Ruiz v. Gaby Food Services Inc

Filing 19

MEMORANDUM OPINION - The court finds Ruizs 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 Joint Motion for Approval of Settlement (doc. 18) is GRANTED, and the settlement is APPROVED. A separate order will be entered. Signed by Magistrate Judge John H England, III on 9/26/2017. (KEK)

FILED
2017 Sep-26 PM 02:13
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
JUDITH RUIZ,
Plaintiff,
v.
GABY FOOD SERVICES, INC.,
Defendant.

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Case No.:

2:16-cv-01616-JHE

MEMORANDUM OPINION1
Plaintiff Judith Ruiz and Defendant Gaby Food Services, Inc. jointly move for approval of
their settlement agreement, (doc. 18), which in part represents the resolution of a disputed matter
under the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. (“FLSA”). (Id.). For the reasons set
forth below, the court approves the parties’ settlement.
I. Background Facts
Ruiz filed this action on September 30, 2016, alleging she was deprived of a lawful
minimum wage for hours worked in violation of the Fair Labor Standards Act (“FLSA”), 29 U.S.C.
§ 201, et. seq. (Doc. 1).

Specifically, Ruiz contends the defendant deducted credit card fees in

excess of the fee charged by the credit card servicer and maintained a tip-sharing pool that violated
the “tip credit” allowances provided by the FLSA. (Id.). The defendant filed an answer to the
complaint, (doc. 7), and the parties engaged in discovery.

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However, recognizing and

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. 13).
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acknowledging the expense in time and money of litigation, the uncertainty and risk of litigation,
as well as the difficulties and delays inherent to such litigation, the parties have reached a
settlement of this action, the terms of which are contained in the “Settlement Agreement, General
Release and Waiver of Judith Ruiz’s Claims” (“the Agreement”). (Docs. 18 at ¶¶ 2-3 & 18-2).
Under the Agreement, the defendant has agreed to pay Ruiz a specified amount to settle
her FLSA claims regarding the dispute over improper deduction of credit card fees in relation to
the function of Defendant’s tip pool and attorney’s fees and costs to Ruiz’s counsel. 2
Specifically, Ruiz is to receive $ 3,750.00 representing unpaid wages and $ 3,750.00 representing
liquidated damages.

Ruiz’s counsel will receive $ 7,500.00.

(Doc. 18-2 at ¶ 1.a.(1)).

The

parties stipulate and agree the terms set forth in the Agreement constitute a fair and reasonable
resolution of a bona fide dispute.

(Doc. 18 at ¶¶ 3-4).
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. 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
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Additionally, as Ruiz has a pending Charge of Discrimination filed with the Equal
Opportunity Employment Commission (“EEOC”) and the Agreement includes consideration for
the dismissal of this Charge, the additional consideration and payments for the settlement of this
non-FLSA charge were included in the Agreement, but separated with specific amounts redacted.
(See doc. 18-2).
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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).

Here, the parties have a legitimate dispute as to the merits of the case; specifically, Ruiz
contends the defendant violated the FLSA by failing to pay minimum wage for all hours worked
and the defendant disputes Ruiz’s factual allegations that she worked the hours claimed and
contends no impermissible deductions were made that would nullify Defendant’s use of the FLSA
“tip-credit.”

(See doc. 18 at ¶ 7).

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
contains agreed-upon attorney’s fees and costs amount.

Ruiz’s attorney’s fees were negotiated

at arm’s length and the defendant agrees that the agreed upon amount is fair and reasonable for the
FLSA claim. (Doc. 18 at ¶ 16). “Where the attorney’s fee was agreed upon separately, without

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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)). Because the parties represent the attorney’s
fee was separately negotiated, (doc. 18 at ¶¶ 16-18), the court concludes Ruiz’s recovery 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 Ruiz’s 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’ Joint Motion for Approval of Settlement (doc. 18) is GRANTED,
and the settlement is APPROVED. A separate order will be entered.
DONE this 26th day of September, 2017.

_______________________________
JOHN H. ENGLAND, III
UNITED STATES MAGISTRATE JUDGE

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