GRIMES v. SOUTHEAST RESTAURANTS CORP

Filing 27

ORDER finding as moot 18 Motion for Settlement; finding as moot 25 Motion for Attorney Fees; granting 26 Amended Motion. It is Ordered that Plaintiff's Complaint be dismissed with prejudice. Ordered by Judge W. Louis Sands on 8/29/2013. (bcl)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
ALBANY DIVISION
JESSICA GRIMES,

:
:
Plaintiff,
:
:
v.
:
:
SOUTHEAST RESTAURANTS CORP, :
d/b/a PIZZA HUT,
:
:
Defendant.
:
___________________________ :

CASE NO.: 1:12-CV-150 (WLS)

ORDER
Presently pending before the Court is the Parties’ Amended Joint Motion for
Approval of Settlement of FLSA Claims. (Doc. 26.) For the reasons set forth below, the
Amended Joint Motion for Approval of Settlement (Doc. 26) is GRANTED.
Furthermore, because the parties stipulate to withdrawal of Joint Motion for Approval
of Settlement of FSLA Claims (Doc. 18) and Plaintiff’s Motion for Award of Attorney’s
Fees (Doc. 25), those Motions are DENIED AS MOOT.
PROCEDURAL AND FACTUAL BACKGROUND:
Plaintiff alleges that Defendant changed her wages and tips arbitrarily, paid her
less for her work than identical work being done by male African American colleagues,
paid her less than the minimum wage for periods when her work was not in an excepted
category, and did not pay her overtime wages when she worked more than a normal
work week. (Doc. 1 at 3.) Plaintiff also asserts that her complaints to the Georgia
Department of Labor resulted in retaliation. (Id.) Plaintiff filed suit seeking damages
under the Civil Rights Act of 1866, 42 U.S.C. § 1981, and the Fair Labor Standards Act of
1938, 29 U.S.C. §§ 201, et seq. (Id. at 8-9.) Plaintiff sought actual, compensatory, and

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punitive damages, all to be proven at trial, as well as attorney’s fees and expenses. (Id.
at 11.)
In the parties’ first Joint Motion for Approval of Settlement (Doc. 14), the parties
requested that the Court approve the proposed settlement agreement and dismiss the
case with prejudice. (Id. at 5.) The parties did not attach a copy of the settlement
agreement to the Motion, but requested that the Court allow for in camera review or
that it allow the parties to file the settlement agreement under seal. (Id.) On April 16,
2013, the Court allowed the parties to submit the settlement agreement under seal for
the Court’s review.

(Doc. 16.)

On July 26, 2013, this Court denied the parties’

settlement agreement because the agreement did not state whether Plaintiff was
receiving liquidated damages or, if not, the reasons therefor; the agreement did not
demonstrate the reasonableness of the attorney’s fees; the agreement contained a
potentially overbroad confidentiality provision and non-disparagement provision; and
the agreement contained an overbroad release provision. (Doc. 17 at 5-9.) Further, the
Court denied the parties’ stipulation to seal the agreement based on public policy
grounds. (See id. at 3-4.)
The parties filed their Joint Motion for Approval of Settlement of FLSA Claims,
(Doc. 18), and exhibits in support thereof (Doc. 20), on August 9, 2013. On August 12,
2013, Plaintiff filed a Motion for Award of Attorneys’ Fees. (Doc. 25.) The parties filed
the instant Amended Joint Motion for Approval of Settlement of FSLA Claims on August
26, 2013. (Doc. 26.) The parties stipulate to dismissing the previously filed motions
and exhibits. (Id. at 1.)

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ANALYSIS
This case was brought pursuant to the Fair Labor Standards Act (“FLSA”), 29
U.S.C. § 201, et seq. Because the agreement between the parties was not made under the
supervision of the Secretary of Labor, see 29 U.S.C. § 216(c), the Court must scrutinize
the parties’ settlement for fairness before entering a “stipulated judgment.” See 29
U.S.C. § 216(b); Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350, 1353 (11th Cir.
1982) (citations omitted). Judicial review is required because the FLSA was meant to
protect employees from substandard wages and oppressive working hours, and to
prohibit the contracting away of their rights. Lynn’s Food Stores, 679 F.2d at 1352
(citing Barrentine v. Arkansas-Best Freight System, 450 U.S. 728 (1981)).
Before approving a FLSA settlement, the court must review it to determine if it is
“a fair and reasonable resolution of a bona fide dispute.” Id. at 1354–55.

If the

settlement reflects a reasonable compromise over issues that are actually in dispute, the
Court may approve the settlement “in order to promote the policy of encouraging
settlement of litigation.” Id. at 1354. Additionally, the “FLSA requires judicial review of
the 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) (per curiam).
A.

Damages Award:

Any employer who violates 29 U.S.C. §§ 206 or 207 is liable to the affected
employee for the total amount of unpaid minimum wage plus an additional equal
amount in liquidated damages. 29 U.S.C. § 216(b). In the instant case, the United
States Department of Labor, Wage and Hour Division, determined that Defendant owed

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Plaintiff $766.67 in gross back wages. (Doc. 26-2 at 2.)

Because the Department of

Labor made this finding, the Court finds that the above-captioned case involves a bona
fide dispute. See Lynn’s Food Stores, 679 F.2d at 1354-55.
The Settlement Agreement and Release presently before the Court awards
Plaintiff $1,500 in back pay and $1,500 for “non-monetary damages.” (Doc. 26-1 at 34.) The stipulated damages award to Plaintiff, which is $1,500, is approximately double
the amount determined by the Department of Labor to be owed by the Defendant in
back pay. (Doc. 26-1 at 3.) The “non-monetary damages” award meets the requirement
that the liquidated damages amount equals the total amount of unpaid minimum wage.
(Id. at 4.) See 29 U.S.C. § 216(b). As such, the Court finds that the Damages Award
contemplated by the parties’ Settlement is a “fair and reasonable resolution of a bona
fide dispute.” See Lynn’s Food Stores, 679 F.2d at 1354-55.
B.

Attorney’s Fee and Costs:

To encourage private enforcement of statutory rights under the FLSA, Congress
created a fee-shifting provision in the Act which states: “The court ... shall, in addition to
any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney’s fee to
be paid by the defendant, and costs of the action.” 29 U.S.C. § 216(b). As explained by
the Eleventh Circuit, when a statute or rule of law permits an award of reasonable
attorney’s fees to the prevailing party, a court should utilize the lodestar method in
computing the appropriate fees. Norman v. Hous. Auth. of the City of Montgomery,
Ala., 836 F.2d 1292, 1298–99 (11th Cir. 1988) (citations omitted).
Under the lodestar method, a court determines the objective value of a lawyer's
services by multiplying the hours reasonably expended by a reasonable hourly rate.
Id. at 1299 (citing Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)).

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A “reasonable

hourly rate” is defined as “the prevailing market rate in the relevant legal community for
similar services by lawyers of reasonably comparable skills, experience, and reputation.”
Id. The burden is on the party seeking fees to produce “specific and detailed evidence”
demonstrating the reasonableness of the requested amount.” Id. at 1303. The burden
to prove a reasonable hourly rate is not a light one. “Hours reasonably expended” are
those that are not “excessive, redundant, or otherwise unnecessary” and are performed
by an attorney who has exercised “billing judgment.” Id. at 1301 (quoting Hensley, 461
U.S. at 434, 437). Therefore, “a lawyer may not be compensated for hours spent on
activities for which he would not bill a client of means who was seriously intent on
vindicating similar rights, recognizing that in the private sector the economically
rational person engages in similar cost benefit analysis.” Id.
The Settlement Agreement and Release contemplated by the instant motion lists
compensation for Plaintiff’s counsel as $4,000. (Doc. 26-1 at 4.) Plaintiff’s counsel,
John W. Roper, lists his time spent on this matter as 35.03 hours, at a rate of $300 per
hour, totaling $10,509.00. (Doc. 26-3 at 4.) Mr. Roper attached a spreadsheet of the
tasks completed and the time he spent on each task. (Id. at 7-11.) Mr. Roper has also
provided the Court with his credentials and experience. (See id. at 2-3.) An award of
attorney fees in the amount of $4,000 for 35.03 hours equates to approximately $114.19
per hour, less than one-half counsel’s asserted rate. (See id. at 4.)
Based on a review of the enumerated tasks and time associated therewith,
counsel’s credentials and experience, and the discounted rate that counsel is to receive
as attorney’s fees, the Court finds that the award of attorney’s fees and costs is fair and
reasonable.

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C.

Conflict of Interest Associated with Attorney’s Fees:

A number of district courts in this circuit have noted that potential conflicts of
interest may arise in the settlement of FLSA claims. “[A] potential conflict can arise
between counsel and their client regarding how much of the plaintiff's total recovery
should be allocated to attorneys’ fees and costs” in a FLSA settlement.

Petrov v.

Cognoscenti Health Inst., LLC, No 6:09–CV–1918–ORL–22GJK, 2010 WL 557062, at
*3 (M.D. Fla. Feb.12, 2010). Petrov indicated increased scrutiny should be exercised
when the “FLSA claim has or will be compromised by the deduction of attorneys’ fees,
costs or expenses pursuant to a contract between the plaintiff and his or her counsel, or
otherwise.” Id. District courts in this circuit have also indicated that simultaneous
negotiation of attorney’s fees with a damages award in a FLSA settlement should trigger
increased scrutiny of the reasonableness of the settlement. See Moreno v. Regions
Bank, 729 F. Supp. 2d 1346, 1347 (M.D. Fla. 2010) (fee agreement appears reasonable
when “the parties negotiated [the attorney's fee amount] separately and without regard
to the amount paid to the plaintiff.”); Bonetti v. Embarq Mgmt. Co., 715 F. Supp. 2d
1222, 1228 (M.D. Fla. 2009).
Here, there is no indication that the award of attorney’s fees and costs reduced
Plaintiff’s recovery. Plaintiff’s award includes $1,500 for back pay, which is nearly twice
the amount the Department of Labor determined to be owed to her by Defendant, plus
an equal amount in liquidated damages. Because Plaintiff is being more than fully
compensated for the back pay amount owed to her, the Court finds there is no basis for a
concern regarding a conflict of interest between Plaintiff and her counsel.

CONCLUSION

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Based on the foregoing, the Court GRANTS the Joint Motion for Approval of
Settlement. (Doc. 26.) Therefore, it is ORDERED that Plaintiff’s Complaint (Doc. 1) be
DISMISSED WITH PREJUDICE. Because the parties stipulate to withdrawal of
Joint Motion for Approval of Settlement of FSLA Claims (Doc. 18) and Plaintiff’s Motion
for Award of Attorney’s Fees (Doc. 25), those Motions (Docs. 18 & 25) are DENIED AS
MOOT.
SO ORDERED, this

29th day of August, 2013.
/s/ W. Louis Sands
THE HONORABLE W. LOUIS SANDS,
UNITED STATES DISTRICT COURT

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