Alewel v. Dex One Service, Inc.

Filing 25

MEMORANDUM AND ORDER: 19 & 22 Joint & Amended Joint Motion for approval of settlement agreement is granted. 21 Motion for Attorney Fees is granted. This matter is hereby dismissed with prejudice, subject to the courts jurisdiction retained regarding the settlement agreement and the parties compliance with the same. Signed by U.S. District Senior Judge Sam A. Crow on 2/7/2014. (mb)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
GREG ALEWEL, On Behalf of
Himself and All Others
Similarly Situated,
Plaintiff
vs.

Case No. 13-2312-SAC

DEX ONE SERVICE, INC.,
Defendant.
MEMORANDUM AND ORDER
The plaintiff Greg Alewel filed a collective action complaint on
behalf of himself and others similarly situated for unpaid overtime
compensation, liquidated damages, and attorneys’ fees and costs under the
Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq. After informally
exchanging relevant information, regularly communicating their respective
positions, and engaging in settlement negotiations, the parties reached a
settlement of the plaintiff’s individual claims. Under the FLSA, settlement
agreements and the attorneys’ fee awards are subject to the court’s
approval. Thus, the parties have filed an “Amended Joint Motion for Approval
of Settlement Agreement,” (Dk. 22), and the plaintiff has filed an
“Unopposed Motion for Attorneys’ Fees (Dk. 21) as recently supplemented
with the necessary lodestar analysis (Dk. 24). For the reasons stated here,
the court grants both motions.

Arising from his former employment as a telephone marketing
consultant at the defendant Dex One Service, Inc.’s location in Overland
Park, Kansas, the plaintiff filed an FLSA claim alleging overtime
compensation for the time he spent at home reviewing work-related
materials in preparation for a test required as a condition of his employment.
During a five-month period, the parties informally exchanged discovery
relevant to the claims and defenses and engaged in settlement negotiations.
They have reached a settlement in which the plaintiff, for his current claim of
approximately 501 overtime hours, he will receive unpaid wages and
liquidated damages totaling $31,875.00, plus attorneys’ fees and costs in
the amount of $10,625.00.
The court’s review of the settlement is guided by the following:
When employees sue their employer to recover overtime
compensation under the FLSA, the parties must present any proposed
settlement to the district court for review and a determination whether
the settlement is fair and reasonable. Gambrell v. Weber Carptet, Inc.,
No. 12-2131-KHV, 2012 WL 162403, at *2 (D. Kan. Jan. 19, 2012)
(citing Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350, 1353
(11th Cir. 1982)). If the settlement reflects a reasonable compromise
of issues actually in dispute, the Court may approve the settlement to
promote the policy of encouraging settlement of litigation. Id. at *2
(citing Lynn’s Food Stores, 679 F.2d at 1354): McCaffrey [v. Mortg.
Sources, Corp.,] 2011 WL 32436, at *3 [(D. Kan. Jan. 5, 2011)].
To approve an FLSA settlement, the Court must find that (1) the
litigation involves a bona fide dispute, (2) the proposed settlement is
fair and equitable to all parties concerned and (3) the proposed
settlement contains an award of reasonable attorney fees. See
McCaffrey, 2011 WL 32436, at *2.
Grove v. ZW Tech, Inc., No. 11-2445-KHV, 2012 WL 4867226, at *2-*3 (D.
Kan. Oct. 15, 2012).
2

The court has carefully read and considered all of the details
provided in the parties’ amended joint motion for approval of the settlement.
The court concludes bona fide disputes exist over many factual issues,
including whether the plaintiff did work off the clock, and over several
significant factual and legal issues, including whether any time spent
reviewing materials is compensable based on the defendant’s denial that it
had required the review time or had made it a condition of employment.
Employing the various factors laid out in the Grove decision, the court finds
that the settlement is fair, reasonable and equitable. There are serious and
involved questions of law and fact in dispute, and this litigation poses
substantial risks and difficulties in the parties’ presentations of their
respective positions on this problematic “off-the-clock” claim. The court is
satisfied that the settlement agreement is not the result of collusion or
fraud, but it is the product of protracted arms-length negotiations between
experienced and knowledgeable attorneys over a bona fide dispute. Both
sides candidly admit the extreme difficulty in proving and defending “off-theclock” cases and the significant costs involved in preparing and presenting
such cases. In light of the risks, costs, and the serious issues in dispute, the
court finds that the settlement agreement represents a fair and equitable
resolution of the FLSA claims and is in the best interest of the parties.
The parties’ amended joint motion lays out the length of the
plaintiff’s employment, his rate of pay, and his adjusted estimate of claimed
3

overtime hours. The plaintiff more accurately calculated his claimed overtime
from a review of time and leave records and the company policies. The court
finds that the settlement amount of $31,875.00 is reasonable and
compensates, fairly and fully, the plaintiff on his overtime claim along with
liquidated damages for the entire period of his employment.
As for the approval of the attorneys’ fees and costs, the plaintiff
proposes the court may use either method the “percentage of the fund” or
lodestar method. The court will rely on the latter method because the
plaintiff has not shown this case to qualify for the former and because the
lodestar analysis remains the primary determination of reasonableness. The
FLSA requires that settlement agreements include an award of “a reasonable
attorney’s fee . . . and costs of the action.” 29 U.S.C. § 216(b). The
plaintiff’s supplement to his unopposed motion for attorneys’ fees shows the
lodestar calculation to be $10,739.50 and just exceeding the requested
amount of $10,625.00. The court has reviewed the billing records and the
hourly rates as supported by evidence of customary fees charged in the
relevant market. The court finds that the requested hourly rates and the
number of billed hours are reasonable and acceptable. The court likewise has
considered the plaintiff’s supplement that identifies and discusses the
circumstances relevant under each of the Johnson factors. Grove, 2012 WL
4867226 at *5 (citing Johnson v. Ga. Highway Express, Inc., 488 F.2d 714
(5th Cir. 1974) and Rosenbaum v. MacAllister, 64 F.3d 1439, 1445 (10th Cir.
4

1995)). This case involved the factually complicated “off-the-clock” claims
that are difficult to prove. The plaintiff’s counsel has demonstrated his
expertise and experience in these matters, and he assumed a substantial
risk in taking this matter on a contingency basis. The court finds that the fee
award in this case is not out of line with the awards in similar FLSA cases.
For these reasons and substantially for the reasons stated in the parties’
motions, amended motion and supplement, the court sustains the parties’
motions for approval of the settlement, fees and costs.
The parties’ agreed proposed order also includes the following
paragraph which is incorporated here. Plaintiff shall conclusively be deemed
for all purposes to be permanently barred from commencing, prosecuting, or
otherwise maintaining in any court or forum any action against Defendant as
set forth in the Agreement and related settlement documents, including but
not limited to any action for unpaid wages and/or liquidated damages
against Defendant under the FLSA.
IT IS THEREFORE ORDERED that the parties’ joint motion for
approval of settlement agreement (Dk. 19) and their amended joint motion
for approval of settlement agreement (Dk. 22) is granted;
IT IS FURTHER ORDERED that the plaintiff’s unopposed motion
for attorneys’ fees (Dk. 21) as recently supplemented with the necessary
lodestar analysis (Dk. 24) is granted;

5

IT IS FURTHER ORDERED that this matter is hereby dismissed
with prejudice, subject to the court’s jurisdiction retained regarding the
settlement agreement and the parties’ compliance with the same.
Dated this 7th day of February, 2014, Topeka, Kansas.

s/Sam A. Crow
Sam A. Crow, U.S. District Senior Judge

6