Nichols v. Dollar Tree Stores, Inc.

Filing 27

ORDER granting 26 Motion for Settlement and Dismissal with Prejudice. Ordered by U.S. District Judge W. Louis Sands on 1/14/2014. (bcl)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
ALBANY DIVISION
LEONARD R. NICHOLS,
Plaintiff,
v.
DOLLAR TREE STORES, INC.,
Defendant.

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CASE NO.: 1:13-CV-88 (WLS)

ORDER
Presently pending before the Court is the Parties’ Revised Joint Motion for
Approval of Settlement and Dismissal With Prejudice (“Revised Joint Motion”). (Doc.
26.) Therein, the Parties request that the Court enter an ender approving the Fair Labor
Standards Act (“FLSA”) settlement entered into by the Parties and dismiss this case with
prejudice. For the reasons stated below, the Revised Joint Motion for Approval of
Settlement and Dismissal With Prejudice (Doc. 26) is GRANTED.
PROCEDURAL HISTORY
By Order dated November 1, 2013, the Court denied the Parties’ initial Joint
Motion for Approval of Settlement and Dismissal With Prejudice. (Doc. 25.) The Court
denied the motion because the agreement did not state whether Plaintiff was receiving
liquidated damages or, if not, the reasons therefor; and the agreement contained
number provisions inconsistent with the purpose of FLSA, including a pervasive release
and a non-disparagement provision. The Court also ordered the Parties to file their
amended proposed settlement agreement on the public docket.

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On November 22, 2013, the Parties filed their Revised Joint Motion for Approval
of Settlement and proposed settlement agreement. (Doc. 26.) The Court now reviews the
agreement to ensure that it comports with the underlying purpose of FLSA.
DISCUSSION
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

The Parties represent that in settlement for his FLSA claims, Dollar Tree will pay
to Plaintiff $528.10 in total settlement of Plaintiff’s claims. (Doc. 26 at 3.) Per the
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Parties, this amount represents Plaintiff’s alleged back-pay for the number of weeks
worked during the limitations period, compensated at ½ times Plaintiff’s regular rate of
pay. (Id.) According to the Parties, this amount “represents a fair and equitable
resolution of this matter given the risks inherent in continued litigation, especially in
light of the jury’s verdict in Dollar Tree’s favor and against Plaintiff’s in the Knott
action.” (Id.)
The Court notes that the proposed amount does not appear to include liquidated
damages. In this instance, the lack of liquidated damages does not preclude the Court
from approving the agreement, however. While FLSA states that a plaintiff is entitled to
recover unpaid wages plus an equal amount of liquidated damages, see 28 U.S.C. §
216(b), the Eleventh Circuit has held that “the district court has discretion to reduce or
deny liquidated damages.” Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233, 1282
(11th Cir. 2008). Here, because there is still a “bona fide dispute” over whether Plaintiff
was entitled to overtime pay, and the Parties have chosen to settle in good faith in lieu of
continued litigation, the Court finds that the proposed damages award is a “fair and
reasonable resolution of a bona fide dispute.” See Lynn’s Food Stores, 679 F.2d at 135455; see also Phelps v. Detail USA, Inc., No. 3:11-cv-836, 2012 WL 254113, at *3 (M.D.
Fla. Jan. 19, 2012) (approving settlement agreement without provision for liquidated
damages where plaintiffs’ entitlement to overtime compensation was disputed because
“the settlement reflect[ed] ‘a reasonable compromise of disputed issues [rather] than a
mere waiver of statutory rights brought about by an employer's overreaching’”) (quoting
Lynn’s Food Stores, 679 F.2d at 1354).
B.

Attorneys’ Fees and Costs

Of Plaintiff’s $528.10 settlement amount, $264.05 (50% of the total award) will
be used to pay Plaintiff’s attorneys’ fees. (Doc. 26 at 4.) This amount is being paid
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pursuant to the contingency fee agreement entered into by Nichols and his counsel. (Id.)
Initially, the Court notes that the issue of contingency-fee agreements in FLSA cases is
far from a settled one, and that, as a general matter, a district court is not supposed to
defer to a contingency-fee agreement; rather the Court is supposed to scrutinize the
amount at issue to determine if it constitutes a reasonable fee award. See Silva, 307 F.
App’x at 351-52. In calculating the reasonable fee award, the Court is usually guided by
the “lodestar” method. Johnson v. Ga. Highway Express, Inc., 488 F.2d 714, 717-19
(5th Cir. 1974), abrogated on other grounds by Blanchard v. Bergeron, 489 U.S. 87
(1989).1 Here, however, because the amount is so small and likely does not represent the
total hours expended on this case, meaning it probably represents an amount below the
lodestar, the Court concludes that it need not do a traditional calculation. Instead, the
Court considers the fact that Plaintiff received an adverse decision as part of Knott v.
Dollar Tree Stores, Inc., No. 7:06-cv-01553 (N.D. Ala.), and there is no evidence that
Plaintiff will fare any better at trial in this Court. Additionally, Plaintiff has agreed to
this amount. Therefore, the Court finds that the $264.05 fee amount requested is fair
and reasonable, in light of the time and effort likely expended on Plaintiff’s behalf.2
Accordingly, the Revised Joint Motion for Approval of Settlement and Dismissal With
Prejudice (Doc. 26) is GRANTED.
SO ORDERED, this 14th day of January 2014.
/s/ W. Louis Sands
W. LOUIS SANDS, JUDGE
UNITED STATES DISTRICT COURT

The Eleventh Circuit has adopted as binding precedent all decisions issued by the former Fifth Circuit
prior to October 1, 1981. Bonner v. City of Prichard, 661 F. 2d 1206, 1209 (11th Cir. 1981) (en banc).
2 While the Court recognizes that a contingency-fee amount that reduces a plaintiff’s FLSA recovery by
50% would normally be suspect, in this case, as noted above, the Court finds the fee amount negotiated to
be nonetheless fair and reasonable based on the reasons stated herein.
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