before the Court is a Joint Motion for Settlement Approval and Dismissal with Prejudice (Doc 30).Upon review, I respectfully recommend that the motion be DENIED and the settlement agreement be REJECTED, with an opportunity to amend.

         I. Background

         Plaintiff worked as a Catering Coordinator for Defendants, doing business as Panera Bread, from late 2006 until early 2017. As a Catering Coordinator, she was eligible for overtime pay. On April 26, 2017, Plaintiff filed this action, alleging that Defendants violated the overtime provisions of the Fair Labor Standards Act, 29 U.S.C. §216(b) (“FLSA”) in that they did not include delivery fees, tips, and bonuses in her “regular rate” of pay (Doc. 1, ¶¶ 35-36), and Plaintiff was not compensated for alleged time she spent engaged in after-hours communications with customers and managers (Id., ¶¶ 37-41).

         Defendants filed an answer disputing Plaintiff's claims and allegations (Doc. 15). They maintain that their relevant pay policies and practices, including with respect to their application to Plaintiff, comply with the FLSA (Id.).

         The parties exchanged relevant documents and information pursuant to the Court's FLSA Scheduling Order (Doc. 16). Following review, they continued to investigate the claims and defenses and attended a settlement conference. Although an impasse was reached at that conference, the Parties arrived at a settlement at formal mediation (Doc. 28). This motion followed

         II. Discussion

         The Standard of Review

         “The principal congressional purpose in enacting the Fair Labor Standards Act of 1938 was to protect all covered workers from substandard wages and oppressive working hours, ‘labor conditions [that are] detrimental to the maintenance of the minimum standard of living necessary for health, efficiency and general well-being of workers.'” Barrentine v. Ark.-Best Freight Sys., Inc., 450 U.S. 728, 739 (1981) (alteration in original) (quoting 29 U.S.C. § 202(a)). “Any employer who violates the provisions of section 206 or section 207 of [the FLSA] shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, and in an additional equal amount as liquidated damages.” 29 U.S.C. § 216(b). Section 206 establishes the federally-mandated minimum hourly wage, and § 207 prescribes overtime compensation of “one and one-half times the regular rate” for each hour worked in excess of forty hours during a given workweek. The provisions of the FLSA are mandatory and “cannot be abridged by contract or otherwise waived.” Barrentine, 450 U.S. at 740. To permit otherwise would “‘nullify the purposes' of the [FLSA] and thwart the legislative policies it was designed to effectuate.” Id. (quoting Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697, 707 (1946)).

         The parties seek judicial review and a determination that their settlement of Plaintiff's FLSA claims is a “fair and reasonable resolution of a bona fide dispute” over FLSA issues. See Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350, 1354-55 (11th Cir. 1982). If a settlement is not one supervised by the Department of Labor, the only other route for compromise of FLSA claims is provided in the context of suits brought directly by employees against their employers under § 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.” Id. at 1353 (citing Schulte, Inc. v. Gangi, 328 U.S. 108 (1946)).

         The Eleventh Circuit has held that “[s]ettlements may be permissible in the context of a suit brought by employees under the FLSA for back wages because initiation of the action by the employees provides some assurance of an adversarial context.” Id. at 1354. In adversarial cases:

The employees are likely to be represented by an attorney who can protect their rights under the statute. Thus, when the parties submit a settlement to the court for approval, the settlement is more likely to reflect a reasonable compromise of disputed issues than a mere waiver of statutory rights brought about by an employer's overreaching. If a settlement in an employee FLSA suit does reflect a reasonable compromise over issues, such as FLSA coverage or computation of back wages that are actually in dispute; we allow the district court to approve the settlement in order to promote the policy of encouraging settlement of litigation.

Id.

         In determining whether a settlement is fair and reasonable, the Court considers the following factors: “(1) the existence of fraud or 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 plaintiffs' success on the merits; (5) the range of possible recovery; and (6) the opinions of counsel.” Hamilton v. Frito-Lay, Inc., No. 6:05-cv-592-Orl-22JGG, 2007 WL 328792, at *2 (M.D. Fla. Jan. 8, 2007). There ...


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