Hempstead v. Chad's A/C Direct et al

Filing 21

OPINION. Signed by Honorable Judge Myron H. Thompson on 1/19/17. (djy, )

IN THE DISTRICT COURT OF THE UNITED STATES FOR THE
MIDDLE DISTRICT OF ALABAMA, NORTHERN DIVISION
MARTIN HEMPSTEAD,
Plaintiff,
v.
AIR SOUTH HEATING &
COOLING, INC., an Alabama
corporation, d/b/a Chad’s
A/C Direct, and
CHAD WISWALL,
Defendants.

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CIVIL ACTION NO.
2:16cv719-MHT
(WO)

OPINION
This cause is before the court on the joint motion
to

approve

a

settlement

between

plaintiff

Martin

Hempstead and defendants Air South Heating & Cooling,
Inc.

and

Chad

Wiswall.

The

court

held

two

on-the-record conference calls on the motion on January
18, 2017.

For the reasons that follow, the settlement

will be approved.
Hempstead alleged that defendants violated the Fair
Labor

Standards

Act

(FLSA),

29

U.S.C.

§§ 201-219.

Hempstead’s

FLSA

claim

sought

damages

for

unpaid

overtime compensation.
Because the FLSA was enacted to protect workers
from the poor wages and long hours that can result from
great

inequalities

employers

and

in

employees,

bargaining

power

the

provisions

FLSA’s

between
are

mandatory and, except in two narrow circumstances, are
generally

not

subject

to

bargaining,

modification by contract or settlement.

waiver,

or

Brooklyn Sav.

Bank v. O’Neil, 324 U.S. 697, 706 (1945).

The first

exception is that the Secretary of Labor may supervise
the payment of back wages to employees; employees who
accept such payments waive their rights to bring suits
for liquidated damages, provided the employer pays the
back amount in full.

29 U.S.C. § 216(c); Lynn’s Food

Stores, Inc. v. United States, 679 F.2d 1350, 1352–53
(11th Cir. 1982); see also Stalnaker v. Novar Corp.,
293 F. Supp. 2d 1260, 1262 (M.D. Ala. 2003) (Thompson,
J.).

2

The second route to settlement, and the one that is
applicable

here,

occurs

when

an

employee

brings

a

private action for back wages under 29 U.S.C. § 216(b),
the employee and employer present a proposed settlement
to the district court, and the district court reviews
the judgment and enters it as “a stipulated judgment.”
Lynn’s Food Stores, 679 F.2d at 1354-1355 (“Settlements
may be permissible in the context of a suit brought by
employees

under

the

FLSA

for

back

wages

because

initiation of the action by the employees 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.
submit

a

settlement

settlement
is

more

to

the

likely

Thus, when the parties

court
to

for

reflect

approval,
a

the

reasonable

compromise of disputed issues than a mere waiver of
statutory

rights

brought

about

by

an

employer’s

overreaching.”).
In reviewing a settlement of an FLSA private claim,
a

court

must

“scrutiniz[e]

3

the

settlement

for

fairness,”

id.

at

1353,

and

determine

that

the

settlement is a “fair and reasonable resolution of a
bona fide dispute over FLSA provisions.”

Id. at 1355.

“If a settlement in an employee FLSA suit does reflect
a

reasonable

coverage
actually

compromise
computation

or
in

over
of

dispute[,]

...

issues,
back

the

such

wages,

district

as

FLSA

that

court

are
[may]

approve the settlement in order to promote the policy
of encouraging settlement of litigation.”

Id. at 1354.

In this case, there is a bona fide dispute over
FLSA

provisions,

employed

“for

a

namely

whether

workweek

longer

Hempstead,
than

forty

while
hours,”

received “compensation for his employment in excess of
the hours above specified at a rate not less than one
and one-half times the regular rate at which he is
employed.”
After
settlement

29 U.S.C. §§ 207(a)(1).
speaking

with

agreement,

Hempstead
the

court

and

reviewing

finds

that

the
the

settlement is a fair and reasonable resolution of this
bona

fide

dispute

and

that

4

Hempstead

knowingly

and

voluntarily
will

entered

receive

represents

into

the

$ 2,530.00

his

full

settlement.

from

the

overtime

Hempstead

defendants,

pay

and

which

liquidated

damages, and which he believes reflects complete and
total satisfaction of what he could expect to receive
if he were to prevail on his FLSA claim at trial.

In

addition, Hempstead’s counsel, the Arendall Law Firm,
Inc., will receive $ 2,910.00 in attorneys’ fees and
$ 410.00

for

reimbursement

of

the

filing

fee

and

service of the complaint, for a total of $ 3,320.00.
Upon

consideration

of

the

representations

of

the

parties, the terms of the settlement agreement, and the
court’s

knowledge

of

the

facts

and

circumstances

this case, the court will approve the settlement.
An appropriate judgment will be entered.
DONE, this the 19th day of January, 2017.
/s/ Myron H. Thompson
UNITED STATES DISTRICT JUDGE

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