Padilla v. Redmont Properties LLC et al
MEMORANDUM OPINION. Signed by Judge Madeline Hughes Haikala on 11/30/2018. (JLC)
2018 Nov-30 PM 04:27
U.S. DISTRICT COURT
N.D. OF ALABAMA
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
CARLOS PADILLA, JORGE
ORTIZ, and DEMETRIO
REDMONT PROPERTIES, LLC,
REDMONT PROPERTIES E.G.,
LLC, REDMONT PROPERTIES
OF HOMEWOOD, LLC, FRED G.
NUNNELLEY, III, and RM
Case No.: 2:17-cv-01826-MHH
This opinion concerns a proposed FLSA settlement. Plaintiff Carlos Padilla
brought this lawsuit against defendants Redmont Properties, LLC; Redmont
Properties E.G., LLC; Redmont Properties of Homewood, LLC; RM Management,
LLC; and Fred G. Nunnelly, III on behalf of himself and other similarly situated
individuals. (Doc. 1). Mr. Padilla originally asserted a claim for violation of the
Fair Labor Standards Act‟s overtime provision, 29 U.S.C. § 207(a)(1), against the
defendants. (Doc. 1, p. 8). Mr. Padilla later amended his complaint to add claims
for race discrimination under Title VII and 42 U.S.C. § 1981 and to add two
similarly situated individuals, Jorge Ortiz and Demetrio Padilla, as plaintiffs.
The parties have agreed to settle the plaintiffs‟ FLSA claims for unpaid
overtime wages, and they have asked the Court to review the terms of the proposed
settlement. (Doc. 32). The three settlement agreements are identical in their terms,
except for the specific sums the defendants will pay to each plaintiff. For the
reasons stated below, the Court approves the parties‟ proposed FLSA settlements
because they are fair and reasonable compromises of a bona fide dispute.
The plaintiffs are residents of Birmingham who performed maintenance and
repair work on residential properties owned and managed by the defendants in
Jefferson County, Alabama. (Doc. 28-3, ¶¶ 12, 18–19; Doc. 11, ¶ 16). Carlos
Padilla has worked on the defendants‟ properties since 2001. (Doc. 32-1, p. 8, ¶ 2).
Jorge Ortiz and Demetrio Padilla have worked on the defendants‟ properties since
2002. (Doc. 32-2, p. 8, ¶ 2; Doc. 32-3, p. 8, ¶ 2). The plaintiffs allege that they
regularly spent more than 40 hours each week painting and performing
maintenance for the defendants. (Doc. 28-3, ¶¶ 12, 20). Carlos Padilla contends
that, during the years 2016 and 2017, he often worked more than double the
standard forty-hour workweek maintaining the defendants‟ properties. (Doc. 28-3,
Although the defendants were aware that the plaintiffs routinely
worked more than 40 hours per week, the defendants did not compensate the
plaintiffs at the required time-and-a-half rate for overtime hours. (Doc. 28-3, ¶¶
The defendants argue that they have no obligation to the plaintiffs under the
FLSA because the plaintiffs are independent contractors who are exempt from the
FLSA‟s wage requirements. (Doc. 11, ¶¶ 17, 19; Doc. 32, ¶ 4). The defendants
also contest the numbers of hours that the plaintiffs contend they worked during
2016 and 2017. (Doc. 32, ¶ 4).
With the assistance of a mediator, the parties negotiated a settlement of the
plaintiffs‟ FLSA claims. (Doc. 32, ¶ 2). In exchange for dismissal of the FSLA
claims with prejudice, the defendants have agreed to settle each FLSA claim as
follows: Carlos Padilla will receive $65,660.78 (Doc. 32-1, p. 1); Jorge Ortiz will
receive $60,911.85 (Doc. 32-2, p. 1); and Demetrio Padilla will receive $9,956.59
(Doc. 32-3, p. 1). Additionally, defendants will pay a total attorney‟s fee of
$8,000.00. (Doc. 32-1, p. 2; Doc. 32-2, p. 2; Doc. 32-3, p. 2).
On this record, the Court considers the parties‟ motion to approve the
proposed settlement of the plaintiffs‟ FLSA claims.
“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 1½ times the employees‟ regular
wages.” 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));
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) (quoting Overnight Motor
Trans. Co. v. Missel, 316 U.S. 572, 578 (1942)). 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 well-being.‟” Stalnaker v.
Novar Corp., 293 F. Supp. 2d 1260, 1264 (M.D. Ala. 2003) (quoting Brooklyn
Savs. Bank v. O’Neil, 324 U.S. 697, 706 (1945)).
If an employee proves that her 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)); see also
Brooklyn, 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
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
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
The Court finds that there is a bona fide dispute in this matter that supports
the parties‟ proposed FLSA settlement. The plaintiffs maintain that the defendants
failed to compensate them as required by the FLSA. (Doc. 28-3, p. 4). The
defendants contend that they had no obligation to the plaintiffs under the FLSA
because the plaintiffs were independent contractors, not employees. (Doc. 24, ¶
19). This bona fide dispute supports the parties‟ proposed settlement.
The Court finds that the method used to calculate the plaintiffs‟ disputed
wages is fair and reasonable. The settlement proceeds of $65,660.78 for Carlos
Padilla, $60,911.85 for Jorge Ortiz, and $9,956.69 for Demetrio Padilla represent a
fair and reasonable compromise based on the existing evidence regarding unpaid
wages. (Doc. 32-1, p. 1; Doc. 32-2, p. 1; Doc. 32-3, p. 1). The plaintiffs, in signed
declarations, state that they reviewed their existing time records with the assistance
of plaintiff‟s counsel before agreeing to these settlements. (Doc. 32-1, p. 8, ¶ 5;
Doc. 32-2, p. 8, ¶ 6; Doc. 32-3, p. 8, ¶ 6). Based on a review of their time records,
the plaintiffs stipulate that the sums to be paid under the settlement agreements
represent “100% of their claimed and disputed unpaid wages, overtime wages, and
liquidated damages over a two year time frame.”1 (Doc. 32, ¶ 3; Doc. 32-1, p. 8 ¶¶
5, 7; Doc. 32-2, p. 8, ¶¶ 6, 8; Doc. 32-3, p. 8, ¶¶ 6, 8).
In addition to the sums recovered by the plaintiffs, the defendants have
agreed to pay plaintiffs‟ attorney‟s fees and costs. (Doc. 32-1, p. 1; Doc. 32-2, p.
1; Doc. 32-3, p. 1). In total, the defendants have agreed to pay $8,000 in fees and
costs to Bonet & Smith, P.C. (Doc. 32-1, ¶ 2; Doc. 32-2, ¶ 2; Doc. 32-3, ¶ 2). The
Court reviews the attorney‟s fees awarded under the agreement “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 plaintiffs stipulate
that the total amount to be paid by the defendants represents the costs and fees that
they incurred to bring this action. (Doc. 32-1, p. 8 ¶ 6; Doc. 32-2, p. 8, ¶ 7; Doc.
32-3, p. 8, ¶ 7). All parties stipulate that the defendants‟ agreement to pay these
fees did not adversely affect the plaintiffs‟ recovery. (Doc. 32, ¶ 3). The total fees
and costs appear modest in relation to the plaintiffs‟ total recovery and to the
amount that each plaintiff will receive. Thus, the fees and costs that the defendants
will pay do not suggest that plaintiffs‟ counsel was pursuing her own interests at
the expense of her clients during the settlement negotiations. And, based on the
The statute of limitations on claims for non-willful violations of the FLSA is two years.
29 U.S.C. § 255(a). The plaintiffs have agreed that the two-year limit, rather than the three-year
limit for willful violations, applies to their claims. (Doc. 32, ¶ 3).
plaintiffs‟ declarations, the Court concludes that plaintiffs‟ counsel has been
adequately compensated for her efforts.
The parties have included a release provision in their agreement. (Doc. 321, ¶ 3; Doc. 32-2, ¶ 3; Doc. 32-3, ¶ 3). The Court must review this provision to
ensure that the defendants are not using an FLSA claim “to leverage a release from
liability unconnected to the FLSA.” 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).
The provision in the parties‟ proposed settlement is entitled “FLSA Release,” and
it requires the plaintiffs to forfeit “any claim arising under the FLSA,” that accrued
prior to the date of the agreement. (Doc. 32-1, ¶ 3). The provision covers only
extant FLSA claims and expressly provides that the plaintiffs retain the right to
bring claims for future FLSA violations. (Doc. 32-1, ¶ 3). The provision is not
susceptible of a reading that broadens the scope of the plaintiffs‟ release to cover
matters unconnected with the FLSA. Therefore, the release provision is not an
obstacle to the Court‟s approval of the parties‟ agreement.
Finally, the parties have included a section entitled “Covenant Not to Sue” in
their agreement. (Doc. 32-1, ¶ 5; Doc. 32-2, ¶ 5; Doc. 32-3, ¶ 5). The language in
this provision is broad: “This Agreement may be introduced as evidence at any
legal proceedings as a complete defense to any claims existing as of the date of this
Agreement or that could have been asserted by Plaintiff against Defendants.”
(Doc. 32-1, ¶ 5; Doc. 32-2, ¶ 5; Doc. 32-3, ¶ 5).
The Court limits the
enforceability of this provision to FLSA claims existing as of the date of the FLSA
settlement agreement. The Court gave the parties an opportunity to object to the
limitation, and the parties raised no objection. (Doc. 34). Thus, the covenant
language in the parties‟ settlement agreements is unenforceable to the extent that it
pertains to any claim other than the plaintiffs‟ curremt FLSA claims.
For the reasons stated above, the Court approves the parties‟ proposed FLSA
settlements. The parties separately have agreed to dismiss the plaintiffs‟ remaining
claims under Title VII and section 1981 with prejudice. (Doc. 33). Therefore, the
Court will enter a separate order dismissing the case.
DONE and ORDERED this November 30, 2018.
MADELINE HUGHES HAIKALA
UNITED STATES DISTRICT JUDGE
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