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King v. Gold Coast USA, Inc.

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

March 20, 2018

STANFORD KING, Plaintiff,
v.
GOLD COAST USA, INC., GERALD HIERBERT and RAY WARREN, 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 SETTLEMENT AND

         DISMISS THE ACTION WITH PREJUDICE (Doc. No. 25)

         FILED: March 8, 2018 THEREON it is RECOMMENDED that the motion be GRANTED IN PART and DENIED IN PART.

         I. FACTUAL BACKGROUND

         On August 18, 2017, Plaintiff filed a complaint against Defendants alleging: 1) unpaid overtime under the Fair Labor Standards Act (the “FLSA”), 29 U.S.C. § 201 et seq.; and 2) unpaid wages under Florida common law.[1] Doc. No. 1 at 6-10. On November 1, 2017, Plaintiff filed his answers to the Court's interrogatories claiming $7, 425.00 in unpaid overtime and $1, 100.00 in unpaid wages. Doc. No. 18 at 4-5. On February 27, 2018, Plaintiff filed a notice of settlement. Doc. No. 24. On March 8, 2018, the parties filed a joint motion (the “Motion”) requesting that the Court approve their settlement agreement (the “Agreement”), dismiss the case with prejudice, and retain jurisdiction to enforce the terms of the Agreement. Doc. No. 25 at 8. The parties attach a copy of the Agreement in support. Doc. No. 25-1. For the reasons that follow, it is recommended that the Agreement be approved, the case be dismissed with prejudice, and the Court decline to retain jurisdiction to enforce the Agreement.

         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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