Groce v. Honda Manufacturing of Alabama, LLC

Filing 16

MEMORANDUM OPINION. Signed by Judge Virginia Emerson Hopkins on 3/10/2014. (Attachments: # 1 Exhibit A, # 2 Exhibit B)(JLC)

FILED
2014 Mar-10 PM 03:23
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
EASTERN DIVISION
CEDRIC BURROUGHS
Plaintiff,
v.
HONDA MANUFACTURING OF
ALABAMA, LLC,
Defendant.

)
)
)
)
)
)
)
)
)
)
)
)

CIVIL ACTION NO.
1:08-CV-1239-VEH
(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 384 related cases assigned to the undersigned district judge (see
Attachment “A” hereto), as well as in 202 other cases involving and related to the
action in Thsia Briggins v. Elwood TRI, Inc, and Honda Manufacturing of Alabama,
LLC, Case Number 1:08-cv-1801-KOB, assigned to a different district judge.1
Preliminary 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
The Final Order Approving Settlement and Dismissing Action is entered only in this case and
the 384 related cases assigned to the undersigned. It does not purport of resolve the other 202
cases assigned Chief Judge Bowdre.
1

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. 378, 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 written objections to
the proposed settlement have been received by the court.
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 agreement (see Attachment “B” hereto), which requires 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

2

reasonable in the circumstances of these cases, and he recommended approval of the
fee award.
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 the
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

3

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., Inc., 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., Inc., 821 F. Supp.
2d 1274, 1284 (M.D. Ala. 2011).

o uphold such provisions, there must be

“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

4

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, taking 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 agree, 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

5

defendants to seek fees and expenses for any motion to enforce the settlement with
respect to 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.2 The parties may proceed
with execution of the settlement agreement, and the court will dismiss with prejudice
all actions listed in Attachment “A.”
DATED this 10th day of March, 2014.

VIRGINIA EMERSON HOPKINS
United States District Judge

To be clear, all portions of Paragraph 10 remain 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.

2

6