United States District Court, M.D. Florida, Orlando Division
REPORT AND RECOMMENDATION
THOMAS
B. SMITH United States Magistrate Judge.
Pending
before the Court in this Fair Labor Standards Act
(“FLSA”), 29 U.S.C. § 201 et seq.
case is the parties' Amended Joint Motion for Approval of
Settlement Agreement (Doc. 28).
I.
Background
From an
unknown start date in August 2016 through an unknown end date
in September 2016, Defendant Lowman's Enterprises Group,
Inc., employed Plaintiff Shermon Dorn as a lawn crew member
(Doc. 21, ¶¶ 1, 4, 7). Plaintiff alleges that
Defendants Jimmie Lowman and Esperanza Lowman were also his
employers (Doc. 1, ¶¶ 13-14). Plaintiff's
duties included mowing, edging, trimming shrubbery and
pulling weeds for which he was paid $75 per day
(Id., ¶¶ 4-5). Plaintiff alleges that he
worked 66 to 72 hours per week and is owed unpaid wages and
overtime (Id., ¶ 7). His complaint includes
counts for violation of the FLSA and Fla. Stat. § 448.01
(Doc. 1). Defendants deny liability and affirmatively allege
that they are exempt from or otherwise not subject to the
FLSA (Doc. 14 at 8).
The
parties filed a joint motion for approval of settlement
agreement on January 29, 2018 (Doc. 26), which was referred
to me for a report and recommendation. On February 1, 2018, I
issued a report and recommendation to deny the motion for
several reasons (Doc. 27). My concerns were that: the
confidentiality provision in the parties' agreement
contravened the policies underlying the FLSA, the general
release was too broad and named unnamed parties who have no
apparent connection to this case, it restrained Plaintiff
from making future claims against Defendant that are
unrelated to his complaint, and it incorrectly assumed that
this Court would retain jurisdiction to enforce the agreement
(Doc. 27). I recommended that the Court give the parties
fourteen days to submit an amended agreement for the
Court's consideration (Doc. 27 at 8). On February 19,
2018, the parties filed their out-of-time motion for approval
of their revised settlement agreement (Doc. 28). The district
judge entered an Endorsed Order denying the original motion,
finding my report and recommendation moot, and accepting the
amended motion (Doc. 29). The parties' amended settlement
agreement is an improvement, but still fails to cure all of
the defects outlined in my previous report and
recommendation. Consequently, I respectfully recommend that
the motion be denied.
II.
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) (alternation 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 claim 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)).
In the
Eleventh Circuit “[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 these 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 is a “'strong presumption' in
favor of finding a settlement fair.” Id.
(citing Cotton v. Hinton, 559 F.2d 1331 (5th Cir.
1977)).
III.
Discussion
I see
no badges of fraud in the making of the parties' amended
settlement agreement. Defendants have agreed to pay Plaintiff
$375 in wages and an additional $375 as liquidated damages
(Doc. 28-1, ¶ 1). Under the circumstances presented,
this appears to be fair and reasonable. Defendants have also
agreed to pay $1, 500 to Plaintiff's attorney
(Id.). The parties agree that this payment was
negotiated separately from the payments to be made to
Plaintiff, and that $1, 500 represents a significant
compromise of counsel's fees and costs (Doc. 28, n. 2).
The amount of fees to be paid is, in my view, fair and
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