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Brown v. Lee Memorial Health System Foundation, Inc.

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

December 1, 2019

WAYNE O. BROWN, and other similarly situated individuals, Plaintiff,
v.
LEE MEMORIAL HEALTH SYSTEM FOUNDATION, INC., Defendant.

          REPORT AND RECOMMENDATION

          MAC R. MCCOY UNITED STATES MAGISTRATE JUDGE

         The parties filed a Joint Motion for Entry of Order Approving Settlement and Dismissing Case with Prejudice on October 18, 2019. (Doc. 15). The parties' fully executed settlement agreement is attached to their motion as Exhibit A. (See Doc. 15-1). For the reasons below, the Undersigned respectfully recommends that the motion be GRANTED, subject to the Court severing and striking the future employment provision in paragraph 5 of the agreement (Doc. 15-1 at ECF pp. 3-4 ¶ 5). Alternatively, if the Court does not sever and strike the future employment provision, the Undersigned respectfully recommends that the motion be denied without prejudice for the reasons explained below.

         LEGAL STANDARD

         To approve the settlement of claims under the Fair Labor Standards Act (“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. 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 employees sue, 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.

         CLAIMS AND DEFENSES

         Plaintiff brought this action under the FLSA alleging unpaid overtime wages. (Doc. 15 at 1; see also Doc. 1). Specifically, “Plaintiff alleged that he was owed an average of 2.5 hours per week corresponding to lunch time he alleges he did not take but which was nevertheless automatically deducted from his pay - regardless of whether he took lunch or not.” (Doc. 15 at 4; see also Doc. 1 at ¶¶ 10-11). The Complaint alleges and the parties' motion explains that Plaintiff claims to be owed $7, 946.04 for unpaid overtime, calculated as set forth in detail in the Complaint and the motion. (See Doc. 15 at 4-5; see also Doc. 1 at ¶ 32).

         The parties reached a settlement before Defendant filed a response to the Complaint and before the Court could order Plaintiff to respond to the Court's standard interrogatories concerning the details of Plaintiff's damages claim. (See Docs. 13, 15). According to the parties' motion, however, “Defendant has denied any and all liability with regards [sic] to Plaintiff's claims, including the amount of alleged unpaid overtime wages in this action and asserts that Plaintiff was paid correctly at all times under the FLSA. Moreover, Defendant has denied any and all liability and asserts sovereign immunity in this matter.” (Doc. 15 at 1).

         Additionally, the parties' motion confirms that this action represents a bona fide dispute under the FLSA: “The Parties agree that the instant action involves disputed issues. Although Defendant disputes its liability for the allegedly owed overtime wage payments to Plaintiff, it has ultimately agreed to pay Plaintiff the amount described [in the Motion] as a fair and reasonable compromise in order to resolve the disputed claims.” (Id. at 3). In particular, “the parties agree that there are genuine disputes as to whether or not Plaintiff did in fact take lunch on a daily basis; and whether or not Plaintiff was in fact paid properly for all hours Plaintiff allegedly worked, including overtime.” (Id. at 6). Moreover, the parties dispute whether “Plaintiff's claims should be dismissed in this forum, since [sic] Defendant, as a governmental agency, is entitled to sovereign immunity. Consequently, Plaintiff could have been barred from any recovery whatsoever with regards [sic] to his claims for unpaid overtime wages in this forum had Defendant prevailed on its defense.” (Id.). In terms of scope, the parties' proposed settlement resolves all of Plaintiff's claims, including the claims for attorney's fees and costs. (Id. at 5).

         ANALYSIS

         The specific terms of the settlement are contained in a written Settlement Agreement and Release, which is fully executed and attached to the parties' motion as Exhibit A (Doc. 15-1). Below, the Undersigned examines aspects of the proposed settlement agreement (Doc. 15-1) and the parties' representations in the instant motion concerning the proposed settlement.

         A. ...


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