Thompson v. Spa City Steaks, Inc.

Filing 81

ORDER granting 80 Joint Motion to Dismiss. Court finds that the parties' proposed settlement agreement should be approved in its entirety as fair and reasonable. Plaintiffs' claims against Defendant are hereby DISMISSED WITH PREJUDICE. Signed by Honorable Susan O. Hickey on October 31, 2019. (mjm)

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
HOT SPRINGS DIVISION
CHEVON THOMPSON,
Individually and Behalf of all Others
Similarly Situated
v.

PLAINTIFF
Case No. 6:17-cv-6055

SPA CITY STEAKS, INC. d/b/a
COLTON’S STEAKHOUSE AND GRILL

DEFENDANT
ORDER

Before the Court is the parties’ Joint Motion to Dismiss with Prejudice and For Approval
of Settlement Agreement. (ECF No. 80). The Court finds the matter ripe for consideration. For
the reasons discussed below, the Court finds that the instant motion should be granted.
On June 30, 2017, Plaintiff Chevon Thompson filed this suit individually and behalf of all
others similarly situated, alleging that Defendant willfully violated the Fair Labor Standards Act
(“FLSA”), 29 U.S.C. § 201 et seq., and the Arkansas Minimum Wage Act (AMWA), Ark. Code
Ann. §11-4-201, et seq., by failing to pay her minimum wage and overtime compensation as
required by the FLSA and AMWA. On November 17, 2017, the Court entered an order granting
conditional collective-action certification related to Plaintiff’s claims of unpaid minimum wage
and overtime against Defendant, under section 216(b) of the FLSA, and approving notice to be
sent to putative collective-action members. Notice was sent to all putative collective-action
members and seventeen individuals filed written consent notices to opt into this action. 1
On October 22, 2019, the parties reached a settlement, as captured in a proposed Settlement

For convenience, the Court collectively refers to the named Plaintiff Chevon Thompson and the opt-in collective
action members as “Plaintiffs.”
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Agreement and Release of Claims attached to the instant motion. (ECF No. 80-1). The parties
believe that the settlement agreement requires the Court’s approval because it involves FLSA
claims. Accordingly, the parties filed the instant motion, asking the Court to approve their
settlement and dismiss this case.
The parties’ settlement agreement proposes to resolve the FLSA claims of a conditionally
certified collective action. The Court notes that “[t]he law is unclear in the Eighth Circuit as to
whether judicial approval of a proposed private release of FLSA claims is in all cases required
before dismissal.” Jordan v. RHD, Jr., Inc., No. 2:16-cv-2227-PKH, 2017 WL 3499938, at *1
(W.D. Ark. July 24, 2017); see also Stainbrook v. Minn. Dep’t of Pub. Safety, 239 F. Supp. 3d
1123, 1127 (D. Minn. 2017) (questioning whether judicial approval of a proposed FLSA settlement
is necessary in the absence of a final certified collective action). However, wage claims under the
FLSA can only be waived in two ways: (1) the Secretary of Labor is authorized to supervise
payment to employees of unpaid wages owed to them; and (2) when, as in this case, an employee
brings a private action for back wages under the FLSA, a court may enter a stipulated judgment
after scrutinizing the settlement for fairness. 2 29 U.S.C. § 216(c); Beauford v. ActionLink, LLC,
781 F.3d 396, 405 (8th Cir. 2015); see also Cruthis v. Vision’s, No. 4:12-cv-0244-KGB, 2014 WL
4092325, at *1 (E.D. Ark. Aug. 19, 2014) (“Settlement agreements resolving FLSA claims
typically are subject to court approval.”).
“Before 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.

The Court notes that the parties do not propose a stipulated judgment. However, this is not fatal to the instant motion
because “the requirement of a stipulated judgment may be satisfied by an unopposed filing that allows the Court to
take an active role in approving the settlement agreement between the parties, and the instant joint motion to dismiss
is sufficient.” Melgar v. OK Foods, No. 2:13-cv-2169-PKH, 2017 WL 758296, at *1 (W.D. Ark. Feb. 27, 2017).

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4:16-cv-0170-KGB, 2017 WL 1652561, at *1 (E.D. Ark. Apr. 27, 2017). A review of the
pleadings in this case shows that a bona fide dispute exists as to whether Plaintiffs were entitled to
minimum wage and overtime pay pursuant to the FLSA, and if so, the amount of unpaid wages
Plaintiffs are entitled to; as to whether Defendant willfully violated the FLSA; and as to the number
of and accuracy of hours purportedly worked by each Plaintiff. Because a bona fide dispute exists,
the Court must now scrutinize the settlement for fairness. 3
It does not appear that the Eighth Circuit has directly addressed the factors for use in
deciding whether to approve FLSA settlements. Id. As a result, Arkansas federal courts have
utilized at least two different standards for scrutinizing FLSA settlements. Compare id. (approving
FLSA settlement after considering whether the settlement is fair and reasonable to the employee
and whether the settlement otherwise impermissibly frustrates implementation of the FLSA), with
Jordan, 2017 WL 3499938, at *1 (approving FLSA settlement after considering the totality of the
circumstances, including several express factors). Although the analysis under these different
approaches likely contains some overlap, in the absence of a binding standard for scrutinizing
FLSA settlements, the Court joins with other courts in the Western District of Arkansas by utilizing
a totality-of-the-circumstances approach. In doing so, the Court will determine whether the
parties’ settlement is fair and reasonable under the FLSA by scrutinizing the totality of the
circumstances, considering 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.

In so doing, the Court will not review the parties’ settled attorneys’ fees because the “[statutory] authority for judicial
approval of FLSA settlements . . . does not extend to review of settled attorney fees.” Barbee v. Big River Steel, LLC,
927 F.3d 1024, 1027 (8th Cir. 2019).

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See Jordan, 2017 WL 3499938, at *1.
The parties’ settlement agreement sets out the amount due to each Plaintiff for unpaid
wages. The parties have also agreed on the amount of attorneys’ fees and costs that Defendant
will pay Plaintiffs’ counsel under the settlement. The parties have further agreed that Plaintiffs
will voluntarily waive all claims for compensation against Defendant, including FLSA claims.
In reviewing the above-listed factors in relation to the joint motion and the settlement
agreement, the Court finds that, at this late stage in the litigation, the parties have engaged in
extensive document and deposition discovery. The parties have also engaged in several discovery
disputes. Thus, the Court is satisfied that the parties’ settlement is informed by substantive
discovery.
The parties represent that the amount to be paid to each Plaintiff under the settlement is
reasonable given the inherent risks, costs, and uncertainties of further litigation and the likelihood
of an appeal. Upon review of the instant motion and its accompanying exhibit, the Court is
satisfied that Plaintiffs are receiving fair compensation under the settlement agreement and that
any disparities in settlement amounts do not give rise to concern that any Plaintiff is recovering at
the expense of the others. The Court is likewise convinced that the settlement reflects the case’s
merits and Plaintiffs’ likelihood of success at trial.
The Court is also satisfied that the settlement is the result of arms-length negotiation
between the parties. The parties participated in multiple settlement conferences with United States
Magistrate Judge Barry A. Bryant and subsequently continued to engage in informal settlement
discussions with Judge Bryant’s assistance. The parties represent that these settlement discussions
led to the parties reaching a settlement. Accordingly, the Court finds that the parties’ settlement

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contains no hallmarks of collusion and that there was no “overreaching” by Defendant during the
negotiations.
For the reasons discussed above, the Court finds that the parties’ proposed settlement
agreement should be approved in its entirety as fair and reasonable. Accordingly, the parties’ Joint
Motion to Dismiss with Prejudice and For Approval of Settlement Agreement (ECF No. 80) should
be and hereby is GRANTED. 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, this 31st day of October, 2019.
/s/ Susan O. Hickey
Susan O. Hickey
Chief United States District Judge

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