United States District Court, M.D. Florida, Fort Myers Division
REPORT AND RECOMMENDATION 
MCCOY UNITED STATES MAGISTRATE JUDGE
parties filed a Joint Motion for Approval of Settlement
Agreement on August 14, 2019. (Doc. 22). Plaintiffs,
Sarah Kean and Jennie Nelson, and Defendants, Petro Gate,
Inc. and Behnam Bagheri, jointly request that the Court
approve the terms of their proposed settlement of the Fair
Labor Standards Act (“FLSA”) claims asserted in
this case. The proposed Settlement Agreement is fully
executed and attached as Exhibit A to the parties'
motion. (Doc. 22-1). After a careful review of the
parties' submissions and the court file, the Undersigned
respectfully recommends that the presiding United States
District Judge DENY the parties' motion
and reject the proposed settlement without prejudice.
approve the settlement of FLSA claims, 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
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. Id. 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. Id. When the employees file
suit, the proposed settlement must be presented to the
district court to determine whether the settlement is fair
and reasonable. Id. at 1353-54.
Eleventh Circuit has found settlements to be permissible when
employees bring a lawsuit under the FLSA for back wages.
Id. at 1354. The Eleventh Circuit held:
[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.
Undersigned evaluates this case and the parties' proposed
settlement against this backdrop.
motion sub judice, the parties succinctly explain
that this case involves a bona fide dispute under the FLSA
The Plaintiffs alleged that they were paid through a payroll
company for all work performed up to forty (40) hours per
week, and they were provided a separate check compensating
them at a straight time rate for all hours over forty (40) in
certain work weeks. Petro Gate disputes that the additional
compensation paid to Plaintiffs was pay for hours worked at a
straight time rate and has evidence that Plaintiffs may not
have worked all hours for which they are claiming overtime
pay. Additionally, Ms. Kean alleges that she worked
additional hours in her final week of work for which she was
never paid, an allegation that Petro Gate disputes.
(Doc. 22 at 2). The parties' explanation of the
Plaintiffs' claims is consistent with the allegations in
the Complaint. (See Doc. 1). The parties
settled this matter before the Defendant filed an Answer,
before the Court entered the standard FLSA Scheduling Order,
and before Plaintiffs were required to respond to court
interrogatories concerning the bases for their claims.
(See Docs. 18, 19). Nevertheless, for the
reasons advanced in the parties' motion, it is clear that
the parties have a bona fide dispute in this case for which
they reached a relatively early resolution and settlement.
The question is, therefore, whether the specific terms of the
proposed settlement are fair and reasonable. In that regard,
the Undersigned addresses the monetary terms and the
attorney's fees separately below.
OF THE PROPOSED SETTLEMENT