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Turner v. HJB Express Freight, Inc.

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

April 20, 2018

REGGIE TURNER, Plaintiff,
v.
HJB EXPRESS FREIGHT, INC. and HILDA JACQUELINE BROOKS, Defendants.

          REPORT AND RECOMMENDATION

          KARLA R. SPAULDING UNITED STATES MAGISTRATE JUDGE

         TO THE UNITED STATES DISTRICT COURT:

         This cause came on for consideration without oral argument on the following motion filed herein:

MOTION: SECOND AMENDED JOINT MOTION FOR APPROVAL OF SETTLEMENT (Doc. No. 33)
FILED: April 4, 2018

         I. BACKGROUND.

         On April 11, 2017, Plaintiff Reggie Turner filed a complaint against HJB Express Freight, Inc. and Hilda Jacqueline Brooks. Doc. No. 1. Turner alleges that he was employed as a delivery driver by HJB Express Freight, which was owned and managed by Brooks. Id. ¶¶ 6, 11, 16. Turner further alleges that he routinely worked an average of 50 to 60 hours per week, but he was not compensated for all the hours he worked over 40 hours and was not compensated at a rate of at least the minimum wage. Id. ¶ 26. He asserts three counts - one alleging that Defendants violated the overtime provisions of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201, et seq., one alleging that Defendants violated the minimum wage provisions of the FLSA, and one for recovery of unpaid wages under Section 448, Florida Statutes. Turner contends that he is entitled to unpaid wages, overtime compensation, compensatory damages for emotional pain and suffering, and attorney's fees and costs. In her answer to the Complaint, Defendant Brooks asserted a counter-claim arising from Turner's alleged failure to make a pick-up. Doc. No. 9.

         On January 26, 2018, the parties filed a notice that they had tentatively settled Turner's claims. Doc. No. 24. The parties were directed to file a motion for settlement approval under Lynn's Food Stores, Inc. v. United States, 679 F.2d 1360 (11th Cir. 1982). Doc. No. 26. I denied the parties' initial motion without prejudice after concluding that the proposed Settlement Agreement included a number of provisions that undermined the fairness of the agreement. Specifically, I noted that the Settlement Agreement: did not confine the release of claims to wage claims; included several non-cash provisions including a waiver of re-hiring/reinstatement, a non-disparagement and no-reentry onto property clause, and a covenant of confidentiality; and included a paragraph entitled “Other Judicial and Administrative Proceedings, ” that required Turner to withdraw or refrain from filing administrative charges, which was likely unenforceable. Doc. No. 28. The parties were directed to file a renewed motion for settlement approval. I subsequently denied the renewed motion because the Settlement Agreement attached to the renewed motion was substantially identical to the previous agreement that was found to be deficient. Doc. No. 32.

         The parties were permitted to file a second renewed motion for settlement approval. The parties filed that motion on April 4, 2018 and it is ripe for review.

         II. APPLICABLE LAW.

         In Lynn's Food, the U.S. Court of Appeals for the Eleventh Circuit explained that claims for compensation under the FLSA may only be settled or compromised when the Department of Labor supervises the payment of back wages or when the district court enters a stipulated judgment “after scrutinizing the settlement for fairness.” 679 F.2d at 1353. Under Lynn's Food, a court may only enter an order approving a settlement if it finds that the settlement is fair and reasonable, Dees v. Hydradry, Inc., 706 F.Supp.2d 1227, 1240 (M.D. Fla. 2010), and that the ensuing judgment is stipulated, Nall v. Mal Motels, Inc., 723 F.3d 1304, 1308 (11th Cir. 2013).

         When a settlement agreement includes an amount to be used to pay attorney's fees and costs, the “FLSA requires judicial review of the reasonableness of counsel's legal fees to assure both that counsel is compensated adequately and that no conflict of interest taints the amount the wronged employee recovers under a settlement agreement.” Silva v. Miller, 307 Fed.Appx. 349, 351 (11th Cir. 2009) (per curiam).[1] If the Court finds that the payment to the attorney is not reasonable, it must consider whether a plaintiff's recovery might have been greater if the parties had reduced the attorney's fees to a reasonable amount. See Id. at 351-52; see also Bonetti v. Embarq Mgmt. Co., 715 F.Supp.2d 1222, 1228 (M.D. Fla. 2009) (finding that the Court must consider the reasonableness of attorney's fees when a “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”).

         III. ANALYSIS.

         A. Whether Plaintiff Has Compromised His Claim.

         The Settlement and Release Agreement (“Settlement Agreement”), which is attached to the parties' motion, provides that in exchange for Turner voluntarily dismissing his claims with prejudice, Defendants will pay the total gross amount of $5, 000.00 - $1, 000.00 for Turner's claims for damages and unpaid wages and $4, 000.00 to pay the fees incurred by his attorneys. Doc. No. 33, at 11, ¶ 1. The agreement calls for Turner and his counsel, Chad A. Barr, Esq., both to receive checks in the amount of $1, 000.00 within fifteen days after Court approval of the Agreement and for Turner's counsel to subsequently receive three separate payments of $1, 000.00 within the following ninety days. Id. at 3, ¶ 1 A-D.

         In his answers to the Court's FLSA Interrogatories, Turner estimated that he was owed $1, 680.00 in unpaid overtime during the relevant time period and an equal amount in liquidated damages, for a total of $3, 360.00. Doc. No. 19, at 3. Because Turner will receive only $1, 000.00 under the Settlement Agreement, I recommend that the Court find that he has compromised his claim within the meaning of Lynn's Food.

         B. Whether the Amount Is Fair and Reasonable.

         Because Turner has compromised his FLSA claim, the Court must evaluate whether the settlement is reasonable. The parties state that there are disputed issues in this case, including whether Turner is entitled to overtime compensation and whether he is entitled to compensation for accrued and unused vacation pay. Doc. No. 33, at 4. They explain that they reached a compromise to avoid engaging in costly discovery, a potential trial, and the complexity, expense and length of future litigation. Id. at 5.

         The parties represent that they participated in settlement discussions and that both parties were represented by competent counsel in an arms-length negotiations. Id. “If the parties are represented by competent counsel in an adversary context, the settlement they reach will, almost by definition, be reasonable.” Bonetti, 715 F.Supp.2d at 1227. Under these circumstances, I recommend that ...


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