Morgan et al v. El Dorado Home Care Services, LLC et al

Filing 123

ORDER granting 122 Motion for Order Granting Approval of FLSA Settlement ; ***Civil Case Dismissed with Prejudice. Signed by Honorable Susan O. Hickey on February 14, 2018. (cnn)

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
EL DORADO DIVISION
TRACI MORGAN, et al.

v.

PLAINTIFFS

Case No. 1:16-cv-1007

EL DORADO HOME CARE
SERVICES, LLC, et al.

DEFENDANTS
ORDER

Before the Court is the parties’ Second Renewed Joint Motion for Order Granting Approval
of FLSA Settlement. (ECF No. 122). The Court finds the matter ripe for consideration.
On February 1, 2016, Plaintiffs filed this suit, alleging that Defendants willfully violated
the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201 et seq., by failing to pay them overtime
compensation as required by the FLSA. On May 13, 2016, the Court entered an order granting
conditional collective-action certification related to Plaintiffs’ claims of unpaid overtime against
Defendant El Dorado Home Services, LLC, under section 216(b) of the FLSA, and approving the
notice to be sent to collective class members. Notice was sent to all putative collective-action
members and four people filed written consent notices to opt into this action. On September 28,
2016, Plaintiffs filed an amended collective-action complaint to include the additional opt-in
plaintiffs.
On November 21, 2017, the parties reached a tentative settlement, as captured in a proposed
Confidential Settlement Agreement (the “Agreement”). 1 Defendants believe that the Agreement
requires the Court’s approval because it involves FLSA claims. On December 22, 2017, the parties
filed a joint motion for approval of settlement, asking the Court to approve their Agreement and

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Due to the Agreement’s confidential nature, the parties filed the Agreement under seal. (ECF No. 122-1).

dismiss this case. On January 9, 2018, the Court denied the parties’ joint motion without prejudice
because the motion lacked certain necessary information for the Court to evaluate the proposed
settlement for fairness. On January 26, 2018, the Court denied the parties’ first renewed joint
motion without prejudice because the motion still lacked certain necessary information for the
Court to evaluate the proposed settlement for fairness. On February 8, 2018, the parties filed the
instant motion with additional information to address the concerns previously noted by the Court.
As noted by the Court in its January 9, 2018, order, “[b]efore approving an FLSA
settlement, the Court must ensure that the parties are not negotiating around the FLSA’s
requirements and that the settlement represents a fair and reasonable resolution of a bona fide
dispute.” Younger v. Ctrs. for Youth & Families, Inc., No. 4:16-cv-0170-KGB, 2017 WL 1652561,
at *1 (E.D. Ark. Apr. 27, 2017). The Court previously found that a bona fide dispute exists as to
whether Plaintiffs are entitled to overtime pay pursuant to the FLSA, and if so, the amount of
unpaid wages Plaintiffs are entitled to; as to whether Defendants willfully violated the FLSA; and
as to the number of and accuracy of hours purportedly worked by each Plaintiff.
The Court must now scrutinize the settlement for fairness. To do so, the Court will examine
the totality of the circumstances and will consider factors such as: (1) the stage of the litigation
and the amount of discovery exchanged; (2) the experience of counsel; (3) the probability of
success on the merits; (4) any “overreaching” by the employer in settlement negotiations; and (5)
whether the settlement was the product of arms-length negotiations between the parties based on
the merits of the case. See Jordan v. RHD, Jr., Inc., No. 2:16-cv-2227-PKH, 2017 WL 3499938,
at *1 (W.D. Ark. July 24, 2017).
As the Court discussed in its January 26, 2018, order, the Court has previously reviewed
the above-listed factors in relation to the joint motion and the Agreement, and found that, at this

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late stage in the litigation, the parties entered into a settlement that was the result of arms-length
negotiation and that featured no hallmarks of collusion or “overreaching” by Defendants. The
Court also found that the parties’ settlement is informed by extensive discovery and that the
settlement reflects the case’s merits and Plaintiffs’ likelihood of success at trial because Plaintiffs
would receive fair compensation under the settlement. The Court found further that the Plaintiffs
are receiving fair compensation under the settlement and that any disparities in settlement amounts
do not give rise to concern that any Plaintiff is recovering at the expense of the others.
Accordingly, all that remains is for the Court to scrutinize the fees and costs sought under the
Agreement for fairness.
In denying the parties’ first renewed motion for approval of settlement, the Court found
that it was unable to approve the settlement because it lacked sufficient information to evaluate
certain basic aspects of the settlement. In particular, the Court lacked information regarding
Plaintiffs’ counsel’s experience handling FLSA cases to determine whether Plaintiffs’ counsel’s
hourly rates are consistent with the rates of other FLSA attorneys with similar experience and
qualifications in the Western District of Arkansas. The Court also noted a lack of information
regarding the specific number of hours each of Plaintiffs’ attorneys worked on the case, such as an
itemized breakdown of each attorney’s specific tasks. The Court also lacked information regarding
the specific breakdown of costs incurred by Plaintiff’s counsel in litigating this case.
In support of the instant motion, Plaintiffs submitted multiple exhibits for in camera
review, including affidavits and itemized billing statements regarding the attorneys’ fees and costs
provided by the Agreement. The affidavits and billing statements reveal that a reasonable rate is
requested for a reasonable number of hours, and in light of the fact that the requested fees and
costs are less than Plaintiffs might be entitled to under a lodestar determination, the Court finds

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that the requested fees and costs are reasonable. Furthermore, the Court finds that the fees and
costs will not be recovered at the expense of the Plaintiffs’ wage claims. Therefore, the Court
finds that the fees and costs provided for under the Agreement are fair and reasonable, which
weighs in favor of a determination that the parties’ proposed settlement should be approved.
For the reasons discussed above, the Court finds that the parties’ proposed settlement
should be approved in its entirety as fair and reasonable. Accordingly, the parties’ Second
Renewed Joint Motion for Order Granting Approval of FLSA Settlement (ECF No. 122) is hereby
GRANTED. The parties’ confidential settlement is approved and Plaintiffs’ claims against
Defendants are hereby DISMISSED WITH PREJUDICE. The Court shall retain jurisdiction
over the terms of the settlement agreement.
IT IS SO ORDERED, this 14th day of February, 2018.
/s/ Susan O. Hickey
Susan O. Hickey
United States District Judge

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