Todd v. Daewon America, Inc.
OPINION. Signed by Honorable Judge Myron H. Thompson on 3/24/2016. (wcl, )
IN THE DISTRICT COURT OF THE UNITED STATES FOR THE
MIDDLE DISTRICT OF ALABAMA, EASTERN DIVISION
DAEWON AMERICA, INC.,
CIVIL ACTION NO.
Jurisdiction is proper pursuant to 29 U.S.C. § 216(b)
(FLSA) and 28 U.S.C. § 1331 (federal question).
before the court is Todd’s motion for approval of the
parties’ settlement agreement.
For the reasons below,
the motion will be granted, with the exception noted
Todd filed his complaint against Daewon on behalf
asserting that the company docked their pay for meal
rounding the amount of their paychecks.
He sought back
Daewon denied that it had violated FLSA and that class
certification was appropriate.
After the court conditionally certified a plaintiff
settlement agreement states: "the Settlement Amount of
this Agreement is a lump sum payment by Defendant to
Plaintiffs' law firm, Arendall Law Firm, Inc., d/b/a
Plaintiffs and their attorneys will decide the amounts
to be distributed to each Plaintiff and the amount of
attorneys' fees, costs and expenses.”
Id. at 6.
Todd moved the court to set a fairness hearing to
Todd’s attorney explained how the $ 120,000 lump-sum
settlement would be divided:
$ 29,771.91 would go to
award back pay for each member of the plaintiff class
for the two and half of the three years they originally
had sought; Todd would receive $ 4,981.81 in “incentive
pay,” to compensate primarily for the time he invested
$ 81,246.29 in attorneys’ fees; and $ 4,000.00 would go
Transcript (doc. no. 136) at 3-4.
According to Todd’s
attorney, the $ 29,771.91 back-pay amount is equivalent
to approximately 45 % of the maximum amount that the
light of the uncertainty of recovery at trial and the
difficulty of proving that Daewon willfully violated
FLSA; proof of a willful violation would be required
both to obtain damages for a full three years instead
of two, 29 U.S.C. § 255 (establishing two-year statute
claims accrued more than two years before the complaint
As for attorneys’ fees, Todd’s attorney represented
that he would receive $ 81,246.29 of the settlement as
payment in full of attorneys’ fees, and that this would
constitute a 53 % discount of the fees actually due;
would limit the charge to $ 4,000.00.
wages for the meal-break claims were calculated based
upon their testimony as to the number of meal breaks
they missed, while their rounding claims were based on
an analysis of time and pay records.
satisfied with the agreement and that the other class
members had authorized him to accept the settlement on
The court asked the parties to address whether the
settlement’s release provisions would preclude Todd or
other opt-in plaintiffs from bringing non-FLSA-related
claims against Daewon.
Both parties represented that
applied solely to claims arising out of FLSA.
When an employee brings a private action under the
FLSA and presents a proposed settlement agreement to
the district court, “the district court may enter a
stipulated judgment after scrutinizing the settlement
district court may approve the settlement of a FLSA
suit if the agreement reflects “a reasonable compromise
over issues, such as FLSA coverage or computation of
back wages, that are actually in dispute....”
Having reviewed the agreement, heard the evidence
and argument of the parties at the fairness hearing,
and reviewed the record in the case, the court finds
that the parties have reached a settlement based on a
dispute over wages owed under the FLSA.
settlement, the plaintiffs would not recover liquidated
years plus half of the extra year of back wages they
would receive if they were able to prove willfulness at
This is a reasonable compromise given the risk
of not winning at trial and the likely difficulty of
proving the willful violation of FLSA required for the
third year’s recovery and for eight opt-in plaintiffs
to receive any recovery at all.
Furthermore, the court
finds, with one exception, that the agreement reflects
a fair and reasonable resolution of the dispute between
As explained in the opinion denying Daewon’s motion
to file the settlement under seal and in other prior
opinions of this court, this court will not approve a
provision, as such a provision unfairly subjects Todd
and the opt-in plaintiffs to the specter of contempt.
See Todd v. Daewon America, Inc., 2014 WL 2608454 (M.D.
Ala. June 11, 2014); Hogan v. Allstate Beverage Co.,
Inc., 821 F. Supp. 2d 1274, 1283-4 (M.D. Ala. 2011)
(Thompson, J.) (finding that confidentiality provisions
goals); see also Dees v. Hydradry, Inc., 706 F. Supp.
Elizabeth Wilkins, Silent Workers, Disappearing Rights:
Confidential Settlements and the Fair Labor Standards
Act, 34 Berkeley J. Emp. & Lab. L. 109, 113 (2013)
Accordingly, this court will only grant approval of the
settlement on the condition that the confidentiality
agreement is stricken, so that Todd and other opt-in
including the amount of the settlement.
Further, the court’s conclusion that the settlement
is fair is premised on the finding, based on parties’
settlement agreement does not preclude Todd or other
opt-in plaintiffs from bringing non-FLSA-related claims
Finally, the court’s approval is contingent on the
requirement that Todd’s counsel provide the members of
the plaintiff class with the tax documentation required
for them to correctly report their recoveries on their
* * *
With the understanding that the proposed settlement
understandings discussed above, the court will approve
it, and an appropriate judgment will be entered to that
DONE, this the 24th day of March, 2016.
/s/ Myron H. Thompson
UNITED STATES DISTRICT JUDGE
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