Tran v. New Generation Fusion Restaurant Group, LLC, et al

Filing 46

ORDER denying 45 Plaintiff's Motion for Reconsideration; striking 43 Joint Stipulation for Dismissal with Prejudice. The parties are directed to file a joint motion for approval of settlement agreement on or before March 26, 2015. Signed by Judge Paul G. Byron on 3/12/2015. (SEN)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
PHU THANH TRAN, on behalf of
himself and those similarly situated,
Plaintiff,
v.

Case No: 6:14-cv-572-Orl-40DAB

NEW
GENERATION
FUSION
RESTAURANT GROUP, LLC, MING
YU BEN, and TZU Y. CHEUNG,
Defendants.
ORDER
This cause comes before the Court without oral argument on Plaintiff’s Motion for
Reconsideration and Incorporated Memorandum of Law (Doc. 45), filed February 13,
2015. Plaintiff asks the Court to reconsider its January 14, 2015 Order (Doc. 44) directing
the parties to submit their agreement for the settlement of this Fair Labor Standards Act
case as required by Lynn’s Food Stores, Inc. v. United States ex rel. U.S. Department of
Labor. Defendants have not responded to Plaintiff’s motion and Plaintiff represents that
Defendants do not take any position regarding the relief sought. Upon consideration, the
Court denies Plaintiff’s motion, strikes the parties’ joint stipulation of dismissal, and directs
compliance with the settlement approval requirements governing lawsuits brought under
the Fair Labor Standards Act.
I.

BACKGROUND
Plaintiff worked as a server for a Hibachi buffet-style restaurant operated by

Defendants in Altamonte Springs, Florida. (Doc. 10, ¶¶ 25, 27). On April 10, 2014,
Plaintiff initiated this putative class action lawsuit against Defendants for the recovery of

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back wages pursuant to the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201–219.
(Doc. 1).

On June 26, 2014, Defendants answered Plaintiff’s Amended Complaint.

(Doc. 21). The parties subsequently filed a Joint Stipulation for Dismissal with Prejudice
pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii). (Doc. 43). In their joint
stipulation for dismissal, the parties failed to indicate whether they had settled their
dispute; as a result, on January 14, 2015, the Court ordered the parties to advise as to
whether there was a settlement and, if so, to submit the appropriate paperwork for the
Court’s review. (Doc. 44). Plaintiff now moves the Court to reconsider its January 14,
2015 Order, stating that the Court no longer has jurisdiction over this matter due to the
parties’ stipulation of dismissal. (Doc. 45).
II.

STANDARD OF REVIEW
The Court may reconsider a non-final order “at any time before the entry of a

judgment adjudicating all the claims and all the parties’ rights and liabilities.” Fed. R. Civ.
P. 54(b); see also Bon Air Hotel, Inc. v. Time, Inc., 426 F.2d 858, 862 (5th Cir. 1970). 1
“The purpose of a motion for reconsideration is to correct manifest errors of law, to present
newly discovered evidence, or to prevent manifest injustice.” Merrett v. Liberty Mut. Ins.
Co., No. 3:10-cv-1195-J-12MCR, 2013 WL 5289095, at *1 (M.D. Fla. Sept. 19, 2013)
(quoting Horowitch v. Diamond Aircraft Indus., Inc., No. 6:06-cv-1703-Orl-19KRS, 2009
WL 1537896, at *3 (M.D. Fla. June 2, 2009)) (internal quotation marks omitted). It is the
movant’s burden to “set forth facts or law of a strongly convincing nature to induce the
court to reverse its prior decision.” Horowitch, 2009 WL 1537896, at *3. A movant will

1. In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), the
Eleventh Circuit adopted as binding precedent all of the decisions of the former Fifth
Circuit handed down prior to October 1, 1981.

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generally meet this burden where he shows “(1) an intervening change in controlling law;
(2) newly discovered evidence; or (3) the need to correct clear error or prevent manifest
injustice.” Voter Verified, Inc. v. Election Sys. & Software, Inc., No. 6:09-cv-1969-ORL19KRS, 2011 WL 3862450, at *2 (M.D. Fla. Aug. 31, 2011). Ultimately, reconsideration
is an extraordinary remedy that should be granted sparingly. Id.
III.

DISCUSSION
Plaintiff contends that the Court’s January 14, 2015 Order requiring the parties to

submit their settlement agreement for review constitutes clear error or manifest injustice. 2
(Doc. 45, p. 7). Plaintiff argues that a stipulation of dismissal filed pursuant to Federal
Rule of Civil Procedure 41(a)(1)(A)(ii) is self-executing and divests a district court of
subject matter jurisdiction immediately upon filing. (Id. at pp. 8–15). Plaintiff further
asserts that a party’s right to dismiss under Rule 41 is not limited in any way by the FLSA.
(Id. at pp. 2–6). As a result, Plaintiff concludes that the Court lacks the authority to compel
the parties to submit their settlement agreement for scrutiny. (Id. at p. 15).
A.

The Rule Requiring Review of FLSA Settlements

The Eleventh Circuit first described the requirement that district courts review
FLSA settlements for fairness in Lynn’s Food Stores v. United States ex rel. U.S.
Department of Labor, 679 F.2d 1350 (11th Cir. 1982). As a preliminary matter, the
Eleventh Circuit observed that “Congress made the FLSA’s provisions mandatory.” Id. at
1352. Consequently, “FLSA rights cannot be abridged by contract or otherwise waived

2. Plaintiff also urges the Court to reconsider its Order due to an intervening change in
controlling law. (Doc. 45, p. 7). However, the case to which Plaintiff cites was decided
in 2012, well before this action had commenced. Therefore, there is no intervening
change in controlling law for the Court to consider.

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because this would ‘nullify the purposes’ of the statute.” Id. (quoting Barrentine v.
Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 740 (1981)) (internal quotation marks
omitted). In terms of settling an FLSA claim, the Eleventh Circuit announced:
There are only two ways in which back wage claims arising
under the FLSA can be settled or compromised by
employees. First, under section 216(c), the Secretary of
Labor is authorized to supervise payment to employees of
unpaid wages owed to them . . . .
The only other route for compromise of FLSA claims is
provided in the context of suits brought directly by employees
against their employer under section 216(b) to recover back
wages for FLSA violations. When employees bring a private
action for back wages under the FLSA, and present to the
district court a proposed settlement, the district court may
enter a stipulated judgment after scrutinizing the settlement
for fairness.
Id. at 1352–53 (footnotes and citations omitted).

Lest any confusion on the issue

remained, the Eleventh Circuit firmly concluded as follows:
Other than a section 216(c) payment supervised by the
Department of Labor, there is only one context in which
compromises of FLSA back wage or liquidated damage
claims may be allowed: a stipulated judgment entered by a
court which has determined that a settlement proposed by an
employer and employees, in a suit brought by the employees
under the FLSA, is a fair and reasonable res[o]lution of a bona
fide dispute over FLSA provisions.
Id. at 1355. The Eleventh Circuit has since confirmed its holding in Lynn’s Food Stores
that district courts must review FLSA settlements for fairness. In Silva v. Miller, the
Eleventh Circuit repeated:
Only two ways exist for the settlement or compromise of an
employee FLSA claim: one is where an employee accepts
payment supervised by the Secretary of Labor; the other is
pursuant to a stipulated judgment entered by a court which
has determined that a settlement proposed by an employer
and employees, in a suit brought by the employees under the

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FLSA, is a fair and reasonable resolution of a bona fide
dispute over FLSA provisions.
307 F. App’x 349, 351 (11th Cir. 2009) (per curiam) (citations and internal quotation marks
omitted); see also Rakip v. Paradise Awnings Corp., 514 F. App’x 917, 919–20 (11th Cir.
2013) (per curiam) (re-iterating that Lynn’s Food Stores requires district courts to “take
an active role in approving” FLSA settlement agreements).
The Eleventh Circuit could not have been more clear that “[t]here are only two
ways” by which to settle or compromise an FLSA claim. Lynn’s Food Stores, 679 F.2d at
1352. Nevertheless, Plaintiff takes issue with the language that “the district court may
enter a stipulated judgment after scrutinizing the settlement for fairness.” Id. at 1353
(emphasis added).

Plaintiff interprets the emphasized “may” as allowing, but not

requiring, court review of FLSA settlement agreements. (Doc. 45, p. 4).
However, Plaintiff misconstrues the operative language. It is not “may” as opposed
to “shall,” but rather “may” as opposed to “may not.” The only logical reading of the
disputed language is that the district court is permitted to enter a stipulated judgment
where, after review, it deems a settlement fair; conversely, the district court is permitted
to not enter a stipulated judgment where, after review, the district court deems a
settlement unfair. In either case, the district court must review the parties’ settlement for
fairness.
Had the Eleventh Circuit employed the term “shall” in place of “may”—as Plaintiff
suggests would have been the case had the Eleventh Circuit intended review of FLSA
settlements to be mandatory—the disputed provision would then read to require the
district court, after reviewing the settlement agreement, to enter a stipulated judgment
regardless of whether the district court ultimately determined the settlement to be fair.

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Stated differently, using a mandatory word like “shall” would require the entry of a
stipulated judgment upon the act of scrutinizing a settlement agreement, not upon the act
of determining it to be fair. There can be no doubt that the Eleventh Circuit would never
intend such an exercise in futility.
It is true that not every end to an FLSA lawsuit requires judicial scrutiny. The FLSA
only contemplates reviewing settlement agreements that result in the “compromise” of an
employee’s claim. Bonetti v. Embarq Mgmt. Co., 715 F. Supp. 2d 1222, 1226 & n.6 (M.D.
Fla. 2009). Without delving into every circumstance which may result in a compromise,3
no party to this case represents that the settlement at issue is not a compromise of
Plaintiff’s FLSA claims. Accordingly, the Court need not address further whether review
of the parties’ settlement is not required on this basis.
To summarize, the FLSA prohibits employers and employees from negotiating or
bargaining away the rights provided by the statute. As a result, the Eleventh Circuit has
interpreted the FLSA to allow only two possible means for settling a case. First, payment
to the employee may be supervised by the Secretary of Labor. Second, where an
employee brings a direct action against his employer, the district court must review the
parties’ settlement for fairness and enter a stipulated judgment upon approval. Had the
Eleventh Circuit found any other “route for compromise of FLSA claims,” the appellate
court certainly had the ability to say as much. Lynn’s Food Stores, 679 F.2d at 1353
(footnote omitted).

3. For a comprehensive discussion of what amounts to the compromise of an employee’s
FLSA claim, see Dees v. Hydradry, Inc., 706 F. Supp. 2d 1227, 1240–44 (M.D. Fla.
2010).

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B.

Application in the Context of a Stipulation to Dismiss Filed Pursuant
to Rule 41

Federal Rule of Civil Procedure 41 allows a plaintiff to voluntarily dismiss his
lawsuit without a court order by filing “a stipulation of dismissal signed by all parties who
have appeared.” Fed. R. Civ. P. 41(a)(1)(A)(ii). The right to dismiss a case by stipulation
is not absolute, but is “[s]ubject to Rules 23(e), 23.1(c), 23.2, and 66 and any applicable
federal statute.” Fed. R. Civ. P. 41(a)(1)(A) (emphasis added). In cases where none of
these exceptions apply, a stipulation of dismissal is effective upon filing (unless the
stipulation specifies otherwise) and immediately divests the district court of subject matter
jurisdiction. Anago Franchising, Inc. v. Shaz, LLC, 677 F.3d 1272, 1278 (11th Cir. 2012).
As explained above, the Eleventh Circuit has firmly and consistently held that the
FLSA provides only two means by which to settle an FLSA dispute and that “FLSA rights
cannot be . . . otherwise waived.” Lynn’s Food Stores, 679 F.2d at 1352–53 (internal
quotation marks omitted). The Court takes the view that stipulating to the dismissal of an
FLSA claim without the district court’s review of the underlying settlement is not one of
the means enumerated by the Eleventh Circuit and constitutes an impermissible waiver
of rights under the FLSA, thus derogating Congress’ intent in enacting the statute.
Accordingly, the FLSA is “an applicable federal statute” to which the right of dismissal
under Rule 41(a)(1) is subject.
Plaintiff nevertheless urges the Court to follow those judges in this district who
have determined—whether explicitly or implicitly—that a stipulation of dismissal under
Rule 41(a)(1) is not subject to the FLSA’s settlement review requirement. (Doc. 45, pp. 2–
4, 15–16 n.5). Plaintiff is likely well aware that this Court is not bound by the decisions of
other district courts, but rather to the decisions issued by the Eleventh Circuit and the

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United States Supreme Court.

Further, the Court finds more persuasive Judge

Merryday’s published opinion in Dees v. Hydradry, Inc., 706 F. Supp. 2d 1227, 1231 (M.D.
Fla. 2010), which recognizes that, “[a]lthough a private settlement and stipulation for
dismissal ends the typical case without judicial intervention, the Eleventh Circuit requires
the district court to review the settlement of an FLSA claim.” With the utmost respect to
those judges in this district who have held otherwise, the undersigned reads Rule 41(a)(1)
and Lynn’s Food Stores to clearly condition dismissal of an FLSA action upon the district
court’s review of the parties’ settlement for fairness and subsequent approval. 4
C.

Application to this Case

In the instant case, although the parties have not notified the Court that they have
settled this action, the Court is able to divine from Plaintiff’s motion for reconsideration
that a settlement has indeed been reached. Because the parties have failed to submit
their settlement agreement for review and the Joint Stipulation for Dismissal with
Prejudice does not provide enough information for the Court to determine that the
settlement was fair, the parties have not complied with the FLSA’s requirements. The

4. Some commentators have noted with concern the predilection of district courts to not
review FLSA settlements for fairness where the parties agree to forgo review,
especially in light of increasingly congested dockets. See, e.g., Elizabeth Wilkins,
Silent Workers, Disappearing Rights: Confidential Settlements and the Fair Labor
Standards Act, 34 Berkeley J. Emp. & Lab. L. 109, 145–46 (2013) (commenting on
this problem in the context of confidential settlement agreements). To that end, it is
worth noting that Florida’s Middle District has become an epicenter of FLSA litigation
over the past decade. See Bonetti, 715 F. Supp. 2d at 1225 (calculating that FLSA
cases comprised approximately 20% of the Middle District’s civil cases pending in
2009). Moreover, although FLSA disputes now account for just over 5% of the Middle
District’s pending caseload, the district’s overall civil caseload has increased by more
than 10% since 2010. The Court therefore shares this concern, particularly because
the district courts are best positioned to prevent the type of abuse that may result from
the “often great inequalities in bargaining power between employers and employees.”
Lynn’s Food Stores, 679 F.2d at 1352.

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Court therefore concludes that its January 14, 2015 Order directing the parties to submit
their settlement agreement for review constitutes neither clear error nor manifest injustice.
IV.

CONCLUSION
For the aforementioned reasons, it is ORDERED AND ADJUDGED as follows:
1. Plaintiff’s Motion for Reconsideration and Incorporated Memorandum of
Law (Doc. 45) is DENIED.
2. The parties’ Joint Stipulation for Dismissal with Prejudice (Doc. 43) is
STRICKEN.
3. The parties are DIRECTED to file a joint motion for approval of settlement
agreement on or before March 26, 2015. The parties’ failure to submit
their settlement agreement for review within the time provided will result in
the Court placing this case back on a trial docket.
DONE AND ORDERED in Orlando, Florida on March 12, 2015.

Copies furnished to:
Counsel of Record

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