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Mills v. Keys Claims Consultants, LLC

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

November 27, 2019

VIVIAN ORTIZ MILLS, Plaintiff,
v.
KEYS CLAIMS CONSULTANTS, LLC., a Florida Limited Liability Company, f/k/a KEYS CLAIMS CONSULTANTS, INC. and GEORGE W. KEYS, Individually, Defendants.

          REPORT AND RECOMMENDATION

          MAC R. MCCOY UNITED STATES MAGISTRATE JUDGE.

         Pending before the Court is the parties' Joint Motion to Approve Settlement Agreement and to Dismiss with Prejudice on November 18, 2019. (Doc. 10). Plaintiff Vivian Ortiz Mills (Plaintiff) and Defendants Key Claims Consultants, LLC., f/k/a/ Key Claims Consultants Inc. and George W. Keys (Defendants), jointly request that the Court approve the parties' settlement of the Fair Labor Standards Act (“FLSA”) wage claims asserted in this case. After a careful review of the parties' submissions and the court file, the Undersigned recommends approval of the proposed settlement.

         LEGAL STANDARD

         To approve the settlement of a 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 Fair Labor Standards Act (“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 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 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 the lawsuit is brought by employees under the FLSA for back wages. Id. at 1354. The Eleventh Circuit has held that:

[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.

         CLAIM AND DEFENSES

         In the Complaint, filed October 8, 2019, Plaintiff Ortiz alleges that Defendants misclassified Plaintiff as an independent contractor throughout her employment as an insurance attendant from at least December 2017, though March 2019. (Doc. 1 at 4). Plaintiff alleges during her employment with Defendants, Plaintiff was required to perform work for which she was not compensated. (Id.). Specifically, Plaintiff alleges during her employment she was paid $20.00 per hour, with no premium for the overtime hour Plaintiff worked in excess of forty hours. (Id. at 5). Plaintiff alleges Defendants failure to properly compensate her was willful and showed reckless disregard for the provisions of the FLSA. (Id. at 6). Therefore, Plaintiff requests this Court to award compensation for hours worked over 40-hours in a workweek, liquidated damages and an award of reasonable attorneys' fees and costs pursuant to 29 U.S.C. §216(b). Defendants did not file a timely response, but on November 18, 2019, the parties filed a Joint Motion for Settlement whereas Defendants denied wrongdoing and vigorously dispute whether Plaintiff was improperly classified as an independent contractor. (Doc. 10 at 1).

         ANALYSIS OF THE PROPOSED SETTLEMENT

         Judicial Approval

         There is a threshold question as to whether judicial approval of the proposed settlement is actually required. In the proposed settlement agreement, the parties recite:

WHEREAS, Plaintiff calculated the maximum amount of overtime she could be owed, and Defendants agreed to pay this amount, plus an equal amount in liquidated damages, in addition to Plaintiff's reasonable attorneys' fees and costs.

(Doc. 10-1 at 1). This recital suggests that Plaintiff's FLSA claim was not compromised and, therefore, no Court approval is required. However, the ...


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