-MEH Whittington v. Yum! Brands, Inc. et al

Filing 205

ORDER. The Joint Motion for Approval of Collective Action Settlement 202 is held in abeyance. The parties are ORDERED, on or before September 3, 2013, to file a joint supplement, by Magistrate Judge Kathleen M. Tafoya on 8/20/13.(sgrim)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Magistrate Judge Kathleen M. Tafoya
Civil Action No. 10–cv–01884–KMT–MEH

JAQUELYN ANN WHITTINGTON, individually and on behalf of all other persons similarly
situated,
Plaintiff,
v.
TACO BELL OF AMERICA, INC., and
TACO BELL CORP.,
Defendants.

ORDER

This matter is before the court on the “Joint Motion for Approval of Collective Action
Settlement” [Doc. No. 202] filed August 12, 2013.
Plaintiff has asserted claims under the Fair Labor Standards Act, 29 U.S.C. §§ 201, et
seq. (“FLSA”) and the Colorado Minimum Wage Order set forth at 7 CCR § 1103-1, arising out
of an alleged failure of Defendants to appropriately compensate Assistant General Managers
(“AGMs”) working at company owned Taco Bell stores for all hours worked per workweek.
The claims were asserted as a collective action pursuant to 29 U.S.C. § 216(b) on behalf of
Plaintiff and other current and former employees who worked for Defendants as AGMs.

On September 16, 2011, Named Plaintiff Whittington filed a Motion for Conditional
Certification [Doc. Nos. 61 and 62], seeking conditional certification of a nationwide (except for
California) collective of individuals who had been employed by Defendants as exempt
employees in the position of AGM within the prior three years. On January 10, 2012, the Court
granted Plaintiff’s Motion for Conditional Certification. [Doc. No. 85.] The Court conditionally
certified a collective of all persons who are or were formerly employed as Assistant General
Managers at a company-owned Taco Bell restaurant(s) in any state other than California at any
time since January 10, 2009. As of the date of the filing of the instant joint motion, 475
individuals have filed consents to join the case as Opt-Ins asserting FLSA claims against
Defendants.
The parties have advised the court that, utilizing the services of a professional mediator,
they have reached a settlement in their case. When employees file suit against their employer to
recover back wages under the FLSA, the parties must present any proposed settlement to the
district court for review and a determination whether the settlement is fair and reasonable. See
Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350, 1353 (11th Cir.1982). This is the
object of the instant motion.
To approve an FLSA settlement, the Court must find that the litigation involves a bona
fide dispute and that the proposed settlement is fair and equitable to all parties concerned. See id
.at 1354. The Court may enter a stipulated judgment only after scrutinizing the settlement for
fairness. Peterson v. Mortgage Sources, Corp., 2011 WL 3793963, *4 (D. Kan. August 25,
2011); Baker v. D.A.R.A. II, Inc., No. CV–06–2887–PHX–LOA, 2008 WL 4368913, at *2 (D.
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Ariz. Sept.24, 2008). Further, when a plaintiff has voluntarily assumed the fiduciary role of
class representative, the Court must determine “whether the settling plaintiff has used the class
action claim for unfair personal aggrandizement in the settlement, with prejudice to absent
putative class members.” Shelton v. Pargo, Inc., 582 F.2d 1298, 1314 (4th Cir.1978).
The case law, almost without exception, also provides that, “[w]here parties settle FLSA
claims before the Court has made a final collective action ruling, the Court must make some final
class certification finding before it can approve a collective action settlement.” Peterson, id. See
also Grayson v. K Mart Corp, 79 F.3d 1086, 1096 (11th Cir. 1996); Burkholder v. City of Fort
Wayne, 750 F. Supp. 2d 990, 993 (N. D. Ind. 2010); Murillo v. Pac. Gas & Elec. Co., No. CIV.
2:08–1974 WBS GGH, 2010 WL 2889728, *2 (E. D. Cal. July 21, 2010). But see Hobbs v.
Tandem Environmental Solutions, Inc., 2012 WL 4747166, *1 (D. Kan. Oct. 4, 2012)(After the
Court overruled parties’ first motion for settlement approval, plaintiffs withdrew their request for
collective action certification, and the court approved the settlement agreement for the named
plaintiffs only). In order to make a final collective action ruling, the court must make findings
concerning whether the conditional collective Opt-Ins are “similarly situated,” considering “(1)
the disparate factual and employment settings of individual plaintiffs; (2) various defenses
available to defendant which appear to be individual to each plaintiff; and (3) fairness and
procedural considerations.” Peterson at *4 (citing Thiessen v. GE Capital Corp., 267 F.3d 1095,
1103 (10th Cir.2001).
The parties here have not specifically requested the court to make “some class
certification finding.” Id. The parties do, however, refer to the settlement as a “collective action
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settlement” and seek to send notice to all Opt-Ins. (See Doc. No. 204-1, executed “Collective
Action Settlement Agreement,” ¶ 4(c).) Further, they define the “settlement collective” as “(a)
the Named Plaintiff and (b) the Opt-ins who filed a written consent to join the Action as
members of the collective conditionally certified by the Court on January 10, 2012.” (Id. at 5.)
By the same token, however, the proposed settlement agreement specifically provides
8. This Settlement Agreement is contingent upon the approval of the Court and
the satisfaction of the other terms set forth in this Agreement. Defendants do not
waive, and instead expressly reserve, their rights to move for decertification of
the conditionally-certified collective, or to challenge the propriety of final
certification for any purpose, should the Court not approve this Settlement
Agreement and not enter an Approval Order.
(Id. at ¶ 8 (emphasis added).) See also id at ¶ 3(a) (“The Parties agree that in not challenging,
disturbing, or otherwise seeking modification or decertification of the Settlement Collective, the
Defendants are not in any way admitting that class or collective certification is proper in this, or
any other wage and hour litigation against Defendants.”)
Further the parties have not provided information about the 475 Opt-Ins sufficient for the
court to determine whether the collective is made up of individuals who are “similarly situated,”
even if such a collective were only to be certified as a ‘settlement’ collective.
Therefore, it is ORDERED
The “Joint Motion for Approval of Collective Action Settlement” [Doc. No. 202] is held
in abeyance.
The parties are ORDERED, on or before September 3, 2013, to file a joint supplement
to the “Joint Motion for Approval of Collective Action Settlement” addressing the requirement

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for the court to make a final class certification ruling, the standard under which such a class
certification must be made, whether a form of “settlement class” is sufficient under current law
in this circuit The parties are further ORDERED to provide, as part of their joint supplement, a
sufficient factual basis upon which the court could make any such required certification.
Dated this 20th day of August, 2013.

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