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O'Connor v. Worthington PJ, Inc.

United States District Court, M.D. Florida, Fort Myers Division

December 13, 2017

RONALD O'CONNOR, individually, and on behalf of others similarly situated Plaintiff,
v.
WORTHINGTON PJ, INC., Defendant.

          REPORT AND RECOMMENDATION[1]

          MAC R. MCCOY UNITED STATES MAGISTRATE JUDGE

         Pending before the Court are the Joint Motion for Preliminary Approval of Settlement, Appointment of Class Representatives and Class Counsel, and Certification of Rule 23 Settlement Class (Doc. 36) filed on March 31, 2017 and Plaintiffs' Motion for an Award of Attorneys' Fees and Costs Pursuant to 29 U.S.C. § 216(b) (Doc. 42) filed on April 7, 2017. For the reasons explained herein, the Undersigned recommends that the Joint Motion for Preliminary Approval of Settlement, Appointment of Class Representatives and Class Counsel, and Certification of Rule 23 Settlement Class (Doc. 36) be GRANTED and that Plaintiffs' Motion for an Award of Attorneys' Fees and Costs Pursuant to 29 U.S.C. § 216(b) (Doc. 42) be DENIED WITHOUT PREJUDICE as premature.

         I. Background

         On August 4, 2016, Plaintiff Ronald O'Connor brought the current action for alleged minimum wage violations under the Fair Labor Standards Act ("FLSA") 29 U.S.C. § 201, et seq., the Florida Minimum Wage Act, Fla. Stat. § 448.110, and the Florida Constitution, Art. X, § 24, both as an FLSA collective action pursuant to 29 U.S.C. § 216(b) and as a class action pursuant to Fed.R.Civ.P. 23. (See generally Doc. 1). Subsequently, Plaintiff Ronald O'Connor and Opt-in Plaintiff Jordan Garrett filed consent forms to join this action. (Docs. 16, 20).

         Plaintiffs were pizza delivery drivers for Defendant Worthington PJ, Inc. (Doc. 36 at ll).[2] Defendant operates three Papa John's Pizza franchises in North Fort Myers, North Port, and Haines City, Florida. (Id.). The Complaint alleges that Defendant failed to provide reasonable reimbursement for vehicle expenses Plaintiffs incurred while they delivered pizzas for Defendant. (Id.). Based on the low reimbursement for deliveries, the Complaint alleges that "the Plaintiffs' (and the Class members') wages fell below the applicable Florida minimum wage as well as the federal minimum wage." (Id.). Plaintiffs also alleged that "Defendant paid them below the applicable minimum wage rates when they performed non-tip-generating tasks in Defendant's restaurant, like folding pizza boxes or cleaning." (Id.).

         On October 11, 2016, Defendant filed an answer to Plaintiffs' Complaint, denying all liability for the alleged minimum wage violations. (See Doc. 17). After this time, the parties met on December 21, 2016 for "a face-to-face meeting at Defense Counsel's Tampa, Florida office to discuss options to resolve the case." (Doc. 36 at 11). While an agreement was not reached at that time, the parties state that "the foundation for meaningful future settlement conversations was established." (Id.). The parties continued settlement discussions and eventually reached a mutually agreeable settlement. (Id.). The executed Settlement Agreement and Release is attached as an exhibit to the Joint Motion. (See Doc. 36-3).

         In pertinent part, for settlement purposes only, Defendant stipulated to the certification of a Rule 23 settlement class defined as "all current and former delivery drivers employed by Defendant in the State of Florida from August 4, 2012 through the date the Court enters an order of preliminary approval." (Id. at 11-12; see also Doc. 36-3 at 6). Additionally, in exchange for released claims, Defendant agreed to pay Plaintiffs and each class member $6.07 per week worked as a delivery driver. (Doc. 36 at 20; Doc. 36-3 at 6). Of note, however, while the Complaint asserted claims both as a collective action pursuant to 29 U.S.C. § 216(b) and as a class action pursuant to Fed.R.Civ.P. 23, the Settlement Agreement only contemplates a settlement of this case as a class action. (See Doc. 36-3). The Settlement Agreement (Doc. 36-3) and the parties' Joint Motion (Doc. 36) do not purport to settle any claims as a collective action under 29 U.S.C. § 216(b). Moreover, the parties did not reach an agreement regarding attorneys' fees payable to Plaintiffs' counsel. (See Doc. 36 at 12). Plaintiffs filed a separate motion directed at the issue of attorneys' fees. (See Doc. 42).

         The parties state that "[t]his was a hard fought case, " which "involved a number of disputed factual and legal issues" and which "required significant research and discussion." (Id.). The parties contend that they have "demonstrated civility, but zealously advocated their position on every disputed issue, from liability, to class membership and class certification, to the reasonableness of Defendant's reimbursement amounts, and to damages." (Id.). The parties further state that "[m]any allegations in Plaintiffs' Complaint remain in dispute. However, the Parties recognize the uncertainty, risk and expense of continued litigation; therefore, they have resigned to a fair and reasonable settlement in lieu of continued litigation." (Id.). As a result, the parties jointly request, pursuant to Fed.R.Civ.P. 23(e), the entry of an Order of Preliminary Approval approving their class Settlement Agreement. (Id. at 9). The parties' proposed order is attached as Exhibit 1 (Doc. 36-2) to the Joint Motion.

         II. Discussion

         To approve the settlement of an FLSA claim, the Court must determine whether the settlement is a "fair and reasonable resolution of a bona fide dispute" of the claims raised pursuant to the FLSA. Lynn's Food Store, Inc. v. United States, 679 F.2d 1350, 1355 (11th Cir. 1982); 29 U.S.C. § 216. There are two ways for a claim under the FLSA to be settled or compromised. Id. at 1352-53. The first, under 29 U.S.C. § 216(c), provides for the Secretary of Labor to supervise payments of unpaid wages owed to employees. Id. at 1353. The second way, under 29 U.S.C. § 216(b), is by a lawsuit brought by employees against their employer to recover back wages. Id. When employees file suit, the proposed settlement must be presented to the District Court for its review and determination that the settlement is fair and reasonable. Id. at 1353-54.

         The Eleventh Circuit has found settlements to be permissible when the lawsuit is brought by employees under the FLSA for back wages because the lawsuit:

provides some assurance of an adversarial context. 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. at 1354.

         At this stage, however, the parties are not seeking final approval of their FLSA Settlement Agreement. Instead, the parties request that the Court (1) preliminarily approve their settlement, (2) appoint class representatives, (3) appoint class counsel, and (4) certify a Rule 23 settlement class. (Doc. 36 at 1). The Undersigned addresses these requests, beginning with the request to preliminarily approve the settlement.

         A. Preliminary Approval of Settlement

         Fed. R. Civ. P. 23(e) provides the manner by which class actions may be settled. The Rule provides:

         The claims, issues, or defenses of a certified class may be settled, voluntarily dismissed, or compromised only with the court's approval. The following procedures apply to a proposed settlement, voluntary dismissal, or compromise:

(1) The court must direct notice in a reasonable manner to all class members who would be bound by the proposal.
(2) If the proposal would bind class members, the court may approve it only after a hearing and on finding that it is fair, reasonable, and adequate.
(3) The parties seeking approval must file a statement identifying any agreement made in connection with the proposal.
(4) If the class action was previously certified under Rule 23(b)(3), the court may refuse to approve a settlement unless it affords a new opportunity to request exclusion to individual class members who had an earlier opportunity to request exclusion but did not do so.
(5) Any class member may object to the proposal if it requires court approval under this subdivision (e); the objection maybe withdrawn ...

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