Brooks v. Postal Fleet Services Inc

Filing 15

MEMORANDUM OPINION - The court finds Brooks FLSA claims represent a bona fide dispute over FLSA provisions, the parties settlement is a fair and reasonable resolution of this bona fide dispute, and that the fees/cost award was negotiated separately. Therefore, the parties Joint Motion for Approval of Settlement (doc. 14) is GRANTED, and the settlement is APPROVED. A separate order will be entered. Signed by Magistrate Judge John H England, III on 3/2/2018. (KEK)

FILED
2018 Mar-02 AM 09:35
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
ERNEST BROOKS,
Plaintiff,
v.
POSTAL FLEET SERVICES, INC.,
Defendant.

)
)
)
)
)
)
)
)
)
)

Case No.:

2:17-cv-02120-JHE

MEMORANDUM OPINION 1
Plaintiff Ernest Brooks (“Brooks”) and Defendant Postal Fleet Services, Inc. (“Postal
Fleet”) jointly move for approval of their settlement agreement, which represents the resolution of
a disputed matter under the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. (“FLSA”). (Doc.
14).

For the reasons set forth below, the court APPROVES the parties’ settlement.
I. Background Facts
Brooks, a former Assistant Manager of Postal Fleet, filed this action on December 18,

2017, alleging he was not paid overtime wages for hours worked in excess of forty hours per week,
when he was performing the vast majority of work driving hauling trucks.

(Doc. 1).

Brooks

alleged that due to his extensive non-management duties he did not qualify for the administrative
or professional exemption from overtime under §13(a)(1) of the FLSA. (Id.). As relief, Brooks

1

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).
1

sought the alleged unpaid back wages, statutory liquidated damages, and attorneys’ fees and costs.
(Id.).
Postal Fleet denies all liability and disputes Brooks’ claims on factual and legal basis.
(Doc. 7).

Postal Fleet maintains that Brooks was exempt from the overtime compensation

requirements of the FLSA as a driver of a commercial motor vehicle under the 29 USC §213(b)(1)
related to the Motor Carrier Act exemptions. (See doc. 14 at 2).

Postal Fleet also denies that

Brooks was not properly compensated for the time he worked and denies that he is entitled to
overtime or any additional compensation or damages.

(See docs. 7 & 14).

After Brooks filed the Complaint and the parties exchanged FRCP Rule 26(a)(1) Initial
Disclosures, the parties engaged in arms-length discussions about the merits of the case. (Doc. 14
at 2).

The parties continue to disagree on various factual and legal issues, including the hours

Brooks worked, Brooks’ job duties, and whether Brooks is exempt from the overtime
requirements.

(Id.).

Facts were discovered in preparation to exchange Rule 26 Initial

Disclosures that Brooks almost exclusively drove commercial motor vehicles in excess of 10,000
pounds, subjecting Brooks to the exemption from the payment of overtime under the Motor Carrier
Act Exemption. (Id. at 2-3 citing 29 U.S.C. §213(b)(1)). In light of these discrepancies to the
original claim, the uncertainty of their outcome in litigation, the significant time and expense
involved in litigating the case through trial, and the difficulties and delays inherent in such
litigation, the parties agreed to settle the case, with Postal Fleet to pay a compromised amount of
unpaid wages. (Id. at 3).
(doc. 14-1).

On February 20, 2018, the parties executed a Settlement Agreement,

(Doc. 14 at 3).

2

The Settlement Agreement provides for a total payment of $1,000 to Brooks — $1,000.00
for unpaid wages and liquidated damages. Brooks claimed he worked twenty to forty overtime
hours per week and that his job consisted primarily of driving a commercial motor vehicle. (Doc.
14 at 3).

Postal Fleet provided Brooks with information challenging the number of hours he

claimed he worked and information regarding his job duties that evidenced his overtime exempt
status under the Motor Carrier Act Exemption.

(Id. citing 29 U.S.C. §213(b)(1)).

In light of

that information, and after further discussion between the parties, the parties agreed the total sum
of $1000.00 was a fair and reasonable compromise. (Id.).

Postal Fleet contends its reliance on

the Motor Carrier Act Exemption from the payment of overtime was in good faith, and therefore,
liquidated damages are disputed; nevertheless, for the purposes of settlement only, the payment of
$1000.00 is intended to include liquidated damages.

(Id. at 3-4).

Additionally, the parties separately negotiated the amount of attorneys’ fees and costs
Postal Fleet would pay so that Brooks’ recovery would not be affected. The parties negotiated
$750.00 to cover Brooks’ attorneys’ fees and $400.50 for costs.
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
3

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).

A. Bona Fide Dispute Between the Parties
Here, the parties have a legitimate, bona fide dispute as to the merits of the case;
specifically, Brooks alleges Postal Fleet failed to pay his overtime wages for certain hours worked
in excess of forty in a work week, and Postal Fleet denied those allegations and raised additional
affirmative defenses, including applicable exemptions from the overtime requirements. (Docs. 1
& 7). After exchanging information and discussing the merits of Brooks’ claims, the parties
continue to disagree as to whether overtime wages are owed to Brooks.

4

B. Reasonableness of Settlement Amount
Additionally, the settlement amount (as set out in the terms above) is an appropriate amount
for the disputed unpaid wages and liquidated damages. A general framework for evaluating the
fairness and reasonableness of an FLSA compromise includes: (1) the existence of fraud or
collusion behind the settlement; (2) the complexity, expense and likely duration of the litigation;
(3) the state of the proceedings and the amount of discovery completed; (4) the probability of
plaintiff’s success on the merits; (5) the range of possible recovery; and (6) the opinions of counsel.
See Dodd v. Schneider National Carriers, Case. No. 2:13-CV-01042-JHE (N.D. Ala. Sept. 24,
2014); Dees v. Hydradry, 706 F. Supp. 2d 1227, 1241 (M.D. Fla. 2010). In reviewing the terms of
a proposed settlement, there is a strong presumption in favor of finding that it is fair. Cotton v.
Hinton, 559 F. 2d 1326, 1331 (5th Cir. 1977). As to factor (1), the parties submit that the settlement
amount was reached through fact-based, good faith negotiation, wherein each party recognized
weaknesses in its position, strengths in the other’s positions, and compromised accordingly to
avoid the expense and uncertainty of further litigation. As to factors (2) and (3), the parties reached
the settlement after exchanging and evaluating sufficient information pertinent to Brooks’ claims
to enable the parties to make an informed analysis and assessment of the case. By resolving the
case in this fashion, the parties can avoid the extensive expense of further discovery, including
deposition discovery, discovery disputes, pretrial requirements, trial preparation, and trial. As to
factors (4) and (5), Postal Fleet presented information and a legal argument that was potentially
dispositive and lessened the probability of Brooks’ success on the merits and narrowed the range
of possible range of recovery, including evidence disputing Brooks’ claims about his non-exempt

5

status and the number of overtime hours he worked. Additionally, Brooks would have had to prove
willfulness to recover liquidated damages.
As for factor (6), all parties were represented by competent and experienced attorneys who
are well versed in this area of the law. Counsel evaluated the merits of the case and the probability
of different outcomes with their respective clients. Brooks was included in the negotiations, fully
informed of his options, and entered into settlement knowingly and voluntarily as evidenced by
his signature affixed to the Settlement Agreement.

(See doc. 14-1). Thus, the court agrees that

the settlement is a fair and reasonable resolution.
C. Attorney’s Fees and Costs
The proposed settlement agreement also contains agreed-upon attorney’s fees and costs
amount.

Brooks’ attorney’s fees were negotiated separately and at arm’s length. (See doc. 14).

“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)). Because the parties represent the attorney’s fee was separately negotiated,
(doc. 14), the court concludes Brooks’ 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 Brooks’ FLSA claims represent a bona fide dispute over FLSA provisions,
6

the parties’ settlement is a fair and reasonable resolution of this bona fide dispute, and that the
fees/cost award was negotiated separately. Therefore, the parties’ Joint Motion for Approval of
Settlement (doc. 14) is GRANTED, and the settlement is APPROVED. A separate order will
be entered.
DONE this 2nd day of March, 2018.

_______________________________
JOHN H. ENGLAND, III
UNITED STATES MAGISTRATE JUDGE

7