Dominique v. Capreit, Inc.
Filing
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ORDER granting 54 Unopposed Motion for Entry of Preliminary Approval Order. A Fairness Hearing will be set by separate notice on Tuesday, February 9, 2021 at 10:00 a.m. This action and all deadlines are stayed to carry out the terms and conditions of the Amended Settlement Agreement and Preliminary Approval Order. See Order for further details. Signed by Magistrate Judge Nicholas P. Mizell on 11/10/2020. (brh)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
STUART FRITZ DOMINIQUE,
Plaintiff,
v.
Case No. 2:18-cv-231-FtM-NPM
CAPREIT, INC.
Defendant.
PRELIMINARY APPROVAL ORDER
Before the Court is Plaintiff’s Unopposed Motion for Entry of Preliminary
Approval Order (Doc. 54). The parties consented to proceed before the undersigned
for all proceedings. (Doc. 53). Plaintiff Stuart Dominique filed this unpaid wage and
overtime claim under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et
seq., on behalf of himself and similarly situated individuals. (Doc. 18). Plaintiff
seeks: (1) conditional certification of a collective action comprised of similarly
situated employees; (2) preliminary approval of the Amended Settlement
Agreement; (3) approval of the notice to be sent to putative collective action
members; and (4) approval of additional settlement procedures. (Doc. 54). Plaintiff
represents Defendant Carpreit, Inc. does not oppose the relief requested. (Id., p. 18).
For the reasons discussed below, the motion is granted.
BACKGROUND
A brief procedural history is instructive. On March 9, 2018, Plaintiff filed this
action and on June 29, 2018, Plaintiff filed an Amended Collective Action
Complaint. (Doc. 1; Doc. 18). In the Amended Collective Action Complaint,
Plaintiff alleges that he and similarly situated individuals worked for Defendant and
were not properly paid overtime compensation. (Doc. 18, pp. 3-5). Plaintiff claims
that Defendant “miscalculates the overtime wages due by failing to include
commission payments in determining the employees’ regular rate of pay. Instead,
the Defendant intentionally deprives employees of their lawful wages by simply
taking their hourly wage and multiplying it by time and one half, thus excluding
lucrative commissions earned as part of the employees’ regular rate of pay for each
pay period.” (Id., ¶ 14). Plaintiff also includes collective action allegations in the
Amended Complaint. (Id., pp. 6-10). After lengthy negotiations, the parties reached
a proposed settlement as to Plaintiff’s claims as well as the claims of all putative
collective-action members. (Doc. 54, pp. 11-12).
LEGAL STANDARD
In FLSA cases generally, litigants often seek court approval of the settlement
of FLSA claims to avoid the risk that such a settlement without court approval may
be unenforceable. And to obtain approval of anything short of a full compensation
agreement, courts in this Circuit generally require the filing of the settlement
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agreement on the public docket for review. Any additional terms, such as nondisparagement or confidentiality provisions, are generally approved when they are
for the benefit of the employee or in furtherance of the employee’s interests. See
Zdun v. Virtu Cathedral Associates, LLC, No. 3:17-cv-579-J-39PDB, 2018 WL
3761024, *3-4 (M.D. Fla. May 14, 2018).
“If the parties are represented by competent counsel in an adversary context,
the settlement they reach will, almost by definition, be reasonable.” Dees v.
Hydrady, Inc., 706 F. Supp 2d 1227, 1241 (M.D. Fla. 2010). Nevertheless, when
scrutinizing FLSA settlements for fairness, courts generally evaluate:
(1) the existence of fraud or collusion behind the
settlement; (2) the complexity, expense, and likely
duration of the litigation; (3) the stage of the proceedings
and the amount of discovery completed; (4) the probability
of plaintiff’s success on the merits; (5) the range of
possible recovery; and (6) the opinions of the counsel.
Id.
Under the FLSA, an action “may be maintained against any employer . . . by
any one or more employees for and in behalf of himself or themselves and other
employees similarly situated.” 29 U.S.C. § 216(b). Thus, the FLSA authorizes the
use of collective actions against employers accused of violating the FLSA. Morgan
v. Family Dollar Stores, Inc., 551 F.3d 1233, 1258 (11th Cir. 2008). The purposes
of the collective action are twofold: (1) to reduce the burden on plaintiffs by pooling
their resources; and (2) to efficiently resolve common issues of fact and law that
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arise from the same illegal conduct. Id. at 1264. Basically, a collective action allows
the efficient resolution of a large number of plaintiffs’ claims at one time. Id. To
maintain a collective action, plaintiffs must demonstrate that they are “similarly
situated.” Id. (citing Anderson v. Cagle’s, Inc., 488 F.3d 945, 952 (11th Cir. 2007)).
Although not mandated, courts have utilized a two-tiered approach for
certifying a section 216(b) opt-in collective action. Copeland-Stewart v. New York
Life Ins. Co., No. 8:15-CV-159-T-23AEP, 2016 WL 231237, at *1 (M.D. Fla. Jan.
19, 2016). The Eleventh Circuit found the two-tiered approach a helpful tool for
district courts to use to manage these types of cases. Hipp v. Liberty Nat. Life Ins.
Co., 252 F.3d 1208, 1219 (11th Cir. 2001). The two-tiered approach consists of the
following:
The first determination is made at the so-called “notice stage.”
At the notice stage, the district court makes a decision – usually
based only on the pleadings and any affidavits which have been
submitted – whether notice of the action should be given to
potential class members.
Because the court has minimal evidence, this determination is
made using a fairly lenient standard, and typically results in
“conditional certification” of a representative class. If the
district court “conditionally certifies” the class, putative class
members are given notice and the opportunity to “opt-in.” The
action proceeds as a representative action throughout
discovery. The second determination is typically precipitated
by a motion for “decertification” by the defendant usually filed
after discovery is largely complete and the matter is ready for
trial. At this stage, the court has much more information on
which to base its decision, and makes a factual determination
on the similarly situated question. If the claimants are similarly
situated, the district court allows the representative action to
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proceed to trial. If the claimants are not similarly situated, the
district court decertifies the class, and the opt-in plaintiffs are
dismissed without prejudice. The class representatives – i.e. the
original plaintiffs – proceed to trial on their individual claims.
Based on our review of the case law, no representative class
has ever survived the second stage of review.
Hipp, 252 F.3d at 1218 (quoting Mooney v. Aramco Servs. Co., 54 F.3d 1207, 1211
(5th Cir. 1995)). The party seeking approval of the collective action has the burden
of showing a reasonable basis for a claim that other employees are similarly situated
to the plaintiff. Copeland-Stewart, 2016 WL 231237, at *2; see also Cagle’s, Inc.,
488 F.3d at 952 (holding at the conditional certification stage, a plaintiff must
demonstrate: (1) there are other employees who desire to opt-in to the action; and
(2) the employees who wish to opt-in are similarly situated). This standard is “not
particularly stringent,” “fairly lenient,” and “‘flexib[le].” CONDITIONAL
CERTIFICATION
In this case, the collective action opt-in members comprise, “all non-exempt
employees who worked for Defendant, and earned commissions as part of their
compensation in weeks in which they also worked overtime from June 1, 2015
through December 31, 2017.” (Doc. 54-1 ¶ 1.5). For conditional certification,
Plaintiff must show there are other employees who wish to opt-in to the action and
that they are similarly situated. One method to show whether other opt-in plaintiffs
wish to opt-in to the action is by showing that “plaintiffs can definitively establish
that other people exist who are subject to the same allegedly discriminatory
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policies complained of by plaintiffs.” Dawkins v. GMAC Ins. Holdings, Inc., No.
3:03-CV-322-J-99HTS, 2005 WL 8159667, at *7 (M.D. Fla. Sept. 1, 2005). Here,
Defendant “concedes that all members of the putative collective were eligible to
receive commissions and subjected to the same policy with respect to the inclusion
of such commissions in the overtime calculation.” (Doc. 54, p. 4). And there is no
dispute that the putative opt-in plaintiffs are 443 current and former employees of
Defendant. (Id., n.8). Thus, the many former and current employees fit within the
proposed collective action definition and this evidence is neither speculative nor
unsupported. Plaintiff therefore satisfies this requirement.
Next, Plaintiff must provide a reasonable basis to conclude that the
prospective opt-in plaintiffs are similarly situated to him. White v. SLM Staffing
LLC, No. 8:16-CV-2057-T-30TBM, 2016 WL 4382777, *2 (M.D. Fla. Aug. 17,
2016). Plaintiff represents that even though the putative opt-in plaintiffs may not
have held the same job positions or job titles, they all were non-exempt hourly
employees, who “received regular commissions as part of their compensation that
was not included in the regular rate for purposes of calculating overtime.
Specifically, Plaintiff and the putative collective-action members received regular
commission payments as a result of their roles in contributing to the engagement of
new or renewed residential leases.” (Doc. 54, p. 4). And all of the putative opt-in
plaintiffs were subject to the same alleged unlawful policy. (Id.). See Dawkins,
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2005 WL 8159667, at *8. Keeping the “fairly lenient” standard in mind, the Court
finds Plaintiff has satisfied the similarly situated requirement as well.
CLAIMS, DEFENSES, AND PROPOSED SETTLEMENT
Plaintiff was employed by Defendant as a marketing associate. (Doc. 18, ¶ 2).
Plaintiff alleges that he and current and former employees are entitled to recover
unpaid overtime compensation owed to him and all current and former employees
who were similarly situated to Plaintiff. (Id., ¶ 11). Defendant disputes liability.
(Doc. 54, p. 11).
Nonetheless, after extensive negotiations, the parties agreed to settle all claims
in this dispute after a year of “hard-fought litigation.” (Doc. 54, pp. 2, 11).
Evaluating the proposed settlement for fairness and reasonableness, the Court first
notes both parties agree that the settlement terms represent a fair and equitable
resolution of the dispute, especially in light of the amount negotiated representing
100% of the estimate of Plaintiff’s and putative members’ alleged losses. (Id.). The
parties represent that the settlement is preferable to the expense and time for a trial.
(Id., p. 13). And while Plaintiff is confident in the strength of his case, he is also
aware of the various defenses available to Defendant and the risks associated with
proceeding to trial. (Id.). The parties believe approval of the settlement agreement is
in their best interests “given the disputed issues and the risks, time requirements, and
unknown case duration inherent to litigation.” Kleekamp v. Home Performance All.,
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Inc., No. 2:17-cv-660, 2018 WL 2986687, *1 (M.D. Fla. June 6, 2018), report and
recommendation adopted, 2018 WL 2970982 (M.D. Fla. June 13, 2018). There is
no indication of any fraud or collusion. (Doc. 54, p. 12). Rather, the settlement
agreement results from arms’ length negotiations between well informed and
experienced counsel. (Id.; Doc. 54-1, ¶6.2).
Monetary Terms
The maximum gross settlement amount as defined in the Amended Settlement
Agreement totals $65,000.00. (Doc. 54-1, ¶ 1.15). During discovery, a list of all
putative collective action members was produced and the parties represent that the
allocation to each individual reflects a fair and reasonable allocation based on the
alleged hours worked by each member, as determined after review and consideration
of the discovery. (Id., ¶ 1.15(b). The parties devised a formula if the allocations
exceed the maximum settlement amount. (Id.). And conversely, the parties agreed if
all funds were not distributed, the remaining funds will be donated by Defendant to
Give Kids The World, Inc. (Id., ¶ 4.6). On balance, given the allocation formula and
identification of collective-action members, it appears highly unlikely that any such
cy pres distribution would become necessary. These terms appear fair and reasonable
considering the range of possible recovery and the risks of further litigation.
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Settlement Procedures
Under the terms of the Amended Settlement Agreement, the parties propose a
detailed road map of the settlement process. (Doc. 53-1). In sum, upon receipt of a
list of putative members, the Settlement Administrator mails to each a notice, and a
claim form. (Id., ¶ 3.3). The putative members who wish to participate must sign and
return the claim form within a specific time frame. (Id., ¶ 3.4). Following the
expiration of the notice period, the Settlement Administrator will provide a
comprehensive report identifying the participating members to counsel who will file
it with the Court. (Id., ¶ 3.6). The Amended Settlement Agreement also provides a
process for objections to the proposed settlement to be heard at a fairness hearing,
and a detailed process for payments after final approval of the agreement. (Id., ¶¶
3.7-4.7). Lastly, the Settlement Agreement contains a limited release that releases
Defendant from all claims and causes of action based on applicable federal or state
wage and hour laws that arise out of work performed through the date of the final
order approving the settlement. (Id., ¶ 5.1). This detailed process appears fair and
reasonable.
Attorney’s Fees and Costs
The proposed settlement includes an agreement that Defendant pays
Plaintiff’s attorneys’ fees and expenses in the amount of $52,861.07. (Doc. 54, p.
17). The parties represent that this amount was negotiated separately from the
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amounts claimed by Plaintiff and is not a function of any percentage of recovery.
(Id., p. 16-17). This aspect of the settlement also appears fair and reasonable. See
Bonetti v. Embarq Mgmt. Co., 715 F. Supp. 2d 1222, 1228 (M.D. Fla. Aug. 4, 2009).
NOTICE
Attached to the motion is the proposed “Notice of Settlement of Lawsuit and
Right to Submit Claim” and “Claim Form.” (Doc. 54-1, pp. 30-32, 34). The purpose
of court-authorized notice is to prevent misleading communications and to ensure
that the notice is timely, accurate, and informative. Hoffmann-La Roche Inc. v.
Sperling, 493 U.S. 165, 172, (1989). The Court finds the proposed notice is timely,
accurately reflects the claims, and informs the putative members of their rights and
obligations. The Court approves both the Notice and the Claim Form.
FAIRNESS HEARING
The parties request the Court schedule a fairness hearing at least ninety days
following the date of the preliminary approval order. (Doc. 54-1, ¶ 1.11). While class
actions may only be settled with judicial approval after a fairness hearing (see Fed.
R. Civ. P. 23(e)(2), such a hearing is not mandated in FLSA settlements. Mygrant v.
Gulf Coast Rest. Grp., Inc., No. CV 18-0264-WS-M, 2019 WL 4620367, at *7 (S.D.
Ala. Sept. 23, 2019). Although not mandated, courts may schedule a fairness hearing
particularly when objections are filed. Id. Thus, the Court will set a fairness hearing,
but may cancel it if no objections are filed in this case.
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Accordingly, it is ORDERED:
(1)
The Unopposed Motion for Entry of Preliminary Approval Order (Doc.
54) is GRANTED and the Court preliminarily approves the Amended
Settlement Agreement (Doc. 54-1).
(2)
The Court authorizes the Settlement Administrator, AB Data, Inc., to
distribute the Notice of Settlement and Claim Form to putative
collective-action members as set forth in the Amended Settlement
Agreement. (See Doc. 54-1, ¶ 1.10).
(3)
A Fairness Hearing will be set by separate notice on Tuesday,
February 9, 2021 at 10:00 a.m.
(4)
This action and all deadlines are stayed to carry out the terms and
conditions of the Amended Settlement Agreement and Preliminary
Approval Order.
DONE and ORDERED in Fort Myers, Florida on November 10, 2020.
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