Parker v. M&M Tire & Mechanical Services Inc et al
Filing
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MEMORANDUM OPINION - In compliance with the Courts duty to review proposed settlements of FLSA claims, the Court has reviewed and approved the parties settlement agreement for the reasons stated above. The Court will enter a separate order dismissing the Ms. Parkers claims with prejudice and closing the file. Signed by Judge Madeline Hughes Haikala on 12/12/2018. (KEK)
FILED
2018 Dec-12 AM 08:56
U.S. DISTRICT COURT
N.D. OF ALABAMA
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
KIMBERLY PARKER,
Plaintiff,
v.
M&M TIRE & MECHANICAL
SERVICES, INC. et al,
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Case No.: 2:17-cv-01720-MHH
Defendants.
MEMORANDUM OPINION
Kimberly Parker brought this action against her former employer and its
owner to recover compensation allegedly due under the Fair Labor Standards Act,
29 U.S.C. § 201 et seq. (Doc. 1). The Court stayed proceedings at the parties’
request to allow the parties to discuss settlement. (Docs. 23, 25, 27). The parties
have proposed a settlement agreement for this Court to approve pursuant to Lynn's
Food Stores, Inc. v. United States, 679 F.2d 1350 (11th Cir.1982). (Docs. 28, 29).
As discussed in greater detail below, because the parties’ agreement represents a
fair and reasonable resolution of a bona fide dispute under the FLSA, the Court
approves the parties’ settlement.
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I.
BACKGROUND
Rhonda Holley owns M&M Tire and Mechanical Services, Inc., a mobile
tire and mechanical service company for commercial trucks. (Doc. 1, pp. 6-7, ¶
28). Ms. Parker worked as a dispatcher for M&M Tire from October 19, 2014
through March 29, 2016. (Doc. 1, pp. 3, 6-7, ¶¶ 7, 28). Ms. Parker alleges that
during this time period, M&M Tire did not pay her at the overtime rate for hours
which exceeded forty per week, paid her for only full hours worked, and
unilaterally reduced her hourly pay from $9.00 to $7.74 after she complained to
M&M Tire about her unpaid wages. (Doc. 1, pp. 7-8, ¶¶ 34, 36; Doc. 28, pp. 2-3).
M&M Tire admits that “there were some work weeks in which [Plaintiff]
was not compensated at time and one half for hours worked over forty” and that it
“had actual knowledge of the time Plaintiff reported through [M&M Tire’s]
timekeeping system.” (Doc. 8, p. 4, ¶¶ 25, 36, 38-40). M&M Tire denies that it
willfully violated the FLSA, however, and it asserts that it did not know or have
reason to know that Ms. Parker did not receive full overtime and hourly
compensation. (Doc. 8, p. 4, ¶¶ 36, 38; Doc. 28, p. 3).
To resolve her FLSA claims against the defendants, Ms. Parker has agreed
to dismiss her claims in exchange for M&M Tire’s payment of $3,500 in back pay
damages and $3,500 in liquidated damages, remitted by December 31, 2018. (Doc.
29, pp. 1-2, ¶¶ 3-4, 7). M&M Tire also has agreed to pay counsel for Ms. Parker
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$16,554.60 in attorney’s fees and $993.15 in costs and expenses in two
installments. (Doc. 29, p. 2, ¶¶ 5, 7). The first installment of $5,849.25 is due on
or before December 31, 2018, and the second installment of $11,698.50 is due on
or before January 31, 2019. (Doc. 29, p. 2, ¶¶ 5, 7).
II.
DISUCSSION
“Congress enacted the FLSA in 1938 with the goal of ‘protect[ing] all
covered workers from substandard wages and oppressive working hours.’”
Christopher v. SmithKline Beecham Corp., 567 U.S. 142, 147 (2012) (quoting
Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 739 (1981) (noting
that 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”) (emphasis in original) (alterations
and quotation marks omitted)); see also 29 U.S.C. § 202(a) (indicating
congressional intent to eliminate labor conditions “detrimental to the maintenance
of the minim standard of living necessary for health, efficiency, and general wellbeing of workers”). In the context of overtime, for example, the FLSA obligates
employers to compensate employees for hours in excess of 40 per week at a rate of
1½ times the employees’ regular wages. 29 U.S.C. § 207(a).
If an employee proves that her employer violated the FLSA, then the
employer must remit to the employee all unpaid wages or compensation, liquidated
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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 Savs. 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 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
1352; see also Hogan, 821 F. Supp. 2d at 1281-82. “[T]he 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). The information that the parties provide should
enable the Court “to ensure that employees have received all uncontested wages
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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 the settlement. Lynn’s Food, 679 F.2d at 1354; see also Silva,
307 Fed. Appx. at 351 (emphasizing that a proposed settlement must be fair and
reasonable).
Here, there is a bona fide dispute concerning the nature of the reduction in
Ms. Parker’s hourly wage and the extent to which the defendants willfully violated
the FLSA such that a three-year statute of limitations would apply in this case.
With the benefit of the extensive time records and pay reports that M&M Tire
provided, Ms. Parker calculated that M&M Tire owes her $5,838 in backpay and
liquidated damages for the period from October 19, 2014 to September 2015 and
$1,626.39 in backpay for the period from September 12, 2015 to April 2, 2016.
M&M Tire has agreed to pay the full amount for the first time period, and the
parties have agreed to settle the amount in the latter time period for $1,162. (Doc.
28, ¶¶ 3-5). These figures represent a fair and reasonable settlement of Ms.
Parker’s claims.
M&M Tire has agreed separately to pay Ms. Parker’s attorney’s fees of
$16,554.60 and costs of $993.15.
The Court reviews “the reasonableness of
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counsel’s legal fees to assure both that counsel is compensated adequately and that
no conflict of interest taints the amount the wronged employee recovers under a
settlement agreement.” Silva, 307 Fed. Appx. at 351 (citing Lynn’s Food, 679 F.2d
at 1352). The parties negotiated the attorney’s fees and costs after settling Ms.
Parker’s claims. (Doc. 28, p. 8, ¶ 11). Although the attorney’s fees and costs
exceed Ms. Parker’s settlement proceeds, the negotiated amount reflects a
reasonable and discounted hourly rate.
(Doc. 28, p. 8, ¶ 11).
Under these
circumstances, the Court finds that the attorney’s fees and costs are fair,
reasonable, and independent of Ms. Parker’s settlement amount.
To ensure that M&M Tire is not using an FLSA claim “to leverage a release
from liability unconnected to the FLSA[,]” the Court has reviewed the release
provision in the settlement agreement. Moreno v. Regions Bank, 729 F. Supp. 2d
1346, 1351 (M.D. Fla. 2010); see also Hogan, 821 F. Supp. 2d at 1282 (stating that
an employer may not require valuable concessions for wages due under the FLSA).
Under the release provision, Ms. Parker agrees to:
Waive and release every known or unknown wage and hour claim,
action, lawsuit or cause of action, asserted or unasserted, that Plaintiff
may have against Defendants relating to her employment with
Defendants from October 2014-2016 (excluding any claims accruing
in the future).
(Doc. 29, p. 1, ¶ 2.b). The Court approves this release provision to the extent that
the reference to “wage and hour” claims translates to FLSA claims.
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III.
CONCLUSION
In compliance with the Court’s duty to review proposed settlements of
FLSA claims, the Court has reviewed and approved the parties’ settlement
agreement for the reasons stated above. The Court will enter a separate order
dismissing the Ms. Parker’s claims with prejudice and closing the file.
DONE and ORDERED this December 12, 2018.
_________________________________
MADELINE HUGHES HAIKALA
UNITED STATES DISTRICT JUDGE
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