United States District Court, M.D. Florida, Fort Myers Division
REPORT AND RECOMMENDATION
MCCOY UNITED STATES MAGISTRATE JUDGE
before the Court are the parties' Amended Joint Motion to
Approve Settlement Agreement and to Dismiss With Prejudice
(Doc. 24) and the Settlement Agreement and Mutual General
Release of Claims (Doc. 24-1) filed on January 8, 2018.
Plaintiff Nicholas Novielli and Defendants Lake Effect
Investments, Inc. and Cassandra Kelley request that the Court
approve the parties' settlement of the Fair Labor
Standards Act (“FLSA”) claim. (Doc. 24 at 1). As
set forth herein, the Court recommends that the Amended Joint
Motion to Approve Settlement Agreement and to Dismiss With
Prejudice (Doc. 24) be granted.
approve the settlement of the 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 Fair Labor Standards Act
(“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 is under 29 U.S.C. § 216(c), providing for the
Secretary of Labor to supervise the payments of unpaid wages
owed to employees. Id. at 1353. The second is under
29 U.S.C. § 216(b) when an action is brought by
employees against their employer to recover back wages.
Id. When the employees file suit, the proposed
settlement must be presented to the district court for the
district court's review and determination that the
settlement is fair and reasonable. Id. at 1353-54.
Eleventh Circuit has found settlements to be permissible when
employees bring a lawsuit under the FLSA for back wages.
Id. at 1354. The Eleventh Circuit held:
[A 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 to promote the policy of encouraging settlement
Id. at 1354.
Court turns to the terms of the Settlement Agreement. The
Court first addresses the general terms of the Settlement
Agreement and then specifically addresses the general release
Terms of the Settlement
action, Plaintiff alleges that he worked as a bartender for
Defendants from approximately October 2014 through December
2016. (Doc. 1 at 3 ¶ 16). Plaintiff claims that in early
2015, he was employed as an hourly non-exempt bar manager.
(Id.). Plaintiff contends that his duties included
selling, serving, making food, expediting, cleaning, and
closing as well as certain maintenance and construction
projects. (Id. at ¶ 17). Plaintiff claims that
from the time he became bar manager through December 2016,
Defendants failed to compensate Plaintiff for all of the
overtime he worked in excess of forty (40) hours per week.
(Id. at 4 ¶ 21). Defendants maintain that
Plaintiff was paid in full for all hours worked. (Doc. 24 at
1 ¶ 2). Based on these contentions, the Undersigned
finds that a bona fide dispute exists between the
though a bona fide dispute exists between the
parties, they decided to settle this matter. (Doc. 24 at
1-2). Defendants agree to pay Plaintiff $10, 500.00 for back
wages, liquidated damages, and a general release. (Doc. 24-1
at 1-2). Specifically, Defendants agree to pay $5, 000.00 for
back wages, $5, 000.00 for liquidated damages, and $500.00
for a general release of all other claims. (Id. at
24-1 at 3-4). Upon review of the Settlement Agreement (Doc.
24-1), the Court determines that these terms of the
Settlement Agreement are reasonable.
also agree to pay $8, 000.00 in attorney's fees and
costs. (Doc. 24-1 at 4 ¶ 3).
amount of attorney's fees “was negotiated apart
from, and subsequent to, [the] agreement as to the amount of
settlement funds to be paid to the Plaintiff.” (Doc. 24
at 2 ¶ 4). As explained in Bonetti v. Embarq Mgmt.
Co., 715 F.Supp.2d 1222, 1228 (M.D. Fla. 2009),
“the best way to insure that no conflict [of interest
between an attorney's economic interests and those of his
client] has tainted the settlement is for the parties to
reach agreement as to the plaintiff's recovery before the
fees of the plaintiff's counsel are considered. If these
matters are addressed independently and seriatim, there is no
reason to assume that the lawyer's fee has influenced the
reasonableness of the plaintiff's settlement.” In
Bonetti, Judge Presnell concluded that:
[I]f the parties submit a proposed FLSA settlement that, (1)
constitutes a compromise of the plaintiff's claims; (2)
makes full and adequate disclosure of the terms of
settlement, including the factors and reasons considered in
reaching same and justifying the compromise of the
plaintiff's claims; and (3) represents that the
plaintiff's attorneys' fee was agreed upon separately
and without regard to the amount paid to the plaintiff, then,
unless the settlement does not appear reasonable on its face
or there is reason to believe that the plaintiff's
recovery was adversely affected by the amount of fees paid to
his attorney, the Court will approve the settlement without
separately considering the reasonableness of the fee to be
paid to plaintiff's counsel.
Id. In the instant case, a settlement was reached,
and the attorney's fees were agreed upon without
compromising the amount paid to Plaintiff. The Undersigned
finds that these ...