Beachy v. Reliance Construction Inc et al

Filing 17

OPINION AND ORDER: GRANTING 16 Joint MOTION to Dismiss with prejudice and approve Confidential Settlement by Defendants Levi Beachy, Reliance Construction Inc and APPROVING 15 Confidential Settlement and Release Agreement. The Court GRANTING 14 Joint MOTION to Seal Confidential Settlement and Release Agreement Under Seal by Defendants Levi Beachy, Reliance Construction Inc. Signed by Judge Theresa L Springmann on 11/6/2015. (lhc)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
ANDY BEACHY,
Plaintiff,
v.
RELIANCE CONSTRUCTION, INC. and
LEVI BEACHY,
Defendants.

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CAUSE NO.: 3:15-CV-184-TLS

OPINION AND ORDER
This matter is before the Court on a joint motion by the Plaintiff, Andy Beachy, and the
Defendants, Reliance Construction, Inc., and Levi Beachy. On November 3, 2015, the parties
filed a Joint Motion to Approve Confidential Settlement and Dismiss Lawsuit With Prejudice
[ECF No. 16], and a Joint Motion to File and Maintain Confidential Settlement and Release
Agreement Under Seal [ECF No. 14].

BACKGROUND
On April 28, 2015, the Plaintiff filed a complaint [ECF No. 1] against the Defendants
under the Fair Labor Standards Act (“FLSA”) seeking to recover overtime wages that the
Plaintiff alleged were owed to him. On June 19, 2015, the Defendants filed an answer [ECF No.
9] contesting that the Plaintiff was owed any overtime wages. The Plaintiff alleged that the
Defendants violated the FLSA when they paid him at the regular rate of pay for all hours worked,
even though the Plaintiff regularly worked in excess of forty hours per week.
The Court has reviewed the Confidential Settlement and Release Agreement [ECF No.
15], which was filed under seal for this Court’s in camera review. The Settlement Agreement sets

forth the parties’ agreements with respect their claims against each other.

ANALYSIS
Stipulated settlements in an FLSA case for the recovery of unpaid overtime compensation
must be approved by the Court in the absence of direct supervision by the Secretary of Labor. See
29 U.S.C. § 216(c). The governing provision provides:
The Secretary is authorized to supervise the payment of the unpaid minimum
wages or the unpaid overtime compensation owing to any employee or employees
under section 206 or section 207 of this title, and the agreement of any employee
to accept such payment shall upon payment in full constitute a waiver by such
employee of any right he may have under subsection (b) of this section to such
unpaid minimum wages or unpaid overtime compensation and an additional equal
amount as liquidated damages.
Id. “[T]he Fair Labor Standards Act is designed to prevent consenting adults from transacting
about minimum wages and overtime pay.” Walton v. United Consumers Club, Inc., 786 F.2d 303,
306 (7th Cir. 1986). But “[s]ection 16(c) creates the possibility of a settlement, supervised by the
Secretary to prevent subversion, yet effective to keep out of court disputes that can be
compromised honestly.” Id. Because the Secretary has not supervised this settlement, the Court
must approve it.
“To determine the fairness of a settlement under the FLSA, the court must consider
whether the agreement reflects a reasonable compromise of disputed issues rather than a mere
waiver of statutory rights brought about by an employer’s overreaching.” Burkholder v. City of
Fort Wayne, 750 F. Supp. 2d 990, 994–95 (N.D. Ind. 2010) (citations, brackets, and quotation
marks omitted). The reviewing Court normally approves a settlement where it is based on
“contentious arm’s-length negotiations, which were undertaken in good faith by counsel” and
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where “serious questions of law and fact exist such that the value of an immediate recovery
outweighs the mere possibility of further relief after protracted and expensive litigation.” Id.
(quoting Reyes v. Buddha–Bar NYC, No. 08 CV 2494(DF), 2009 WL 5841177, at *3 (S.D.N.Y.
May 28, 2009)) (additional citation and quotation marks omitted).
The Plaintiff alleges that the Defendants failed to comply with the overtime provision
when they required the Plaintiff, as a nonexempt employee, to work in excess of forty hours per
week. The Defendants have denied any wrongdoing. Serious questions of law exist surrounding
whether the Plaintiff qualifies as an employee or an independent contractor during the time he
provided services to the Defendants. In light of these issues, the value of an immediate recovery
outweighs the mere possibility of further relief after litigating the matter further at the trial court
level. The litigation has not yet reached the expensive realm of dispositive motions or trial, and
the parties indicated they would incur further expense and risk on appeal.
Additionally, the parties are represented by counsel, who have negotiated in good faith
and at arm’s length.
Finding that the settlement is fair and reasonable, and “reflects a reasonable compromise
of disputed issues,” Burkholder, 750 F. Supp. 2d at 995, the Court approves the Confidential
Settlement and Release Agreement.
The Court also finds that the agreement’s confidentiality is a material term in the parties’
Confidential Settlement and Release Agreement, which the parties would have otherwise
executed as a private, confidential settlement agreement.

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CONCLUSION
For the reasons stated above, the Court GRANTS the parties’ Joint Motion [ECF No. 16]
and approves the Confidential Settlement and Release Agreement [ECF No. 15]. The Court also
GRANTS the Joint Motion to File and Maintain Confidential Settlement and Release Agreement
Under Seal.
SO ORDERED on November 6, 2015.

s/ Theresa L. Springmann
THERESA L. SPRINGMANN
UNITED STATES DISTRICT COURT
FORT WAYNE DIVISION

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