Smith v. TRI Staffing, Inc. et al
MEMORANDUM OPINION REGARDING ORDER APPROVING SETTLEMENT Signed by Chief Judge Karon O Bowdre on 3/11/14. (SAC, )
2014 Mar-11 AM 11:15
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
ELWOOD TRI, INC. and
HONDA MANUFACTURING OF
CIVIL ACTION NO.
(and Related Cases)
MEMORANDUM OPINION REGARDING
ORDER APPROVING SETTLEMENT
On February 7, 2014, the magistrate judge filed his report and recommendation concerning
the proposed approval of a compromise settlement reached by the parties in this and 201 related
cases assigned to the undersigned district judge1, as well as in 385 other cases involving and
related to the action in Cedric Burroughs v. Honda Manufacturing of Alabama, LLC, Case No.
1:08-cv-1239-VEH assigned to a different district judge.2 The court notes that the settlement
agreement is the product of not only cooperation among counsel and the parties, but also the
exhaustive mediation efforts of Magistrate Judge Putnam. The court commends Judge Putnam
and counsel for their good work.
See Attachment “A” to the Final Order filed contemporaneously with this memorandum
The Final Order Approving Settlement and Dismissing Action is entered only in this case and the
201 related cases assigned to the undersigned. It does not purport of resolve the other 385 cases
assigned Judge Hopkins.
Prior to the filing of his report and recommendation, the magistrate judge entered orders
requiring plaintiffs’ counsel to notify the individual plaintiffs of the terms and conditions of the
proposed settlement, including the procedures for objecting to the proposed settlement and the
back-pay recoveries each plaintiff should expect to receive under the settlement. Notification
was mailed to each plaintiff by counsel on or soon after November 12, 2013 (see doc. 253, p. 5),
expressly advising each plaintiff of the right to appear personally and object to the proposed
settlement at a fairness hearing scheduled on December 10, 2013. On December 10, 2013, the
magistrate judge convened the fairness hearing pursuant to Lynn’s Food Stores, Inc. v. United
States, 679 F.2d 1350 (11th Cir. 1982), but no plaintiffs or persons purporting to speak for any of
them appeared at the hearing. No one submitted written objections to the proposed settlement to
Following the December 10 fairness hearing, the magistrate judge filed his report and
recommendation on February 7, 2014, recommending generally that the proposed settlement be
approved by the court, with the exception of two provisions. The magistrate judge
recommended that the court reject approval of Paragraph 9 of the proposed settlement
agreement3, which would require that the agreement and its terms remain confidential. The
magistrate judge also recommended that the court reject approval of a portion of Paragraph 10,
which would impose on any late-objecting plaintiff the fees and costs incurred by defendants in
filing any motion to enforce the settlement agreement against such a plaintiff. The magistrate
judge also found that the fees to be awarded plaintiffs’ counsel are reasonable in the
circumstances of these cases, and he recommended approval of the fee award.
See Attachment “B” to the Final Order filed contemporaneously with this memorandum
To date, no party has filed an objection to the report and recommendation. The court has
carefully reviewed and considered de novo the report and recommendation, as well as the
materials submitted by the parties in support of the proposed settlement, and the court finds that
the report is due to be and hereby is ADOPTED and the recommendations in it ACCEPTED.
The court agrees that the proposed settlement is a fair and adequate compromise of the genuinely
contested claims of overtime pay by the plaintiffs. For the reasons explained by the magistrate
judge, the claims of overtime were genuinely disputed both as to entitlement to any overtime
compensation and the amounts that might be owed. The parties reached a fair and adequate
compromise to resolve disputes over whether any overtime pay was due each plaintiff, whether it
is possible to accurately quantify any overtime each plaintiff may claim, and, by extension,
whether plaintiffs are entitled to any liquidated damages. The court agrees that the negotiated
fees and expenses of plaintiffs’ counsel are fair and reasonable and do not reduce the amount
each plaintiff is entitled to receive under the settlement.
The court also agrees with the magistrate judge that Paragraph 9 and a part of Paragraph 10
of the proposed settlement agreement should be rejected. The court agrees with the observation
made by Judge Thompson that “[a]bsent some compelling reason, the sealing from public
scrutiny of FLSA agreements between employees and employers would thwart the public’s
independent interest in assuring that employees’ wages are fair and thus do not endanger ‘the
national health and well-being.’” Hogan v. Allstate Beverage Co., 821 F. Supp. 2d 1274, 1283
(M.D. Ala. 2011) quoting Brooklyn Savings Bank v. O'Neil, 324 U.S. 697, 708, 65 S. Ct. 895, 89
L. Ed. 1296 (1945). Confidentiality provisions may not be extracted as a part of the price of
compromise, “for they prevent the employee from alerting other workers to potential FLSA
violations on pain of personal liability” and by enabling the employer to “‘retaliate against an
employee for exercising FLSA rights’ by advising other employees of FLSA violations.” Hogan
v. Allstate Beverage Co., 821 F. Supp. 2d 1274, 1284 (M.D. Ala. 2011). To uphold such
provisions, the proponents must show “compelling reasons,” Crabtree v. Volkert, Inc., 2013 WL
593500, *4 (S.D. Ala. Feb. 14, 2013), which simply have not been shown to exist in these cases.
Likewise, that part of Paragraph 10 that allows the defendants to seek their fees and
expenses incurred in connection with any motion to enforce the settlement against any plaintiff
that balks at fulfilling it unduly undermines the voluntariness of the compromise achieved and
extracts a price for recognition of the plaintiffs’ FLSA rights, particularly as to those plaintiffs
who can establish that they were unaware of the proposed settlement. As to plaintiffs who are
unaware of the proposed settlement or otherwise were prevented from expressing opposition,
imposing fees and costs on them to oppose the settlement later when they learn of it violates
their due process rights. Thus, the court will reject that part of Paragraph 10 allowing defendants
to seek fees and expenses for enforcement motions as to those plaintiffs who can establish they
were unaware of the settlement or otherwise prevented from stating their objections to it until
after this date.
Further, the court expressly finds that the proposed attorneys’ fees and expenses due to
plaintiffs’ counsel under the proposed settlement agreement, as set out in the magistrate judge’s
report and recommendation, are fair and reasonable. In doing so, the court takes into account the
“lodestar” method of calculating fees and the factors enumerated in Johnson v. Georgia Highway
Express, Inc., 488 F.2d 714 (5th Cir. 1974). The fees and expenses determined by the magistrate
judge in the report and recommendation are hereby ADOPTED as the court’s own fee/expense
award. In the separate Final Order Approving Settlement, the court will award to plaintiffs’
counsel the fees, costs, and expenses consistent with the settlement agreement, as set out in the
magistrate judge’s report and recommendation.
By separate Final Order Approving Settlement and Dismissing Action, the court will
approve the proposed settlement agreement, except with respect to Paragraph 9 and that portion
of Paragraph 10 that would allow defendants to seek fees and expenses for any motion to enforce
the settlement from any plaintiff able to show that he did not know about or have a reasonable
opportunity to object to the settlement prior to this date.4 The parties may proceed with
execution of the settlement agreement, and the court will dismiss with prejudice all actions listed
in Attachment “A” to the Final Order filed contemporaneously with this memorandum opinion.
DONE and ORDERED this the 11th day of March, 2014.
KARON OWEN BOWDRE
CHIEF UNITED STATES DISTRICT JUDGE
To be clear, that potion of Paragraph 10 remains valid and effective as to those plaintiffs who
learned or knew of the proposed settlement and had a reasonable opportunity to object to it prior
to the date of this approval of the settlement.
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