Lyons v. Beef 'O' Brady's et al

Filing 27

Order, on or before 9/30/2015, parties are to file an amended motion or affidavit addressing how the attorney's fee amount was calculated or agreed upon. Signed by Judge Callie V. S. Granade on 9/23/2015. (tot)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
HOLLY LYONS,
Plaintiff,
vs.
BEEF ‘O’ BRADY’S, FSC
FRANCHISE CO. LLC., ROBERT
THUNELIUS, TODD WYSONG,
THUNELIUS, INC., and G.T.S.C.C.,
INC.,
Defendants.

)
)
)
)
)
)
)
)
)
)
)
)
)

Civil Action No. 15-0170-CG-N

ORDER
This matter is before the court on the joint motion to approve settlement
agreement (Doc. 26) filed on September, 16, 2015. The parties jointly agree and
assert that the proposed settlement “was reached over extensive negotiations … and
represents a reasonable compromise of a disputed matter under the Fair Labor
Standards Act, 29 U.S.C. § 201, et seq.” Id. at 1-2. For the reasons stated below, the
Court finds that the agreed settlement payment to Plaintiff appears to be
reasonable; however, the parties have not provided enough information regarding
the attorney’s fee agreement for the Court to determine its reasonableness.
Accordingly, the parties will be ordered to provide additional information.

I. FACTUAL BACKGROUND
The Plaintiff, Holly Lyons (“Lyons”), initiated this action on March 31, 2015,
alleging that Defendants operated as a joint enterprise and committed violations of

the wage provisions of the FLSA, which deprived her lawful wages. Lyons’
complaint seeks to recover unpaid wages and overtime. She alleges that
Defendants failed to comply with their minimum wage obligations by ensuring that
the amount of tips retained by “tipped employees” satisfied their obligation under
the FLSA to pay its “tipped employees” at least federal minimum wage for every
hour worked. (Doc. 1, ¶¶ 36, 37). According to Lyons, at least twice a week
throughout her employment with Defendants the amount of tips she received plus
her hourly cash wage of $2.13 did not come to a total sufficient to ensure that she
earned at least the federal minimum wage for every hour worked. (Doc. 1, ¶ 38).
Lyons also alleges that approximately once a month, she worked more than forty
hours a week for Defendants, but Defendants still paid her the rate of $2.13 per
hour. (Doc. 1, ¶ 45). Defendants deny Plaintiff’s allegations. The parties have
agreed that the terms reflected in the settlement agreement are mutually
satisfactory, and that they represent a fair and reasonable resolution of a bona fide
dispute. (Doc. 26, ¶ 3). Plaintiff is represented by counsel and her counsel
represents that Plaintiff fully understands the agreement, she has consulted with
counsel before agreeing to the settlement and has entered into it knowingly and
voluntarily with knowledge of the risks of the releases contained in the agreement.
(Doc. 26, ¶ 4).

II. STATEMENT OF THE LAW
The FLSA was enacted to protect employees from substandard wages and
excessive working hours; its provisions are mandatory and not subject to bargaining
!

2!

between employers and employees. Lynn's Food Stores v. United States Dept. of
Labor, 679 F.2d 1350, 1352 (11th Cir. 1982). An employee's claim for back wages
under the FLSA may be compromised in only two ways: (1) with payment in full of
back wages, supervised by the Secretary of Labor, with the employee giving up a
right to sue for unpaid wages and liquidated damages; or (2) by stipulated judgment
entered by a court in an FLSA action brought against the employer, entered after
the court has “scrutiniz[ed] the settlement for fairness.” Id. at 1352–53.
The Court may approve a settlement which presents a reasonable
compromise over issues that are actually in dispute with regard to pending FLSA
claims. Id. Additionally, the “FLSA requires judicial review of 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.” Silva v. Miller, 307 Fed. Appx. 349, 351 (11th Cir. 2009)
(unpublished opinion) (citing Lynn's Food Stores, 679 F.2d at 1352). Counsel for
Plaintiff must disclose the extent to which Plaintiff's FLSA claim has or will be
compromised by the deduction of attorneys' fees, costs or expenses pursuant to a
contract between a plaintiff and his counsel, or otherwise. See id. Furthermore, the
Court should be mindful of the strong presumption in favor of finding a settlement
fair. Cotton v. Hinton, 559 F.2d 1326, 1331 (5th Cir. 1977).

III. REVIEW OF THE PROPOSED SETTLEMENT
Lyons contends that the 96 shifts for which she claims her wages plus tips
failed to satisfy the minimum wage obligations result in approximately 533 hours
!

3!

for which she was underpaid. Lyons calculates that the back pay she claims for
those hours plus liquidated damages amount to $5,640.07. Lyons also claims she
was not sufficiently paid for 15.77 hours of overtime. Her calculation of lost
overtime plus an equal amount in liquidated damages totals $242.23.
The parties have agreed that the Defendants shall pay Lyons a total sum of
$3,000.00 in back pay and liquidated damages. (Doc. 26-1, p. 2). The parties have
further agreed that the defendants shall pay $1,000.00 in attorney’s fees. (Doc. 26-1,
p. 2). Additionally, the Defendants have agreed to pay Lyons $1,000.00 in
consideration for the Settlement and Release Agreement. (Doc. 26-1, p. 2). The
parties state that because of the risks, the Settlement Agreement, which was
reached after a lengthy arms length negotiation, provides for complete recovery of
unpaid back wages and represents a fair and reasonable compromise of Plaintiffs’
FLSA claims.
After review of the claims and the representations of the parties, the Court
finds that the proposed payment to Lyons appears to be a fair and reasonable
settlement of a bona fide dispute under the FLSA. However, the parties have not
provided any detail as to how the amount to be paid in attorney’s fees to counsel
was calculated or agreed upon.
Normally, the starting point in setting any attorney's fee is determining the
“lodestar” figure — that is, the product of the number of hours reasonably expended
to prosecute the lawsuit multiplied by a reasonable hourly rate for work performed
by similarly-situated attorneys in the community. Hensley v. Eckerhart, 461 U.S.
424, 433 (1983); see also, Norman v. Housing Authority of the City of Montgomery,
!

4!

836 F.2d 1292, 1299 (11th Cir. 1988). However, a lodestar analysis is not always
required. “[P]ersuasive district court authority has deemed scrutiny of the
reasonableness of plaintiff's agreed-upon attorney's fees to be unnecessary in an
FLSA settlement where ‘the plaintiff's attorneys' fee was agreed upon separately
and without regard to the amount paid to the plaintiff,’ except in circumstances
where ‘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.’ ” Crabtree v. Volkert, Inc., 2013 WL 593500, at *7 n. 4 (S.D.
Ala. Feb. 14, 2013) (quoting Bonetti v. Embarq Management Co., 715 F.Supp.2d
1222, 1228 (M.D. Fla. 2009); and citing also Wing v. Plann B Corp., 2012 WL
4746258, *4 (M.D. Fla. Sept. 17, 2012) (declining to examine reasonableness of
attorney's fee payment in FLSA settlement where the FLSA claims were
compromised, there was a reasonable basis for such compromise, and “Plaintiff's
claims were resolved separately and apart from the issue of attorneys' fees,” such
that “there is no reason to believe that Plaintiff's recovery was adversely affected by
the amount of fees and costs to be paid to Plaintiff's counsel”)).
In this case, the settlement appears reasonable on its face, but there has been
no representation by the parties that the fee was negotiated separately and without
regard to the amount paid to the Plaintiff. Because the parties’ joint motion neither
provides lodestar information, nor addresses whether Plaintiff's attorney’s fee was
agreed upon separately and without regard to the amount paid to Plaintiff, the
Court will require the parties to file an amended motion or affidavit addressing
attorney’s fees.
!

5!

V. CONCLUSION
For the reasons explained above, the parties are ordered to file on or before
September 30, 2015, an amended motion or affidavit addressing how the
attorney’s fee amount was calculated or agreed upon.
DONE and ORDERED this 23rd day of September, 2015.!
/s/ Callie V. S. Granade
UNITED STATES DISTRICT JUDGE

!

6!