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Siebert v. Novak Environmental Services, LLC

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

July 8, 2019

BILL SIEBERT, Plaintiff,


          Mac R. McCoy United States District Judge.

         Plaintiff, Bill Siebert, and Defendant, Novak Environmental Services, LLC, filed a Joint Motion to Approve Settlement and Dismiss with Prejudice. (Doc. 22). The parties attached a fully executed Settlement Agreement as Exhibit A to the motion. (Doc. 22-1). For the reasons below, the Undersigned respectfully recommends that the presiding United States District Judge GRANT IN PART and DENY IN PART the relief requested.


         To approve the settlement of claims under the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. § 201 et seq. (“FLSA”), the Court must determine whether the settlement is a “fair and reasonable resolution of a bona fide dispute” of the claims raised under the FLSA. Lynn's Food Stores, 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 is under 29 U.S.C. § 216(c), providing for the Secretary of Labor to supervise the payments of unpaid wages owed to employees. Lynn's Food, 679 F.2d at 1353. The second is under 29 U.S.C. § 216(b) when an action is brought by employees against their employer to recover back wages. Lynn's Food, 679 F.2d at 1353. When the employees file suit, the proposed settlement must be presented to the district court for the district court's review and determination that the settlement is fair and reasonable. Id. at 1353-54.

         The Eleventh Circuit has found settlements to be permissible when employees sue under the FLSA for back wages. Id. at 1354. According to the Eleventh Circuit:

[A 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.


         Plaintiff alleged in the Complaint that Defendant violated the FLSA by failing to pay him unpaid overtime compensation. (Doc. 22 at 1; Doc. 1 at 3-5 ¶¶ 14-26). “Although Plaintiff was compensated for some overtime, he alleges that additional overtime hours worked were not included in his compensation.” (Doc. 22 at 2). Plaintiff asserted no other claims in the Complaint. (See Doc. 1). Defendant filed an Answer denying the allegations and asserting at least 29 affirmative defenses. (See Doc. 13). “Defendant contends that Plaintiff was compensated for all overtime during his employment and that any hours Plaintiff claimed were either not compensable or not properly reported.” (Doc. 22 at 3). Defendant also filed Counterclaims against Plaintiff for alleged breach of a restrictive covenant agreement, tortious interference with Defendant's business relationships, and breach of a duty of loyalty owed to Defendant. (Doc. 22 at 1; Doc. 13 at 9-18). Plaintiff filed an Answer to the Counterclaims, denying liability and asserting at least 6 affirmative defenses. (Doc. 17).


         In the motion sub judice, the parties explain that “[f]ollowing negotiations between counsel, the parties reached a settlement of all claims between them, including the FLSA claim.” (Doc. 22 at 1-2). The parties “jointly represent that there are bona fide disputes between them as to both liability and damages regarding Plaintiff's FLSA claim.” (Id. at 2). All parties and their counsel “agree and stipulate that the settlement represents a fair, reasonable, good faith and arms-length compromise.” (Id.). The specific terms of the settlement are contained in a written Settlement Agreement, which is fully executed and attached to the parties' motion as Exhibit A. (Id.; see also Doc. 22-1).

         Below, the Undersigned examines aspects of the Settlement Agreement (Doc. 22-1), the separately executed Non-Solicitation Agreement attached as Exhibit A to the Settlement Agreement (Doc. 22-1 at Ex. A thereto), and the parties' representations in the instant motion concerning both.

         A. Monetary Terms

         The Settlement Agreement provides that Defendant will pay Plaintiff $4, 500 for unpaid overtime wages and $4, 500 in liquidated damages. (Doc. 22 at 3; Doc. 22-1 at 2 ¶ 6). The parties' motion explains that “[a]lthough this is less than the amount claimed by Plaintiff in his FLSA interrogatories, it represents a significant percentage of the hours claimed, and the amount of hours represents a fair and reasonable compromise.” (Doc. 22 at 3; see also Doc. 18 at 2-3, Answers to Court Interrogatories 4 and 6 (attesting that Plaintiff was paid $18.00 per hour and claims approximately 358 hours of unpaid overtime between February 17, 2017 and June 19, 2018)). The Settlement Agreement further provides that Defendant will pay $6, 000 in Plaintiff's attorney's fees and costs. (Doc. 22 at 4). In all, Defendant has agreed to pay a total of $15, 000 ($4, 500 in unpaid wages $4, 500 in liquidated damages $6, 000 in attorney's fees and costs = $15, 000) to resolve this litigation. (Doc. 22-1 at 2-3 ¶ 6).

         The Undersigned finds that the monetary terms are a fair and reasonable resolution of the disputes in this case given, as the parties point out, that the $4, 500 in unpaid wages being paid to Plaintiff “represents a significant percentage” of the hours Plaintiff claimed in response to the Court's interrogatories. (Doc. 22 at 3; see also Doc. 18 at 2-3, Answers to Court Interrogatories 4 and 6). The liquidated damages being paid are equal to the amount of unpaid wages being paid. (Doc. 22 at 3; Doc. 22-1 at 3 ¶ 6(a)-(b)). Under to 29 U.S.C. § 216(b), “[a]ny employer who violated the provisions of . . . 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.” (Emphasis added). A court may - in its discretion - reduce or deny liquidated damages if the employer shows to the satisfaction of the court that the act or omission of failing to pay appropriate wages was in good faith and that the employer had a good faith belief that the act or omission was not in violation of the FLSA. Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233, 1282 (11th Cir. 2008). Here, however, liquidated damages are to be paid consistent with § 216(b).

         As it relates to the monetary terms of settlement, the Undersigned accepts and places great weight on the parties' recitals in the Settlement Agreement as reflecting a qualitative assessment by the parties and their counsel of the relative strengths and weaknesses of the FLSA-related claim and defenses asserted in the litigation, as well as the Counterclaims. Specifically, the Settlement Agreement states “[t]here are bona fide disputes between the Parties as to the Civil Action and Counterclaim, including but not limited to bona fide disputes as to the number of hours worked by the Plaintiff, the calculation of any potential overtime wages alleged owed to the Plaintiff, whether Plaintiff signed the restrictive covenant agreement in the Counterclaim and whether the Plaintiff has breached any duty to the Defendant.” (Doc. 22-1 at 1, ¶ G). It also states the parties desire to settle the case “[i]n order to avoid the further costs, burdens and risks of litigation.” (Id. at ¶ H).

         In light of these considerations, the monetary terms of the proposed settlement appear to be a fair and reasonable resolution of the case.

         B. ...

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