Camp et al v. City of Pelham

Filing 133

MEMORANDUM OPINION. Signed by Judge Madeline Hughes Haikala on 2/28/14. (ASL)

FILED
2014 Feb-28 PM 04:25
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
KENNETH CAMP, et al.,
Plaintiffs,
v.
THE CITY OF PELHAM,
Defendant.

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Case No.: 2:10-cv-01270-MHH

MEMORANDUM OPINION
This class action has two components: a Fair Labor Standards Act opt-in
class concerning overtime compensation and a Rule 23 class relating to vacation
and sick leave and compensation for holiday time. Fourteen firefighters and the
defendant, the City of Pelham, have agreed to settle the firefighters’ FLSA claims,
and the City and the firefighters have submitted the proposed settlement to the
Court for approval. (Docs. 118, 131-1, 131-2, 131-3). For the reasons stated
below, the Court approves the FLSA settlement because it is a fair and reasonable
compromise of a bona fide dispute.
I.

BACKGROUND
The FLSA plaintiffs contend that for many years, the City did not

compensate them properly for overtime. Rather than paying the firefighters time
and a half for every hour of overtime worked, the City opted, per 29 U.S.C.

§207(o)(2)(A)(ii), to provide compensatory time rather than compensatory pay.
(Doc. 1, ¶9). The firefighters allege that the City improperly restricted their use of
the comp time that the City supplied.

For example, the City purportedly

“scheduled its firefighters in such a manner that they have accumulated more
compensatory time than the City can realistically and in good faith expect to grant
within a reasonable period in violation of 29 C.F.R. §553.25(b).” (Doc. 1, ¶ 13).
The City denies these allegations. (Doc. 5, p. 3).
With the assistance of Chief Magistrate Judge John Ott, the FLSA plaintiffs
and the City negotiated a settlement of the firefighters’ FLSA claims. (Doc. 118, ¶
3). The City has agreed to pay the 14 FLSA plaintiffs $55,000 in damages. (Doc.
118, ¶ 3). The City also has agreed to pay $115,000 for legal fees and expenses.1
(Doc. 118, ¶ 3). The parties negotiated attorneys’ fees separately from overtime
compensation. (Doc. 118, ¶ 6).
The named plaintiffs and the City represent that the settlement will
compensate the FLSA plaintiffs fully in that they will receive one-hundred percent
(100%) of the wages owed under the FLSA. (Doc. 118, ¶ 7). The named plaintiffs
participated in settlement discussions, and they have consented to the terms of the
agreement. (Doc. 118, ¶ 8). The City denies the firefighters’ FLSA allegations,
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During a February 21, 2014 pretrial conference, counsel for the firefighters represented that this
amount represents 40% of the total amount of time that counsel have invested in the case.
Plaintiffs’ counsel also explained that fees account for $100,000 of the total amount, with
expenses comprising the remaining $15,000.
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but it has agreed to settle the FLSA claim to bring an end to the FLSA portion of
this class action. The Pelham City Council has approved the terms of the FLSA
settlement. (Doc. 118, ¶ 4).
On this record, the Court considers the parties’ motion to approve the
proposed settlement of the FLSA plaintiffs’ claims.
II.

DISCUSSION
“Congress enacted the FLSA in 1938 with the goal of ‘protect[ing] all

covered workers from substandard wages and oppressive working hours.’ Among
other requirements, the FLSA obligates employers to compensate employees for
hours in excess of 40 per week at a rate of 1 ½ times the employees’ regular
wages.” Christopher v. SmithKline Beecham Corp., 132 S. Ct. 2156, 2162 (2012)
(quoting Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S. 728, 739
(1981)); see also 29 U.S.C. §§ 202, 207(a). Congress designed the FLSA “to
ensure that each employee covered by the Act would receive ‘[a] fair day’s pay for
a fair day’s work’ and would be protected from ‘the evil of ‘overwork’ as well as
‘underpay.’” Barrentine, 450 U.S. at 739 (emphasis in original). In doing so,
Congress sought to protect, “the public’s independent interest in assuring that
employees’ wages are fair and thus do not endanger ‘the national health and wellbeing.’” Stalnaker v. Novar Corp., 293 F. Supp. 2d 1260, 1264 (M.D. Ala. 2003)
(quoting Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 706 (1945)).
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If an employee proves that his employer violated the FLSA, the employer
must remit to the employee all unpaid wages or compensation, liquidated damages
in an amount equal to the unpaid wages, a reasonable attorney’s fee, and costs. 29
U.S.C. § 216(b). “FLSA provisions are mandatory; the ‘provisions are not subject
to negotiation or bargaining between employer and employee.’” Silva v. Miller,
307 Fed. Appx. 349, 351 (11th Cir. 2009) (quoting Lynn’s Food Stores, Inc. v. U.S.
ex. Rel. U.S. Dep’t of Labor, 679 F.2d 1350, 1352 (11th Cir. 1982)); see also
Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 707 (1945). “Any amount due that is
not in dispute must be paid unequivocally; employers may not extract valuable
concessions in return for payment that is indisputedly owed under the FLSA.”
Hogan v. Allstate Beverage Co., Inc., 821 F. Supp. 2d 1274, 1282 (M.D. Ala.
2011).
Consequently, parties may settle an FLSA claim for unpaid wages only if
there is a bona fide dispute relating to a material issue concerning the claim. To
compromise a claim for unpaid wages, the parties must “present to the district
court a proposed settlement, [and] the district court may enter a stipulated
judgment after scrutinizing the settlement for fairness.” Lynn’s Food Stores, Inc.
v. U.S. ex. Rel. U.S. Dep’t of Labor, 679 F.2d 1350, 1353 (11th Cir. 1982). 2 “[T]he

2

In Lynn’s Food, the Eleventh Circuit Court of Appeals explained, “[t]here are only two ways in
which back wage claims arising under the FLSA can be settled or compromised by employees.
First, under section 216(c), the Secretary of Labor is authorized to supervise payment to
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parties requesting review of an FLSA compromise must provide enough
information for the court to examine the bona fides of the dispute.” Dees v.
Hydradry, Inc., 706 F. Supp. 2d 1227, 1241 (M.D. Fla. 2010). “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,” then a
court may approve a settlement. Lynn’s Food, 679 F.2d at 1354; see also Silva,
307 Fed. Appx. at 351 (proposed settlement must be fair and reasonable).
Based on the Court’s review of the proposed settlement agreement and the
information that the parties submitted regarding the nature of their dispute and the
terms of the proffered settlement, the Court finds that there is a bona fide dispute in
this matter that supports the proposed settlement.

The settlement proceeds

employees of unpaid wages owed to them. An employee who accepts such a payment
supervised by the Secretary thereby waives his right to bring suit for both the unpaid wages and
for liquidated damages, provided the employer pays in full the back wages. The only other route
for compromise of FLSA claims is provided in the context of suits brought directly by
employees against their employer under section 216(b) to recover back wages for FLSA
violations. When employees bring a private action for back wages under the FLSA, and present
to the district court a proposed settlement, the district court may enter a stipulated judgment after
scrutinizing the settlement for fairness.” 679 F.2d at 1352-53 (footnotes omitted). The Eleventh
Circuit recently reiterated the import of Lynn’s Food. See Nall v. Mal–Motels, Inc., 723 F.3d
1304 (11th Cir. 2013).

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represent a fair and reasonable compromise based on the existing evidence
regarding unpaid overtime compensation.
III.

CONCLUSION
For the reasons stated above, the Court approves the proposed FLSA

settlement. The Court concludes that there is a bona fide dispute regarding the
plaintiffs’ FLSA claims, and the terms that the parties have negotiated constitute a
fair and reasonable resolution of that dispute. The Court will enter a separate order
dismissing the fourteen firefighters’ FLSA claims with prejudice.

The FLSA

settlement does not affect the firefighters’ claims regarding breach of the Pelham
Civil Service Law.
DONE and ORDERED this 28th day of February, 2014.

_________________________________
MADELINE HUGHES HAIKALA
UNITED STATES DISTRICT JUDGE

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