Glaster v. ELCO Landmark Residential Management LLC

Filing 74

MEMORANDUM OPINION - the Court approves the parties proposed settlement of the plaintiffs FLSA claims. The Court concludes that there is a bona fide dispute regarding the plaintiffs FLSA claims, and the terms that the parties have negotiated constitu te a fair and reasonable resolution of that dispute. The Court will enter a separate order dismissing with prejudice the FLSA and state law claims that plaintiffs Glaster, Oden, and Rodriguez assert against ELCO. Signed by Judge Madeline Hughes Haikala on 4/6/2015. (KEK)

FILED
2015 Apr-06 PM 04:07
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
JEREMIHA GLASTER, et al.,
Plaintiffs,
v.
ELCO Landmark Residential
Management, LLC,
Defendant.

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Civil Action No.:
2:14-cv-00245–MHH

MEMORANDUM OPINION
In this FLSA action, the parties have informed the Court that the defendant
ELCO has reached settlement agreements with Jeremiha Glaster, Rodarryl Oden,
and Yahaira Rodriguez. (Doc. 71). The parties initially filed a joint motion to seal
the settlement agreements.

(Doc. 66).

The plaintiffs then filed a motion to

approve the settlements. (Doc. 69). The Court held a hearing on February 3, 2015
to take up the parties’ motions for approval of the settlements and the motion to
seal.

(Doc. 67).

At the hearing, the parties agreed to seek approval of the

settlement agreements not under seal, but with specific dollar-amounts and
personal information redacted from the published agreements.1 After reviewing
the settlement agreements, the Court GRANTS the motion to approve the FLSA

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A transcript of the hearing is available upon request.

settlements.
Discussion
A. The Fair Labor Standards Act
“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)).
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
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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
O’Neil, 324 U.S. at 707. “Any amount due that is not in dispute must be paid
unequivocally; employers may not extract valuable concessions in return for
payment that is indisputably 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, 679 F.2d at
1353; see also Hogan, 821 F. Supp. 2d at 1281–82.2 “[T]he parties requesting
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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
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 § 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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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). The information that the parties provide should also
enable the Court “to ensure that employees have received all uncontested wages
due and that they have received a fair deal regarding any additional amount that
remains in controversy.” Hogan, 821 F. Supp. 2d at 1282. “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).
B. The Settlement Agreements
The Court finds the settlement of the plaintiffs’ FLSA claims to be fair and
reasonable resolutions of bona fide disputes. The joint motion to approve the
settlements explains the issues that the parties dispute. (Doc. 71, ¶¶ 3–6). The
parties also discussed at the hearing their extensive disagreements about the
calculations of overtime hours and whether the statute of limitations might pose a
hurdle to recovery for some plaintiffs if the case were to continue. (Hrg. Tr., pp. 7,
11, 13). Because many bona fide disputes remain, the Court will approve the

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FLSA settlements if they are fair and reasonable. Lynn’s Food, 679 F.2d at 1354;
see also Silva, 307 Fed. Appx. at 351.
The FLSA settlement provisions and amounts are fair and reasonable for the
three plaintiffs involved in this lawsuit. Mr. Glaster alleges that ELCO owes him
$2,340.00 for overtime violations. (Doc. 71, ¶ 4). ELCO denies that it owes Mr.
Glaster anything and also asserts that the maximum possible recovery he could
achieve at trial is $1,926.00. (Doc. 71, ¶ 4). Mr. Oden alleges that ELCO owes
him $14, 355.00 in overtime compensation. (Doc. 71, ¶ 5). ELCO denies that it
owes Mr. Oden anything and also asserts that the maximum possible recovery Mr.
Oden could achieve at trial is $8,662.50. (Doc. 71, ¶ 5). Ms. Rodriguez alleges
that ELCO owes her $13,312.50 in overtime compensation. (Doc. 71, ¶ 6). ELCO
denies any liability and asserts that the most she could recover at trial is $4,500.00.
(Doc. 71, ¶ 6). Based on the Court’s consideration of the settlement amounts and
the parties’ bona fide disputes concerning the amount of overtime pay that ELCO
allegedly owes the plaintiffs, the Court finds that the settlement amounts are fair
and reasonable.
The settlement agreements in this case are atypical because they concern
both FLSA claims and state-law claims. In typical FLSA settlements, absent a
showing of good cause, the Court does not allow the parties to file sealed or
redacted settlement agreements because omitting the agreements from the public
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record can frustrate the goals of the FLSA. See, e.g., Stalnaker, 293 F. Supp. 2d at
1264 (quoting O’Neil, 324 U.S. at 706 (discussing the public interest behind the
FLSA)). In this case, the parties asked for permission to redact the settlement
amounts from the settlement agreements because the total settlement payments
resolve not only the plaintiffs’ FLSA claims but their state law claims too.
Because the Court is satisfied the settlement agreements are fair and reasonable
resolutions of bona fide disputes, the Court allowed the parties to file the
agreements with the dollar amounts and other personal information redacted.
The confidentiality provisions of the agreements, (Doc. 71-1, pp. 5, 11, 16–
17), and the claim-release provisions, (Doc. 71-1, pp. 3, 9, 15), also give the Court
pause. Ordinarily, the Court would not approve an FLSA settlement with broad
release language or a confidentiality requirement that includes a liquidateddamages provision. The Court makes an exception and approves those provisions
in this case because the settlements cover state-law claims in addition to FLSA
claims.
Conclusion
For the reasons stated above, the Court approves the parties’ proposed
settlement of the plaintiffs’ FLSA claims. 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
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Court will enter a separate order dismissing with prejudice the FLSA and state law
claims that plaintiffs Glaster, Oden, and Rodriguez assert against ELCO.
DONE and ORDERED this April 6, 2015.

_________________________________
MADELINE HUGHES HAIKALA
UNITED STATES DISTRICT JUDGE

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