Fogg et al v. Over The Mountain Sedan LLC et al

Filing 47

MEMORANDUM OPINION - The court finds plaintiffs FLSA claims represent a bona fide dispute over FLSA provisions and the parties settlement is a fair and reasonable resolution of these bona fide disputes. Therefore, the parties second motion for settlement approval, (doc. 46), is GRANTED, and the settlement is APPROVED with the exception of the confidentiality provision, which is STRICKEN. A separate order will be entered. Signed by Magistrate Judge John H England, III on 11/17/2017. (Attachments: # 1 Exhibit A)(KEK)

FILED
2017 Nov-17 PM 01:37
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
PATRICIA FOGG, et al.,
Plaintiffs,
v.
OVER THE MOUNTAIN SEDAN, LLC,
et al.,
Defendants.

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Case No.: 2:16-cv-00699-JHE

MEMORANDUM OPINION1
Plaintiffs Patricia Fogg and Richard Boyle and Defendant Bruce McCormick (who appears
pro se) have jointly requested approval of their settlement agreement (attached to this
memorandum opinion as Exhibit A), which represents the resolution of a disputed matter under
the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. (“FLSA”).2 (Doc. 46). For the reasons set
forth below, the court approves the parties’ settlement.
Background Facts
On April 29, 2016, Plaintiffs filed this action, alleging they were deprived of overtime
compensation and retaliated against in violation of the FLSA by Defendants Bruce McCormick
and Over the Mountain Sedan, LLC. (Doc. 1). Specifically, the plaintiffs contend (1) the

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In accordance with the provisions of 28 U.S.C. § 636(c) and Federal Rule of Civil
Procedure 73, the parties have voluntarily consented to have a United States Magistrate Judge
conduct any and all proceedings, including trial and the entry of final judgment. (Doc. 11).
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A previous version of this motion included as a party Over the Mountain Sedan, LLC, an
unrepresented corporation. (Doc. 42). Plaintiffs have dismissed their claims against Over the
Mountain Sedan, LLC. (Docs. 44 & 45). Therefore, the previous motion for settlement approval,
(doc. 42), is DENIED.

defendants, both of whom they alleged were employers under the FLSA, misclassified them as
independent contractors rather than employees and, as such, they were not paid overtime despite
working more than forty hours per week; and (2) with respect to Boyle, that the defendants
retaliated against Boyle for informing them he should be treated as an employee rather than an
independent contractor by terminating his employment. (See id.). On May 18, 2016, the plaintiffs
amended their complaint, alleging that Fogg’s employment had since been terminated in retaliation
for filing the lawsuit. (Doc. 8). The defendants answered both complaints. (Docs. 8 & 13).
Plaintiffs have dismissed their claims against Defendant Over the Mountain Sedan, LLC, (docs.
44 & 45), leaving McCormick as the lone remaining defendant. The parties have engaged in
written discovery, (see doc. 29 at ¶ 2), and mediation, and reached a settlement on October 5, 2017.
The terms of the settlement are contained in a document submitted directly to the undersigned (the
“Agreement”), which is attached to this memorandum opinion and made part of the record. (See
Exhibit A). The undersigned has reviewed the Agreement.
Under the Agreement, McCormick has agreed to pay Fogg and Boyle $350.00 per month
for a period of eighteen months, for a total of $6,300.00 due to each. (Exh. A at 9). McCormick
has also agreed to pay plaintiffs’ counsel $9,000.00, broken down into $8,600.00 in attorneys’ fees
and $400.00 in costs. (Id. at 8-10). The parties stipulate and agree the terms set forth in the
Agreement constitute a fair and reasonable resolution of a bona fide dispute. (Id. at 10).
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
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employee.’” Silva v. Miller, 307 Fed. Appx. 349, 351 (11th Cir. 2009) (quoting Lynn’s Food
Stores, Inc. v. 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
Eleventh Circuit stated there 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).
As a preliminary matter, the undersigned must deal with a confidentiality provision
contained in the agreement. The provision states: “Plaintiffs understand that confidentiality is a
material inducement to this settlement. Defendant McCormick acknowledges that the Court may
strike this provision.” (Exh. A at 10). Perhaps due to this provision, the parties submitted the
settlement agreement to the chambers e-mail of the undersigned, rather than filing it on the docket.
“Absent 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
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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 (1945)). While an FLSA confidentiality provision is not per se
unenforceable, a party seeking to include one must show compelling reasons why it should be
upheld. Briggins v. Elwood TRI, Inc., 3 F. Supp. 3d 1277, 1280 (N.D. Ala. 2014). When offered
the opportunity to justify the inclusion of the provision, neither party offered such a compelling
reason, and the undersigned discerns no justification consistent with the goals of the FLSA for the
confidentiality provision. Therefore, the confidentiality provision is stricken.
Turning to the remainder of the settlement agreement, the parties’ dispute as to the merits
of the case is legitimate. Specifically, Plaintiffs allege Defendant violated the FLSA by classifying
them as independent contractors and failing to pay them overtime over a more than two-year
period, when each worked over forty hours per week in some weeks; Defendant denies this. (Exh.
A at 6-7). The settlement is appropriate for the disputed overtime wages. Plaintiffs have had the
benefit of examining Defendant’s payroll records, internal correspondence, and schedules to
estimate the total number of overtime hours they worked without receiving a time-and-a-half
premium. (Exh. A at 6-8). Plaintiffs state they have compromised their disputed claims due to
concerns about Defendant’s financial posture and ability to pay; conversely, Defendant (though
denying liability) states the settlement is in excess of what Plaintiffs would receive if they were
successful at trial, in terms of both unpaid wages and liquidated damages. (Exh. A at 8). The
parties also note the inherent risks of continued litigation. (Id.). Due to these circumstances,
particularly Defendant’s potential inability to pay a judgment even if Plaintiffs were successful at
trial, the undersigned finds the compromise of Plaintiffs’ claims is reasonable.

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“Where 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., 2010 WL 3958701,
*2 (M.D. Fla. Sept. 20, 2010) (quoting Bonetti v. Embarq Mgmt. Co., 2009 WL 2371407, *5 (M.D.
Fla. Aug. 4, 2009)). The parties report the matter of attorneys’ fees was negotiated at arm’s length
and was based on the work performed by Plaintiffs’ counsel and likely hourly rates awardable, and
the undersigned concludes Plaintiffs’ recoveries were not affected by the amount of the attorneys’
fee. (Exh. A at 9). Therefore, the undersigned finds the attorneys’ fees are reasonable.
Conclusion
The court finds plaintiffs’ FLSA claims represent a bona fide dispute over FLSA provisions
and the parties’ settlement is a fair and reasonable resolution of these bona fide disputes. Therefore,
the parties’ second motion for settlement approval, (doc. 46), is GRANTED, and the settlement
is APPROVED with the exception of the confidentiality provision, which is STRICKEN. A
separate order will be entered.
DONE this 17th day of November, 2017.

_______________________________
JOHN H. ENGLAND, III
UNITED STATES MAGISTRATE JUDGE

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