Smith v. Cable Wiring Specialist, Inc.

Filing 35

REPORT AND RECOMMENDATION recommending 34 Corrected Joint Motion for Approval of Settlement & Joint Stipulation of Dismissal With Prejudice be granted. Signed by Magistrate Judge Douglas N. Frazier on 1/28/2015. (brh)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
AARON SMITH, individually & on behalf
of similarly situated
Plaintiff,
v.

Case No: 2:14-cv-277-FtM-29DNF

CABLE WIRING SPECIALIST, INC.,
Defendant.
REPORT AND RECOMMENDATION
TO THE UNITED STATES DISTRICT COURT
This cause is before the Court on the parties’ Corrected Joint Motion for Approval of
Settlement & Joint Stipulation of Dismissal With Prejudice (Doc. 34) filed on January 23, 2015.
The parties did not enter into a written settlement agreement. (Doc. 34, p. 4). The Plaintiff, Aaron
Smith and Opt-In Plaintiffs, Janio Silva, Majer Rahim, William James Smith, Jr., Julio A. Alfonso
and Lienz Polycape (collectively “Plaintiffs”) and the Defendant, Cable Wiring Specialist, Inc.
are requesting that the Court approve the parties’ settlement of the Fair Labor Standards Act
(“FLSA”) claim.
To approve the settlement, the Court must determine whether the settlement is a “fair and
reasonable resolution of a bona fide dispute” of the claims raised pursuant to the Fair Labor
Standards Act (“FLSA”). Lynn’s Food Store, Inc. v. United States, 679 F.2d 1350, 1355 (11th
Cir. 1982), and 29 U.S.C. §216. There are two ways for a claim under the FLSA to be settled or
compromised. Id. at 1352-3. The first is under 29 U.S.C. §216(c), providing for the Secretary
of Labor to supervise the payments of unpaid wages owed to employees. Id. at 1353. The
second is under 29 U.S.C. §216(b) when an action is brought by employees against their

employer to recover back wages. Id. When the employees file suit, the proposed settlement
must be presented to the district court for the district court review and determination that the
settlement is fair and reasonable. Id. at 1353-54.
The Eleventh Circuit found settlements to be permissible when the lawsuit is brought by
employees under the FLSA for back wages because the lawsuit
provides some assurance of an adversarial context. The employees are
likely to be represented by an attorney who can protect their rights under
the statute. Thus, when the parties submit a settlement to the court for
approval, the settlement is more likely to reflect a reasonable
compromise of disputed issues than a mere waiver of statutory rights
brought about by an employer’s overreaching. If a settlement in an
employee FLSA suit does reflect a reasonable compromise over issues,
such as FLSA coverage or computation of back wages, that are actually
in dispute; we allow the district court to approve the settlement in order
to promote the policy of encouraging settlement of litigation.

Id. at 1354.
The Plaintiffs assert that they worked for the Defendant and did not receive full
compensation for the hours worked. There are bona fide disputes as to whether any additional
compensation is warranted, and if so, the amount of compensation. The Plaintiff did file a Motion
to Certify Class (Doc. 19) which was granted in part by the Opinion and Order (Doc. 22) entered
on September 25, 2014. The Plaintiffs and the Defendant have reached a settlement. The terms
of the settlement as to damages are as follows:
Plaintiff

Back Wages

Liquidated Damages Total

Aaron Smith

$4,900.00

$4,900.00

$9,800.00

Janio Silva

$4,900.00

$4,900.00

$9,800.00

Majer Rahim

$105.00

$105.00

$210.00

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William James Smith, $140.00

$140.00

$280.00

Jr.
Julio A. Alfonso

$210.00

$210.00

$420.00

Lienz Polycape

$35.00

$35.00

$70.00

The Court determines that the terms of the settlement are reasonable as to back wages and
liquidated damages.
The Defendant agrees to pay $35,000.00 in attorney fees and costs. The amount of
attorneys’ fees was negotiated separately from the Plaintiffs’ recovery and did not affect the
amount of Plaintiffs’ recovery. Pursuant to Bonetti v. Embarq Management Company, 715 F.
Supp.2d 1222, 1228 (M.D. Fla. 2009), “the best way to insure that no conflict [of interest between
an attorney’s economic interests and those of his client] has tainted the settlement is for the parties
to reach agreement as to the plaintiff’s recovery before the fees of the plaintiff’s counsel are
considered. If these matters are addressed independently and seriatim, there is no reason to
assume that the lawyer’s fee has influenced the reasonableness of the plaintiff’s settlement.”
Judge Presnell concluded that
In sum, if the parties submit a proposed FLSA settlement that, (1)
constitutes a compromise of the plaintiff's claims; (2) makes full and
adequate disclosure of the terms of settlement, including the factors and
reasons considered in reaching same and justifying the compromise of
the plaintiff's claims; and (3) represents that the plaintiff's attorneys’ fee
was agreed upon separately and without regard to the amount paid to the
plaintiff, then, unless 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, the Court
will approve the settlement without separately considering the
reasonableness of the fee to be paid to plaintiff's counsel.

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Id. In the instant case, the settlement was reached, and the attorneys’ fees were agreed upon
separately and without regard to the amount paid to the Plaintiffs. The amount of attorneys’ fees
and costs appear reasonable on their face.
IT IS RESPECTFULLY RECOMMEDED:
1) That the Corrected Joint Motion for Approval of Settlement & Joint Stipulation of
Dismissal With Prejudice (Doc.34) be GRANTED and settlement be approved by the
Court as a “fair and reasonable resolution of a bona fide dispute” of the FLSA issues.
2) The Court further recommends that if the District Court adopts this Report and
Recommendation, that the Clerk be directed to dismiss this action with prejudice,
terminate all pending motions, and close the file.

Failure to file written objections to the proposed findings and recommendations contained
in this report within fourteen (14) days from the date of its filing shall bar an aggrieved party from
attacking the factual findings on appeal.
Respectfully recommended in Chambers in Ft. Myers, Florida on January 28, 2015.

Copies furnished to:
Counsel of Record
Unrepresented Parties

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