Campbell v. Gulf Care, Inc.

Filing 31

REPORT AND RECOMMENDATIONS re 26 Amended Joint Motion for Approval of an FLSA Settlement Agreement and for Dismissal with Prejudice and 30 Notice of Compliance. Signed by Magistrate Judge Carol Mirando on 10/12/2016. (HJ)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
SHENETA CAMPBELL, on behalf of
herself and others similarly situated
Plaintiff,
v.

Case No: 2:15-cv-525-FtM-99CM

GULF CARE, INC.,
Defendant.
REPORT AND RECOMMENDATION 1
This matter comes before the Court upon review of the Amended Joint Motion
for Approval of an FLSA Settlement Agreement and for Dismissal with Prejudice
(Doc. 26) filed on June 2, 2016 and a Notice of Compliance (Doc. 30) filed on
September 19, 2016.

The parties have provided a copy of the second amended

Settlement Agreement for the Court’s review. Doc. 30-1. The parties state that the
second amended agreement (Doc. 30-1) complies with the Court’s Order (Doc. 27).
Doc. 30 at 1.
On January 26, 2016, the parties filed the Joint Motion for Approval of a FLSA
Settlement Agreement and for Dismissal with Prejudice.

Doc. 24.

The Court

A party has fourteen days from this date to file written objections to the Report and
Recommendation’s factual findings and legal conclusions. A party’s failure to file written
objections waives that party’s right to challenge on appeal any unobjected-to factual finding
or legal conclusion the district judge adopts from the Report and Recommendation. See 11th
Cir. R. 3-1. In order to expedite a final disposition of this matter, if the parties have no
objection to this Report and Recommendation, they promptly may file a joint notice of no
objection.
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denied without prejudice the parties’ first Settlement Agreement (Doc. 24-1) because
it included a general release of claims, a confidentiality provision, and a request for
the Court’s retention of jurisdiction, which may render the agreement unfair. Doc.
25 at 4.
On June 2, 2016, the parties filed an Amended Joint Motion for Approval of
FLSA Settlement Agreement and for Dismissal with Prejudice.

Doc. 26.

The

parties removed confidentiality and jurisdiction provisions from the first amended
Settlement Agreement. Doc. 26-1. The agreement, however, did not specify what,
if any, independent consideration Plaintiff received for the general release provision.
Furthermore, contrary to the parties’ assertion in the motion that “in addition to
monetary consideration, in exchange for Plaintiff’s general release of claims,
Defendant is also providing Plaintiff with a general release,” the amended Settlement
Agreement contained no such reciprocal general release. Doc. 26 at 3; Doc. 27 at 2;
Doc. 26-1. As a result, the Court ordered the parties to supplement their amended
motion (Doc. 26) with a reciprocal general release signed by Defendant. Doc. 27.
On September 19, 2016, the parties filed the second amended Settlement Agreement
(Doc. 30-1), alleging that the agreement now contains general release provisions
applicable to both Plaintiff and Defendant. Doc. 30 at 1.
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 FLSA. Lynn’s Food Store, Inc. v. United States, 679 F.2d 1350, 1355
(11th Cir. 1982). There are two ways for a claim under the FLSA to be settled or

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compromised. Id. at 1352-53. 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’s 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.
In this case, Plaintiff worked for Defendant as a Certified Nurse’s Assistant.
Doc. 24 at 2. She was employed by Defendant from approximately October 4, 2008
through July 30, 2015. Doc. 1 at 3. Plaintiff’s Complaint alleges that “Defendant
failed to compensate her at a rate of one and one-half times Plaintiff’s regular rate
for all hours worked in excess of forty (40) hours in a single work week.”

Id.

Plaintiff originally calculated the amount owed to her as $1,277.65 for unpaid

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overtime plus liquidated damages and attorney’s fees and costs. Doc. 19-1 at 1. As
a reasonable compromise of the disputed issues, Defendant has agreed to pay Plaintiff
$500.00 in consideration of her underlying claims as well as consideration for a
general release.

Doc. 26 at 3.

Defendant also has agreed to pay $2,000.00 in

attorney’s fees and costs. Id. at 4-5.
Plaintiff agreed to accept less than the amount originally claimed because
“Plaintiff’s calculations included errors that artificially inflated the amount of
overtime wages she believed were owed to her.” Id. at 4. Additionally, the parties
seek to avoid the given risks, uncertainties and expense of further litigation. Id.
Based on the parties’ representations and the policy in this circuit of promoting
settlement of litigation, the Court finds the proposed settlement to be a fair and
reasonable compromise of the dispute. Other courts in this district similarly have
approved settlements for a compromised amount in light of the strength of the
defenses, the complexity of the case, and the expense and length of continued
litigation. See e.g., Diaz v. Mattress One, Inc., No. 6:10–cv–1302–Orl–22DAB, 2011
WL 3167248 (M.D. Fla. July 15, 2011); see also Dorismond v. Wyndham Vacation

Ownership, Inc., No. 6:14–cv–63–Orl–28GJK, 2014 WL 2861483 (M.D. Fla. June 24,
2014).
As part of the settlement, the Defendant agrees to pay Plaintiff’s attorney’s
fees and costs in the amount of $2,000.00. Doc. 26 at 4. The parties assert that the
amount of attorneys’ fees was negotiated separately from Plaintiff’s recovery and did
not affect Plaintiff’s recovery. Id. at 4. The “FLSA requires judicial review of the

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reasonableness of counsel’s legal fees to assure both that counsel is compensated
adequately and that no conflict of interest taints the amount the wronged employee
recovers under a settlement agreement.” Silva v. Miller, 307 F. App’x 349, 351 (11th
Cir. 2009). Pursuant to Bonetti v. Embarq Mgmt. Co., 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.
In the instant case, the settlement was reached and the attorneys’ fees and costs were
agreed upon separately and without regard to the amount paid to the Plaintiffs. Doc.
26 at 4.
The last remaining issue with the second amended agreement is Plaintiff’s
general release provision. Doc. 27; Doc. 30-1. The courts have approved general
releases in FLSA cases when the plaintiff receives compensation that is separate and
apart from the benefits to which plaintiff is entitled under the FLSA. Weldon v.

Backwoods Steakhouse, Inc., No. 6:14–cv–79–Orl–37TBS, 2014 WL 4385593, at *4
(M.D. Fla. Sept. 4, 2014); Buntin v. Square Foot Mgmt. Co., LLC, No. 6:14–cv–1394–
Orl–37GJK, 2015 WL 3407866, at *2 (M.D. Fla. May 27, 2015); Raynon v. RHA/Fern

Park MR., Inc., No. 6:14–cv–1112–Orl–37TBS, 2014 WL 5454395, at *3 (M.D. Fla.
Oct. 27, 2014). As noted above, the first amended agreement (Doc. 26-1) did not
specify what, if any, independent consideration Plaintiff received for her general

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release provision. Doc. 27. The parties address this issue in the second amended
agreement by including a general release provision signed by Defendant, which the
Court finds is sufficient independent consideration for Plaintiff’s general release.
Doc. 30; Doc. 30-1 at 3-4; see Buntin, 2015 WL 3407866, at *3 (approving a settlement
agreement with a general release because it was supported by a mutual general
release and a specific neutral reference by defendant). Thus, having reviewed the
settlement agreement (Doc. 30-1), the Court finds that the proposed terms of the
settlement to be a fair and reasonable compromise of the dispute.
ACCORDINGLY, it is hereby
RECOMMENDED:
1.

The Amended Joint Motion for Approval of an FLSA Settlement

Agreement and for Dismissal with Prejudice (Doc. 26) is GRANTED and the
Settlement Agreement (Doc. 30-1) be APPROVED by the Court as a fair and
reasonable resolution of a bona fide dispute under the FLSA.
2.

The Court enter an order DISMISSING with prejudice all claims

asserted in this action by Plaintiff.
DONE and ENTERED in Fort Myers, Florida on this 12th day of October,
2016.

Copies:
Counsel of record

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