Smitherman v. Chow Lao Liew LLC

Filing 16

MEMORANDUM OPINION - The court finds Plaintiffs claims represent a bona fide dispute over FLSA provisions, namely FLSA coverage and the amount of his backpay, if any, and further finds the parties settlement is a fair and reasonable resolution of these bona fide disputes. Therefore, the parties Joint Motion for Approval of Settlement is GRANTED, and the settlement is APPROVED. A separate order will be entered. Signed by Magistrate Judge John H England, III on 3/14/2016. (KEK)

FILED
2016 Mar-14 PM 01:25
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
COREY SMITHERMAN,
Plaintiff,
v.
CHOW LAO LIEW, LLC d/b/a HOKKAIDO
JAPANESE STEAK AND SUSHI BAR,

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Case No.: 2:15-cv-01950-JHE

Defendant.
MEMORANDUM OPINION
This is a Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (“FLSA”), case in which
Plaintiff Corey Smitherman (“Smitherman” or “Plaintiff”) seeks payment from his employer
Defendant Chow Lao Liew, LLC d/b/a Hokkaido Japanese Steak and Sushi Bar (“Defendant”)
for unpaid wages pursuant to 29 U.S.C. §§206, 207, and 216(b). The parties jointly move for
approval of their settlement. (Doc. 15). For the reasons stated below, the parties’ motion, (doc.
15), is GRANTED, and the settlement is APPROVED.
I. Facts
A. Background
Plaintiff filed this FLSA action on October 30, 2015. (Doc. 1). The crux of Plaintiff’s
claim is that Defendant required him to participate in a mandatory tip-sharing scheme that
included non-tipped employees. He further claims he was required to spend a substantial amount
of time on non-tip producing activities.

According to Plaintiff, this resulted in Defendant

misapplying the tip credit and misappropriating his tip earnings. Defendant has denied all
allegations, on both a factual and legal basis. The parties dispute the existence and amount, if
any, of any uncompensated and/or undercompensated work.

The parties have represented that counsel has exchanged documents and personal data in
connection with the evaluation and negotiation of this settlement.

Plaintiff’s counsel has

performed an independent analysis of time and payroll records and compared those with
Plaintiff’s claims and allegations. After an independent analysis of the disputed facts and the
law, the parties negotiated and determined the settlement amounts to be paid to Plaintiff as set
forth below.
The parties have further represented that Defendant also provided Plaintiff’s counsel with
labor reports for Plaintiff’s entire tenure. These documents showed the following relevant
information: (1) date, (2) job, (3) time in, (4) time out, (5) regulate rate of pay, (6) regular hours.
Plaintiff’s counsel analyzed this data by having staff enter the data into an excel sheet to perform
independent calculations for backpay based on total server hours. Based on this independent
analysis, Plaintiff’s counsel calculated Plaintiff worked one thousand four hundred twenty four
(point) sixty five hours (1,424.65 hours) as a server. For those hours, Defendant paid Plaintiff
only $2.50 per hour as Defendants claimed $4.75 per hour. Accordingly, Plaintiff completed the
following calculation: 1,424.65 X $4.75 per hour = $6,767.09 in backpay.

Next, Plaintiff

calculated an equal amount of liquidated damages to arrive at a gross settlement amount of
thirteen thousand five hundred thirty four dollars and eighteen cents ($13,534.18).
Additionally, Defendant agrees to pay six thousand four hundred sixty-five dollars and
eighty two cents ($6,465.82) in attorneys’ fees and costs in light of the costs, work performed,
hours spent, likely awardable hourly rates, as well as in an effort to expedite payment to Plaintiff
and avoid costs and delay associated with continued litigation and a fee petition. This amount
did not compromise or reduce Plaintiff’s FLSA claim and was determined separate and apart
from Plaintiff’s settlement amount.

B. Terms of the Settlement
The terms of the parties’ settlement are as follows:
(a) The Defendant shall pay Plaintiff Corey Smitherman aggregate gross
settlement proceeds of $13,534.18 by paying to him one $6,767.09 payment,
denominated as wages, less the deduction of any taxes and any amounts required
by law to be withheld from that check, and a second payment of $6,767.09 as
liquidated damages from which there will be no amounts withheld.
(b) The Defendant shall pay Plaintiff’s counsel, for attorney’s fees and costs of
this action, the collective total amount of $6,465.82;
(c) Neither the payments herein nor the Order Approving Settlement shall
constitute or shall heretofore be represented as an admission, finding, conclusion
or judgment of an FLSA violation on behalf of the Defendant or liability to the
Plaintiff, or any other violation or liability whatsoever, including liability for
liquidated damages, as a primary motivation for the Defendant’s agreement to a
resolution of this matter was to avoid the uncertainty and additional expense of
continued litigation.
II. Analysis
If an employee proves 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)). “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. In Lynn=s Food Stores, Inc. v.
United States, 679 F.2d 1350, 1355 (11th Cir. 1982), the court stated Athere is only one context in

which compromises of FLSA back wage or liquidated damage claims may be allowed: a
stipulated judgment entered by a court which has determined that a settlement proposed by an
employer and employees, in a suit brought by the employees under the FLSA, is a fair and
reasonable resolution of a bona fide dispute over FLSA provisions.@ The primary focus of a
court=s inquiry in determining whether to approve an FLSA settlement is to ensure that an
employer does not take advantage of its employees in settling their claim for wages and other
damages due under the statute. Collins v. Sanderson Farms, Inc., 568 F. Supp. 714, 719 (E.D.
La. 2008).
Here, the parties have a legitimate dispute as to whether Defendant’s practices constituted
the misapplication of the tip credit or misappropriation of Plaintiff’s tip earnings.

The

Defendant’s settlement offer (as set out in the terms above) is an appropriate amount for the
disputed unpaid wages. The proposed settlement agreement also contained an agreed-upon
attorney=s fees and costs amount. AWhere the attorney=s fee was agreed upon separately, without
regard to the amount paid to the plaintiff, then >unless the settlement does not appear reasonable
on its face or there is reason to believe that the plaintiff=s recovery was adversely affected by the
amount of fees paid to his attorney, the Court will approve the settlement without separately
considering the reasonableness of the fee to be paid to plaintiff=s counsel.=@ Davis v. The Filta
Group, Inc., No. 6:10-cv-457-Orl-31KRS, 2010 WL 3958701, *2 (M.D. Fla. Sept. 20, 2010)
(quoting Bonetti v. Embarq Mgmt. Co., No. 6:07-cv-1335-Orl-31GJK, 2009 WL 2371407, *5
(M.D. Fla. Aug. 4, 2009)). Because the attorney=s fee was separately negotiated, Plaintiff=s
recovery clearly was not affected by the amount of the attorneys’ fee. The court has considered
the amount of the fee and finds it to be reasonable.

III. Conclusion
The court finds Plaintiff’s claims represent a bona fide dispute over FLSA provisions,
namely FLSA coverage and the amount of his backpay, if any, and further finds the parties’
settlement is a fair and reasonable resolution of these bona fide disputes.
Therefore, the parties’ Joint Motion for Approval of Settlement is GRANTED, and the
settlement is APPROVED. A separate order will be entered.
DONE this 14th day of March 2016.

_______________________________
JOHN H. ENGLAND, III
UNITED STATES MAGISTRATE JUDGE