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Jernigan v. 1st Stop Recovery, Inc.

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

April 2, 2018

DOROTHY JERNIGAN, on behalf of herself and others similarly situated, Plaintiff,
v.
1ST STOP RECOVERY, INC and JUDITH MARRA-PTASHINSKI, Defendants.

          REPORT AND RECOMMENDATION

          MAC R. MCCOY UNITED STATES MAGISTRATE JUDGE

         Pending before the Court are the parties' Joint Motion to Approve Settlement Agreement and Joint Stipulation for Dismissal With Prejudice (Doc. 41), filed on March 26, 2018, and the Settlement Agreement and Release of FLSA Claims (Doc. 43-1), filed on March 28, 2018. Plaintiff Dorothy Jernigan and Defendants 1st Stop Recovery, Inc. and Judith Marra-Ptashinski request that the Court approve the parties' settlement of the Fair Labor Standards Act (“FLSA”) claim. (Doc. 21 at 1). As set forth herein, the Court cannot recommend that the Joint Motion to Approve Settlement Agreement and Joint Stipulation for Dismissal With Prejudice (Doc. 43-1) be granted and the proposed Settlement Agreement be approved as they currently stand.

         To 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.

         In this case, the Court finds the general terms of the Settlement Agreement to be reasonable. However, the Court finds the terms of the “General Release of All Compensation-Related Claims” provision preclude approval of the Settlement Agreement at this time. (Doc. 43-1 at 2 ¶ 2).[1] The Settlement Agreement contains the following language as to the General Release of All Compensation-Related Claims:

Plaintiff knowingly and voluntarily releases and forever discharges Defendants and their respective heirs, executors, administrators, successors, assigns, parent corporations, affiliates, subsidiaries, divisions, predecessors, insurers, co-employers, and their current and former employees, attorneys, officers, owners, directors, both individually and in their business capacities, and their employee benefit plans and programs and their administrators and fiduciaries, as well as Joseph Ptashinski (collectively referred to throughout the remainder of this Agreement as “Releasees”), of and from any and all claims, known and unknown, asserted or unasserted, which Plaintiff had, has, or may have against Releasees as of the date of execution of this Agreement in connection with her alleged entitlement to any compensation through her employment with 1st Stop including, but not limited to, any alleged violation of:
The Fair Labor Standards Act (“FLSA”);
• Breach of Contract;
• The Equal Pay Act;
• Florida Wage Discrimination Law - Fla. Stat. § 448.07;
• Florida Equal Pay Law - Fla. Stat. § 725.07 and Fla. Stat. Ann. § 448.07;
• Florida Wage Payment Laws;
• any other federal, state or local law, rule, regulation, or ordinance regarding employment compensation;
• any public policy, contract, tort, or common law regarding employment compensation;
• any compensatory damages, including emotional distress damages, and all other damages related to her ...

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