Withrow et al v. Texarkana Behavioral Associates, L.C. et al
OPINION AND ORDER granting 46 Joint Motion for Approval of Settlement Agreement and to Dismiss. See Order for specifics, case is DISMISSED WITH PREJUDICE. Signed by Honorable Timothy L. Brooks on February 16, 2021. (tg)
IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
STEPHANIE WITHROW, KATHERINE YOUNTS
and CONNIE MEADORS, each individually and
on behalf of all others similarly situated
CASE NO. 5:19-CV-05220
TEXARKANA BEHAVIORAL ASSOCIATES, L.C.,
and ACADIA HEALTHCARE COMPANY, INC.
OPINION AND ORDER
The parties in this case have filed a Joint Motion for Approval of Settlement
Agreement and to Dismiss (Doc. 46). The proposed settlement of all claims would split
$5,125.94 among the twenty-seven Plaintiffs and provide Plaintiffs’ attorneys with a fee
of $20,000. For the reasons below, the Court GRANTS the Joint Motion for Approval of
Settlement Agreement and to Dismiss (Doc. 46).
This action was initiated by Stephanie Withrow, Katherine Younts, and Connie
Meadors, each of whom were nurses for Defendants Texarkana Behavioral Associates,
L.C., and Acadia Healthcare Company, Inc. (collectively, “Defendants”). These Plaintiffs
alleged, on behalf of themselves and others similarly situated, that they were employees
covered by the Fair Labor Standards Act (“FLSA”) and that Defendants failed to pay them
a proper overtime premium for the hours they worked in excess of forty hours in a week. 1
The Court conditionally certified an FLSA class, see Doc. 24, and twenty-four other
individuals opted into the collective action. Now, a little over a year after the case
Plaintiffs also brought individual claims for overtime violations under the Arkansas
Minimum Wage Act (“AMWA”).
commenced, the parties have filed their Joint Motion for Approval of Settlement
Agreement and to Dismiss.
Before a court approves an FLSA settlement agreement, it must determine that
“the litigation involves a bona fide dispute and that the proposed settlement is fair and
equitable to all parties.” Boland v. Baue Funeral Home Co., 2015 WL 7300507, at *2 (E.D.
Mo. Nov. 18, 2015) (citations omitted). “A settlement is bona fide if it reflects a reasonable
compromise over issues actually in dispute, since employees may not waive their
entitlement to minimum wage and overtime pay under [the] FLSA.” King v. Raineri
Constr., LLC, 2015 WL 631253, at *2 (E.D. Mo. Feb. 12, 2015) (citing D.A. Schulte, Inc.
v. Gangi, 328 U.S. 108, 115 (1946)). If the court determines that there is a bona fide
dispute, it must next determine that the agreement purporting to settle that dispute is fair
and reasonable to all parties. Such a determination usually involves considering:
the stage of the litigation and amount of discovery exchanged, the
experience of counsel, the probability of plaintiffs’ success on the merits,
any ‘overreaching’ by the employer in the settlement negotiations, and
whether the settlement was the product of arm’s length negotiations
between represented parties based on the merits of the case.
Id. (citing Carrillo v. Dandan Inc., 51 F. Supp. 3d 124, 132–33 (D.D.C. 2014)).
The Court is persuaded that a bona fide dispute exists in this case. The parties
disagreed as to whether certain bonuses provided to Plaintiffs were discretionary bonuses
or if those bonuses constituted regular wages that should have been considered when
calculating overtime premiums.
Thus, the parties fundamentally disagreed on the
question of whether Plaintiffs were paid the correct amount of overtime wages. The
parties also disagreed on whether Defendants were “joint employers” under the FLSA
and the AMWA.
The Court is also satisfied that the settlement is fair and reasonable. Both sides
were represented by counsel. Further, each Plaintiff is receiving “the full, uncompromised
amount of their calculated overtime owed, including an equal amount as liquidated
damages.” (Doc. 46, p. 4). Plaintiffs with less than $50 in calculated damages receive a
minimum payment of $100. Id. Furthermore, the parties represent that they exchanged
time and payroll records and reached a settlement based the merits of the claims and
defenses and the costs associated with continuing this litigation. Based upon these
representations, the Court is persuaded that the settlement agreement is the result of an
arm’s length negotiation.
Moreover, the proposed settlement amounts represent a
reasonable recovery for each Plaintiff after balancing the expense and uncertainty of
proceeding with this action against each Plaintiff’s estimated damages.
The Court next turns to the question of Plaintiffs’ requested attorneys’ fees. When
a judgment is awarded to a plaintiff in an FLSA action, the defendant is also liable for the
plaintiff’s reasonable attorneys’ fees and litigation costs. See 29 U.S.C. § 216(b). Here,
Plaintiffs request $20,000 in attorneys’ fees. Defendants do not oppose the request. At
face value, the requested attorneys’ fees appear unreasonable: Plaintiffs’ pleadings are
formulaic, Plaintiffs’ counsel appeared only once in person (at the Rule 16 case
management hearing), and there were no contested motions. Indeed, of the twentyseven Plaintiffs, sixteen are only receiving $100, which means only eleven Plaintiffs had
actual damages exceeding $50. Still, in Barbee v. Big River Steel, LLC, 927 F.3d 1024
(8th Cir. 2019), the Eighth Circuit held that district courts have no authority under the
FLSA to review settled attorneys’ fees so long as the parties negotiated those fees
separately from settlement of the merits. The parties do indeed represent that they
finalized settlement of the merits before discussing attorneys’ fees and that there was no
simultaneous negotiation of damages and attorneys’ fees. See Doc. 46, p. 6. Thus,
constrained by precedent and the fact that Defendants do not oppose the requested
attorneys’ fee, the Court cannot gainsay the parties’ agreement on’ fees.
For the reasons stated above, the Court finds that the parties’ proposed settlement
agreement should be approved as fair and reasonable. The parties’ Joint Motion for
Approval of Settlement Agreement and to Dismiss (Doc. 46) is hereby GRANTED.
Defendants shall be liable for $5,125.94 in damages and $20,000 in attorneys’ fees.
Plaintiffs’ claims against Defendant are hereby DISMISSED WITH PREJUDICE. The
Court shall retain jurisdiction over the terms of the settlement agreement.
IT IS SO ORDERED on this 16th day of February, 2021.
TIMOTHY L. BROOKS
UNITED STATES DISTRICT JUDGE
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