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Erling v. American Grille With Sushi LLC

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

June 18, 2018

TODD ERLING, on behalf of himself and others similarly situated, Plaintiff,
v.
AMERICAN GRILLE WITH SUSHI LLC and CHRIS K. WHITAKER, Defendants.

          REPORT AND RECOMMENDATION

          MAC R. MCCOY UNITED STATES MAGISTRATE JUDGE.

         Pending before the Court is the Joint Motion to Approve Settlement and Request for the Court to Retain Jurisdiction for an Award of Attorney's Fees and Costs (Doc. 47) and Settlement Agreement (Doc. 47-2), both of which were filed on June 4, 2018. Plaintiff and Defendants jointly request that the Court approve the parties' settlement of their Fair Labor Standards Act (“FLSA”) issues. (Doc. 47 at 3).

         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.

         Below, the Undersigned applies these standards to evaluate the proposed settlement in this case.

         II. Discussion

         A. Settlement Sum

         Here, Plaintiff alleges that Defendants failed to compensate him properly. (Doc. 28 at 5-8). Defendants deny liability. (Doc. 36). Although the parties did little to describe their disagreement in their Joint Motion, the Undersigned finds that a bona fide dispute indeed exists between the parties because this case has been the subject of extensive litigation.

         Even though a bona fide dispute exists between the parties, the parties decided to settle this matter. (Doc. 47 at 1-3). Specifically, “Defendants agreed to pay and Plaintiff agreed to accept $2, 000.00 to resolve this wage and hour claim and the Parties agreed for the Court to retain jurisdiction for an award of attorney's fees and costs.” (Id. at 1). The parties believe that their settlement is a fair and reasonable compromise of the disputed claim. (Id. at 2).

         The Undersigned has reviewed the Settlement Agreement (Doc. 47-2). Although the parties provided little justification in their Joint Motion that the amount is reasonable, the Court nevertheless finds that the terms of the Settlement Agreement are reasonable as to the amount for unpaid overtime wages, unpaid minimum wages, and liquidated damages.

         In coming to this conclusion, the Undersigned notes that Plaintiff, in his separate Motion for an Award of Attorney's Fees and Costs, states that he originally sought $700.00 in connection with his FLSA claims. (Doc. 43 at 1). The settlement amount is almost three times greater than what Plaintiff initially sought. (Doc. 47 at 1). Under the FLSA, any employer found to have violated the wage provisions of FLSA is liable for not only unpaid wages but also liquidated damages in an additional amount equal to the amount of unpaid wages. 29 U.S.C. § 216(b). Here, because the settlement amount is almost three times greater than what Plaintiff initially sought, the settlement sum should ...


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