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Smith v. Paramount Alf, Inc.

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

May 25, 2018

PARAMOUNT ALF, INC., etc., Defendant.



THIS CAUSE is before the Court on the parties' First Amended Joint Motion to Approve FLSA Settlement Agreement (“Motion”) (Doc. 19). The Motion was referred to the undersigned for a report and recommendation regarding an appropriate resolution. (Doc. 16.) The undersigned heard oral argument on the Motion on May 16, 2018. For the reasons set forth herein, the undersigned respectfully RECOMMENDS that the Motion be GRANTED, the Settlement Agreement (“Agreement”) (Doc. 19-1) be APPROVED, and this action be DISMISSED with prejudice.

         I. Background

         Plaintiff filed the instant action pursuant to the Fair Labor Standards Act, 29 U.S.C. §§ 201, et seq. (“FLSA”), bringing claims for unpaid overtime compensation and retaliation. (Doc. 1.) Plaintiff alleged that she was employed by Defendant as a caregiver and medical technician, and that she worked in excess of forty hours per week at various times during her employment. (Id. at 3-4.) Plaintiff further alleged that Defendant failed to pay her one and one-half times her regular rate of pay for the overtime hours she worked, in violation of the FLSA. (Id.) Plaintiff also alleged that she was unlawfully terminated in retaliation for objecting to Defendant's failure to pay her overtime wages. (Id. at 5.) Plaintiff sought compensation for all unpaid overtime hours worked, liquidated damages, compensation for lost wages and benefits, compensatory damages, including for emotional distress, prejudgment interest, and attorney's fees and costs. (Id. at 4-5.)

         The parties initially requested that the Court approve a settlement agreement providing that Plaintiff would receive $5, 000 for unpaid wages and any other damages, and that Plaintiff's counsel would receive $5, 000 for attorney's fees and costs. (Docs. 17 & 17-1.) Although not entirely clear, it appeared that the initial agreement, which included a general release and a confidentiality provision, encompassed both of Plaintiff's claims. (Id.) The initial motion was denied without prejudice for several reasons, and the parties were instructed to, among other things, remove “any references to confidentiality, non-disparagement, or non- solicitation . . . from the parties' revised settlement agreement.” (Doc. 18 at 3.)

         The parties then filed the instant Motion, which seeks approval of the settlement of only Plaintiff's wage claim. (Doc. 19.) The instant Agreement, which no longer contains the objectionable provisions, is substantially different from the first agreement. (Doc. 19-1.) Most notably, the Agreement provides that Plaintiff will now receive $3, 000 for unpaid wages, $1, 000 for liquidated damages, and that Plaintiff's counsel will receive $1, 000 for attorney's fees and costs. (Id.) However, aside from indicating that Plaintiff's retaliation claim was settled pursuant to a separate confidential agreement, the parties failed to address why there were substantial differences between the first agreement and the instant Agreement. Therefore, the undersigned held oral argument on the Motion so that the parties could address this issue.

         II. Standard

         Section 216(b) of the FLSA provides in part:

Any employer who violates the provisions of section 206 or section 207 of this title shall be liable to the employee or employees affected in the amount of . . . their unpaid overtime compensation . . . and in an additional equal amount as liquidated damages. . . . The court in such action shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney's fee to be paid by the defendant, and costs of the action.

29 U.S.C. § 216(b).

         “[I]n the context of suits brought directly by employees against their employer under section 216(b) . . . the district court may enter a stipulated judgment after scrutinizing the settlement for fairness.” Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350, 1353 (11th Cir. 1982). Judicial review is required because the FLSA was meant to protect employees from substandard wages and oppressive working hours, and to prohibit the contracting away of these rights. Id. at 1352. “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, ” the district court is allowed “to approve the settlement in order to promote the policy of encouraging settlement of litigation.” Id. at 1354. In short, the settlement must represent “a fair and reasonable resolution of a bona fide dispute over FLSA provisions.” Id. at 1355. In addition, 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).[2]

         In Bonetti v. Embarq Management Co., the court analyzed its role in determining the fairness of a proposed settlement under the FLSA, and concluded:

[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.

715 F.Supp.2d 1222, 1228 (M.D. Fla. 2009). Other cases from this district have indicated that when attorneys' fees are negotiated separately from the payment to a plaintiff, “an in depth analysis [of the reasonableness of the fees] is not necessary unless the unreasonableness is apparent from the face of the documents.” King v. My Online ...

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