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Serbonich v. Pacifica Fort Myers, LLC

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

May 29, 2018

LORI SERBONICH, Plaintiff,
v.
PACIFICA FORT MYERS, LLC and EXTENDED CARE PORTFOLIO FLORIDA LLC, Defendants.

          REPORT AND RECOMMENDATION

          MAC R. MCCOY UNITED STATES MAGISTRATE JUDGE.

         Pending before the Court is the Joint Motion for Approval of Settlement (Doc. 39) and Settlement Agreement (Doc. 39-1) filed on May 24, 2018. Plaintiff and Defendants jointly request that the Court approve the parties' settlement of their Fair Labor Standards Act (“FLSA”) issues.

         I. Legal Standards

         To approve the settlement of an 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 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, under 29 U.S.C. § 216(c), provides for the Secretary of Labor to supervise payments of unpaid wages owed to employees. Id. at 1353. The second way, under 29 U.S.C. § 216(b), is by a lawsuit brought by employees against their employer to recover back wages. Id. When employees file suit, the proposed settlement must be presented to the District Court for its review and determination that the settlement is fair and reasonable. Id. At 1353-54.

         The Eleventh Circuit has found settlements to be permissible when the lawsuit is brought by employees under the FLSA for back wages because the lawsuit:

provides some assurance of an adversarial context. 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. at 1354.

         II. Discussion

         A. Settlement Sum

         In this case, Plaintiff alleges that Defendants failed to compensate her properly for overtime work. (Doc. 39 at 3). Defendants denied liability and disputed that Plaintiff worked in excess of 40 hours in a workweek and further disputed Plaintiff's estimations of damages. (Id.). The parties also disputed whether Defendants had actual or constructive knowledge of Plaintiff's alleged overtime hours worked outside of the facility and during meal periods. (Id.). Finally, the parties disputed whether liquidated damages were warranted. (Id.). Based on these contentions, the Undersigned finds that a bona fide dispute exists between the parties.

         Even though a bona fide dispute exists between the parties, the parties decided to settle this matter to avoid the uncertainties and expense of litigation. (Id.). Indeed, the parties state that “[t]his case would have been expensive to litigate given the disputed issues and amount of electronic discovery.” (Id.). The parties believe that their settlement is a fair and reasonable compromise of the disputed claim. (Id.).

         Plaintiff agreed to a settlement of $26, 000.00 to resolve her unpaid overtime wages claims. (Doc. 39 at 3; Doc. 39-1 at 1). This total includes damages for unpaid wages and liquidated damages. (Id.). The Undersigned has reviewed the Settlement Agreement (Doc. 39-1) and finds that the terms of the Settlement Agreement are reasonable as to the amount for unpaid overtime wages and liquidated damages.

         B. Attorneys' Fees

         The Joint Motion and Settlement Agreement both indicate that Defendants agree to pay a total of $32, 000.00 for attorneys' fees and costs. (Doc. 39 at 4; Doc. 39-1 at 1). As explained in Bonetti v. Embarq Management Company, 715 F.Supp.2d 1222, 1228 (M.D. Fla. 2009), “the best way to insure that no conflict [of interest between an attorney's economic interests and those of his client] has tainted the settlement is for the parties to reach agreement as to the plaintiff's recovery before the fees of the plaintiff's counsel are considered. If these matters are addressed independently and seriatim, ...


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