Williams v. Wintzell's Oyster House

Filing 79

Order granting 69 Joint MOTION to Approve Settlement Agreement. The proposed settlement of plaintiffs' claims against defendant Wintzell's, Inc. is approved (Wintzells, Inc. terminated as defendant). The 66 MOTION for Leave to File Sur-Reply concerning Plaintiffs' Motion for Conditional Certification is granted. Sur-Reply due by 12/3/2015. Signed by Chief Judge William H. Steele on 11/24/2015. (tgw)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
RAVEN WILLIAMS, et al.,
Plaintiffs,
v.
ROBERT W. OMAINSKY, et al.,
Defendants.

)
)
)
)
)
)
)
)
)

CIVIL ACTION 15-0123-WS-N

ORDER
This matter comes before the Court on the Joint Motion to Approve Settlement (doc. 69)
filed by plaintiffs and defendant Wintzell’s, Inc., and on the Motion for Leave to File Sur-Reply
(doc. 66) filed by defendants Fried Stewed Nude, Inc. and Robert W. Omainsky. Both Motions
are ripe for disposition.1
Plaintiffs brought this opt-in collective action against defendants, Robert W. Omainsky,
Fried Stewed Nude, Inc., and Wintzell’s, Inc., alleging violations of the Fair Labor Standards
Act, 29 U.S.C. §§ 201 et seq. (“FLSA”), at certain Wintzell’s Oyster House restaurants.
Plaintiffs’ Motion for Conditional Certification is pending. On October 23, 2015, however,
plaintiffs announced that they were finalizing a settlement with defendant Wintzell’s, Inc. (See
doc. 63.) On October 9, 2015, plaintiffs and Wintzell’s, Inc. filed a Joint Motion to Approve
Settlement. That filing, as supplemented, sets forth the sort of detailed explanation of the
circumstances, terms and mechanics of the settlement that Congress and the federal courts have
required in the FLSA context. See, e.g., Lynn’s Food Stores, Inc. v. United States, 679 F.2d
1350, 1352-53 (11th Cir. 1982) (reciting general rule that FLSA’s “provisions are not subject to
1

An Order (doc. 72) entered on November 12, 2015 directed plaintiffs and
defendant Wintzell’s, Inc. to provide certain supplemental information about their settlement,
which they have now done. (See doc. 76.) The November 12 Order also afforded the other
defendants, Fried Stewed Nude, Inc. and Robert W. Omainsky, an opportunity to respond to the
Joint Motion to Approve Settlement should they wish to do so. Those defendants elected to
remain silent.

negotiation or bargaining between employers and employees” but that “[w]hen employees bring
a private action for back wages under the FLSA, and present to the district court a proposed
settlement, the district court may enter a stipulated judgment after scrutinizing the settlement for
fairness”). The touchstone of the inquiry is whether the proposed settlement “constitutes a fair
and reasonable compromise of a bona fide FLSA dispute.” Crabtree v. Volkert, Inc., 2013 WL
593500, *3 (S.D. Ala. Feb. 14, 2013). Of course, in performing such a Lynn’s Food analysis,
“courts should be mindful of the strong presumption in favor of finding a settlement fair.”
Parker v. Chuck Stevens Chevrolet of Atmore, Inc., 2013 WL 3818886, *2 (S.D. Ala. July 23,
2013) (citations and internal quotation marks omitted). That presumption is particularly robust
and compelling where, as here, the proposed settlement is the product of arm’s-length
negotiations by experienced counsel following the exchange of relevant records, information,
calculations and arguments. (See doc. 69, at ¶¶ 8 & 11.)2
The Joint Motion to Approve Settlement demonstrates that, as between plaintiffs and
defendant Wintzell’s, Inc., there is indeed a bona fide FLSA dispute. Wintzell’s, Inc. has
identified factual and legal defenses to plaintiffs’ claims that appear to be, at a minimum,
colorable and reasonably asserted. Moreover, Wintzell’s, Inc. and plaintiffs appear to be in
agreement that Wintzell’s, Inc. is no more than a minor player in this FLSA action given that (i)
“[a]ll plaintiffs have worked exclusively at the Downtown Mobile or Saraland locations” of
Wintzell’s Oyster House; (ii) Wintzell’s, Inc. sold those locations (as well as the West Mobile
location) to an unrelated licensee, defendant Fried Stewed Nude, Inc., on November 5, 2012,
following which employees of those restaurants were no longer employed by Wintzell’s, Inc.;
and (iii) Tiffany Newburn (who was added as a plaintiff with the filing of the First Amended
Complaint (doc. 4) on March 17, 2015)3 is the only plaintiff who was employed by Wintzell’s,
2

See, e.g., Crabtree, 2013 WL 593500, at *3 (“in the absence of a bench trial, the
Court is generally not in as good a position as the parties to determine the reasonableness of an
FLSA settlement and … if the parties are represented by competent counsel in an adversary
context, the settlement they reach will, almost by definition, be reasonable”) (citation and
internal marks omitted).
3

Plaintiffs filed a “Consent to Join Form” (doc. 48) on behalf of Tiffany Newburn
on September 22, 2015; however, Newburn had already been joined as a named plaintiff in these
proceedings via pleading filed more than six months earlier.

-2-

Inc. as a server during the three-year period before becoming a party to this action. In addition to
Newburn, Sonja Curry (who filed a Consent to Join Collective Action Form on August 5, 2015
(see doc. 30, Exhs. 3 & 4)) was employed by Wintzell’s, Inc. as a server during the relevant
three-year period. No other original or opt-in plaintiffs have been identified by any party as
having been employed by Wintzell’s, Inc. during the requisite three-year look-back period for
FLSA purposes; thus, Newburn and Curry are the only parties to this action with potentially
viable wage claims against this defendant relating to tip credit eligibility. These agreed facts,
taken in concert, drastically circumscribe Wintzell’s, Inc.’s potential liability, and plaintiffs’
proposed recovery from that defendant, in these proceedings.
The Joint Motion and supporting filings reflect that this action does, indeed, involve a
bona fide FLSA dispute between plaintiffs and Wintzell’s, Inc. Among other areas of
divergence, there appears to be a good-faith factual dispute between these parties as to whether
Wintzell’s, Inc. was entitled to claim the tip credit for all or any particular weeks of the relevant
time period; whether a three-year limitations period or a two-year limitations period applies; and
whether an award of liquidated damages would be appropriate even if plaintiffs were to prevail
on the merits against Wintzell’s, Inc. All information before the Court at this time supports a
determination that plaintiffs’ FLSA claims against Wintzell’s, Inc. were actually, reasonably
contested, thereby giving rise to the possibility of a Lynn’s Food compromise settlement of those
disputed claims.
Against this backdrop of litigation uncertainty, the parties negotiated a settlement to
resolve the plaintiffs’ FLSA claims against Wintzell’s, Inc. in their entirety. The Supplement
(doc. 76) filed by the settling parties confirms that plaintiffs Newburn and Curry will receive the
full value of their claims. In particular, the Supplement reflects that (i) Newburn’s claim is for
$5 per hour (the difference between $7.25 minimum wage and the $2.25 wage she was actually
paid) for each of the 554.03 hours she worked as a server for Wintzell’s, Inc. during the relevant
three-year period, plus liquidated damages; (ii) the agreed settlement payment to Newburn will
be $2,770.15 in back pay (554.03 x $5.00), plus an additional $2,770.15 in liquidated damages;
(iii) Curry’s claim is for $5 per hour for each of the 109.58 hours she worked as a server for
Wintzell’s, Inc. during the relevant three-year period, plus liquidated damages; and (iv) the
agreed settlement payment to Curry will be $547.90 in back pay (109.58 x $5.00), plus an
additional $547.90 in liquidated damages. (Doc. 76, ¶¶ 16-17; doc. 69, Exh. A.) In light of this

-3-

full-value recovery, plus written representations by both Newburn and Curry that they
voluntarily consent to the settlement after having had a full opportunity to consult with counsel
(doc. 69, Exhs. B-1 & B-2) and that they have had an informed opportunity to review relevant
records and calculations relating to their claims (doc. 69, ¶ 8), the Court has no reservations
about accepting this portion of the settlement as fair and reasonable to plaintiffs. After all, the
settlement results in plaintiffs receiving every penny that they claim Wintzell’s, Inc. owes them,
such that their FLSA claims against that defendant are effectively being paid in full.
Accordingly, the undersigned is satisfied that the parties’ agreed-upon settlement amount is a fair
and reasonable resolution of a bona fide dispute as to plaintiffs’ FLSA causes of action against
Wintzell’s, Inc., for purposes of Lynn’s Food and its progeny. There being no uncontested
wages remaining unpaid as to this defendant, plaintiffs are plainly receiving a fair deal as to all
claims that are the subject of bona fide controversy.
Two other aspects of the proposed settlement warrant examination. First, both Newburn
and Curry signed broad waivers and general releases in favor of Wintzell’s, Inc. Such pervasive
releases are controversial in the FLSA settlement context. See, e.g., Crabtree v. Volkert, Inc.,
2013 WL 593500, *5 (S.D. Ala. Feb. 14, 2013) (“The practice of including such pervasive
releases in FLSA settlement agreements has sparked the ire of certain district courts.”). The
concern that pervasive releases engender in the FLSA settlement context is that plaintiffs will
unknowingly or involuntarily surrender rights to pursue other viable claims against a defendant
in order to obtain payment of FLSA wages that they are owed by law, effectively cheapening or
discounting the settlement below its true value under the FLSA. Nonetheless, this Court is
among those that have approved FLSA settlements containing such releases where (i) the
releases were not leveraged from uninformed, vulnerable plaintiffs who failed to appreciate the
value of that concession; and (ii) full FLSA compensation was not effectively diluted by
plaintiffs’ assent to their releases. Id. at *6. The settling parties have adequately demonstrated
that Newburn and Curry knowingly, voluntarily agreed to execute those releases in favor of
Wintzell’s, Inc.; that no one is aware of any other potentially viable claims that Newburn or
Curry have or might have against Wintzell’s, Inc.; and that neither of them has worked for
Wintzell’s, Inc. in more than two years, such that there is no ongoing employment or other
relationship between Wintzell’s, Inc. and Newburn or Curry that might support non-FLSA
claims against Wintzell’s, Inc. at this time. Based on these particularized circumstances, the

-4-

Court finds that the broad releases executed by Newburn and Curry represent a fair, knowing
compromise of the risk that other accrued, unknown claims may someday surface, without
diminishing the value of the FLSA settlement proceeds being paid to plaintiffs. In short, such
releases in no way render the settlement unfair or unreasonable under Lynn’s Food.
Second, the Court must also consider the reasonableness of the negotiated attorney’s fee
component of this FLSA settlement. See, e.g., Crabtree, 2013 WL 593500, at *7 (“a court
reviewing an FLSA settlement must review the reasonableness of 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”) (citation and internal quotation
marks omitted). Here, all indications before the Court are that the FLSA compensation portion
of the settlement was negotiated independently of the attorney’s fee component. Thus, there is
no zero-sum game here in which each settlement dollar allocated to plaintiffs’ counsel reduces
plaintiffs’ FLSA compensation by a dollar. Indeed, the settling parties have jointly represented
that “Plaintiffs’ recovery was not adversely affected by the separately negotiated amount of
attorney fees and costs to be paid to Plaintiffs’ counsel.” (Doc. 69, at 3 n.1.) Moreover, as to the
amount, the parties have agreed that Wintzell’s, Inc. will pay attorney’s fees and costs to
plaintiffs’ counsel in the amount of $5,185, calculated as a pro rata share of the total, nonseverable fees and costs accrued by plaintiffs’ counsel in litigating this matter to date. (Id. at 3.)
The parties’ stated methodology for computing the share of attorney’s fees and costs properly
allocable to Wintzell’s, Inc. (and therefore properly included in the settlement) appears sound,
fair and reasonable. As such, the Court is satisfied that the proposed attorney’s fee payment to
plaintiffs’ counsel constitutes adequate, reasonable compensation and that plaintiffs’ recovery
from Wintzell’s, Inc. was neither tainted nor otherwise adversely affected by the fee award
negotiated by their attorneys.
In sum, upon conducting the review required by Lynn’s Food Stores v. United States, 679
F.2d 1350 (11th Cir. 1982), the Court finds that the proposed settlement is a fair and reasonable
resolution of a bona fide FLSA dispute. The Court has also reviewed the proposed attorney’s fee
award, and finds same to be reasonable under governing standards and not to undermine the
fairness or reasonableness of the overall settlement. Accordingly, and for the additional reasons
specified herein, the Joint Motion to Approve Settlement (doc. 69) is granted. The proposed
settlement of plaintiffs’ claims against defendant Wintzell’s, Inc. is approved. In accordance

-5-

with the requirements of Lynn’s Food, a stipulated final judgment will be entered as to the settled
claims. The Clerk of Court is directed to terminate Wintzell’s, Inc. as a party defendant. This
action will proceed as to all plaintiffs’ claims against the remaining defendants, Robert W.
Omainsky and Fried Stewed Nude, Inc.
Also pending as this time is the remaining defendants’ Motion for Leave to File SurReply (doc. 66) concerning plaintiffs’ Motion for Conditional Certification. For cause shown,
the Motion for Leave to File Sur-Reply is granted. Defendants Omainsky and Fried Stewed
Nude may file a sur-reply, not to exceed seven (7) pages in length, in further opposition to the
Motion for Conditional Certification on or before December 3, 2015, at which time said Motion
for Conditional Certification will be taken under submission.
DONE and ORDERED this 24th day of November, 2015.
s/ WILLIAM H. STEELE
CHIEF UNITED STATES DISTRICT JUDGE

-6-