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Ortiz v. Mastercraftfc, LLC

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

June 26, 2019

MASTERCRAFTFC, LLC, etc., et al., Defendants.



         THIS CAUSE is before the Court on the parties' Joint Motion Requesting Order Approving Settlement Agreement and to Dismiss Lawsuit With Prejudice (“Motion”) (Doc. 11) and their Joint Supplemental Memorandum in support thereof (Doc. 13). The Motion was referred to the undersigned for a report and recommendation regarding an appropriate resolution. (Doc. 10.) For the reasons set forth herein, the undersigned respectfully RECOMMENDS that the Motion be GRANTED, the Settlement Agreements and FLSA Releases (“Agreements”) (Doc. 11 at 6-20) be APPROVED, and this action be DISMISSED with prejudice.

         I. Background

         Plaintiffs filed the instant action seeking unpaid overtime wages pursuant to the Fair Labor Standards Act, 29 U.S.C. §§ 201, et seq. (“FLSA”) (Doc. 3). According to the Complaint, Plaintiffs were employed by Defendants as non-exempt workers who performed manual labor and flooring installation during the relevant time period. (Id. at 1.) However, Defendants missclassified Plaintiffs as independent contractors. (Id. at 3.) Plaintiffs regularly worked in excess of forty hours per week, and Defendants failed to pay them one and one-half times their regular rates of pay for the overtime hours worked, in violation of the FLSA. (Id. at 3, 5.) Plaintiffs sought compensation for all unpaid overtime compensation, liquidated damages, attorneys' fees and costs, and pre-judgment interest. (Id. at 5.) The parties now request that the Court approve their settlement of Plaintiffs' claims. (Doc. 11.)

         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 Neighborhood, Inc., No. 6:06-cv-435-Orl-22JGG, 2007 WL 737575, at *4 (M.D. Fla. Mar. 7, 2007).

         III. Analysis

         The Agreements provide that Defendants will pay the following sums to Plaintiffs and their counsel: $5, 000 to Robert Ortiz ($2, 500 for unpaid wages and $2, 500 for liquidated damages); $2, 000 to Dauvonique Tisby ($1, 000 for unpaid wages and $1, 000 for liquidated damages); and $2, 000 to Plaintiffs' counsel for attorneys' fees and costs ($1, 000 for Robert Ortiz's claim and $1, 000 for Dauvonique Tisby's claim). (Doc. 11 at 8, 16; Doc. 13 at 5-6.) The parties represent that Plaintiffs' ...

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