Enegren v. KC Lodge Ventures LLC et al
MEMORANDUM AND ORDER granting, in part, 73 plaintiffs' Unopposed Motion to Grant Final Certification and Approve Collective Action Settlement and granting 74 plaintiffs' Unopposed Motion for Approval of Award of Attorneys' Fees in Conjunction with Settlement. See Order for details. Signed by District Judge Daniel D. Crabtree on 10/11/2019. (mig)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
ALYSSA ENEGREN, et al.,
Case No. 17-2285-DDC-GEB
KC LODGE VENTURES LLC, et al.,
MEMORANDUM AND ORDER
Plaintiffs, on behalf of themselves and others similarly situated, filed this lawsuit under
the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201– 219, alleging unlawful pay practices
against defendants KC Lodge Ventures LLC, et al. Doc. 29. This matter comes before the court
on plaintiffs’ Unopposed Motion to Grant Final Certification and Approve Collective Action
Settlement (Doc. 73) and plaintiffs’ Unopposed Motion for Approval of Award of Attorneys’
Fees in Conjunction with Settlement (Doc. 74).
Defendants own and operate Twin Peaks franchise restaurants in Kansas and Missouri.
Plaintiff Alyssa Nida1 is a former Twin Peaks employee. She represents a collective class of
current and former employees (“Twin Peaks plaintiffs”) who have filed a putative collective
action claim for alleged FLSA violations. They assert that defendants (1) failed to pay Twin
Peaks plaintiffs for all hours worked; (2) failed to compensate Twin Peaks plaintiffs for the cost
of their uniforms and other image and costume standards; and (3) failed to ensure servers made
minimum wage after mandatory tip sharing.
Ms. Nida’s last name was Enegren when she filed the Complaint. She since has married and
changed her last name to Nida. Doc. 72.
Plaintiff, individually and on behalf of others similarly situated, filed a Complaint against
defendants on May 17, 2017. The parties participated in an unsuccessful mediation session on
January 22, 2018. Plaintiff then filed an amended complaint, and defendants filed an answer and
asserted various affirmative defenses. The parties proceeded with discovery from March to July
2018. On August 31, 2018, the parties filed a joint motion stipulating to conditional collective
action certification and asked the court to approve the parties’ eventual stipulation for
On September 10, 2018, the court conditionally certified plaintiffs’ claims as a collective
action under 29 U.S.C. § 216(b), and authorized notice to all current and former servers,
bartenders, and hostesses employed by any defendant at any time since June 6, 2015. Plaintiffs
mailed the court-approved notice to putative class members. The notice advised them of their
right to join the case and advised those who elected to join of the terms and conditions of class
If you choose to join this lawsuit, . . . you will be bound by any ruling, settlement, or
judgment, whether favorable or unfavorable, on the claims asserted. By joining this
lawsuit, you designate the Named Plaintiff as your representative, and to the fullest extent
possible, to make decisions on your behalf concerning the case, the method and manner
of conducting the case, the entering of an agreement with Plaintiff’s counsel regarding
payment of attorneys’ fees and court costs, the approval of settlements, and all other
matters pertaining to this lawsuit.
Doc. 54-1 at 3 (¶ 9). The Notice also advised:
If you choose not to join this lawsuit, you will not be affected by any ruling, judgment, or
settlement rendered on the claims asserted in this case, whether favorable or unfavorable.
Id. (¶ 10).
And, plaintiffs’ counsel required putative opt-in plaintiffs to file a consent form. The
court-approved consent form provides:
I hereby consent to be a party plaintiff seeking unpaid wages against [Defendants] . . . . I
designate the Named Plaintiff to make all decisions on my behalf concerning the method
and manner of conducting the case including settlement, the entering of an agreement
with Plaintiffs’ counsel regarding payment of attorneys’ fees and court costs, and all
other matters pertaining to this lawsuit. For purposes of this lawsuit, I choose to be
represented by Foulston Siefkin LLP and other attorneys with whom they may associate.
Id. at 5.
Following conditional certification, 102 Twin Peaks plaintiffs filed consent forms and
joined the case as opt-in plaintiffs. Through discovery and a separate agreement on the
conditional certification process, the parties exchanged documents and electronically stored
information about defendants’ uniform requirements and payroll, timekeeping, and personnel
records for every plaintiff.
On February 21, 2019, the parties participated in a mediation session with mediator
Dennis Gillen. After a full day of mediation, the parties reached a settlement agreement. The
parties later executed a Settlement Agreement and Release of Claims (“the Settlement
Agreement”) memorializing the terms of their settlement. Doc. 73-1. All opt-in plaintiffs have
received notice of the terms of the settlement, and none have objected. The parties have
submitted the Settlement Agreement to the court with plaintiffs’ unopposed motion seeking
approval of the settlement. Id.
Under the terms of the Settlement Agreement, defendant has agreed to pay a total of
$300,000.00 (the “Settlement Fund”), which will be allocated as follows:
1. No more than $15,000 to representative plaintiff as a service award;
2. No more than $133,000 in attorneys’ fees; and
3. The remainder—$152,000— to the 102 collective action members distributed on a
pro rata basis.
In exchange, the Twin Peaks plaintiffs have agreed to release any claims under state and federal
wage and hour laws, and any claims under state wage payment laws from the same facts as those
asserted in this case. Also, named plaintiff has signed a general release of all claims against
The Settlement Agreement provides for a pro rata distribution of the Settlement Fund to
each collective action member who consented to join this lawsuit. Plaintiffs’ counsel developed
a formula accounting for each plaintiff’s total period of employment, number of shifts worked,
and average hourly wage. Plaintiffs who had worked for a shorter period of time will receive a
smaller amount for uniform reimbursement, and those who worked for a longer period will
receive more. The portion of the settlement for unpaid meeting time is allocated based on the
number of shifts each plaintiff had worked.
Defendants will pay the Settlement Fund in four installments. Defendants will pay onehalf of the total amount after the court approves the settlement. They will pay the remaining
one-half in three subsequent equal installments. All amounts will be allocated on a pro rata
basis across the overall payment timeline (meaning that the named plaintiff, opt-in plaintiffs, and
plaintiffs’ counsel will receive their portions of the Settlement Fund at the same time).
A. FLSA Collective Action Settlement
The parties to an FLSA action must present a settlement of those claims to the court for
review and a determination that the settlement is fair and reasonable. Barbosa v. Nat’l Beef
Packing Co., LLC., No. 12-2311-KHV, 2015 WL 4920292, at *3 (D. Kan. Aug. 18, 2015) (citing
Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350, 1353 (11th Cir. 1982)). “To approve
an FLSA settlement, the Court must find that the litigation involves a bona fide dispute and that
the proposed settlement is fair and equitable to all parties concerned.” Id. (citing Lynn’s Food
Stores, Inc., 679 F.2d at 1353).
The court may enter a stipulated judgment in an FLSA action “only after scrutinizing the
settlement for fairness.” Id. (citing Peterson v. Mortg. Sources, Corp., No. 08-2660-KHV, 2011
WL 3793963, at *4 (D. Kan. Aug. 25, 2011)); see also Tommey v. Comput. Scis. Corp., No. 11CV-02214-EFM, 2015 WL 1623025, at *1 (D. Kan. Apr. 13, 2015) (citation omitted). “If the
settlement reflects a reasonable compromise over issues such as FLSA coverage or computation
of back wages that are actually in dispute, the Court may approve the settlement to promote the
policy of encouraging settlement of litigation.” Gambrell v. Weber Carpet, Inc., No. 10-2131KHV, 2012 WL 5306273, at *2 (D. Kan. Oct. 29, 2012) (citing Lynn’s Food Stores, 679 F.2d at
Also, when parties settle FLSA claims before the court has made a final certification
ruling, the court must make a final class certification finding before it can approve an FLSA
collective action settlement. Barbosa, 2015 WL 4920292, at *3 (citing McCaffrey v. Mortg.
Sources, Corp., No. 08-2660-KHV, 2011 WL 32436, at *2 (D. Kan. Jan. 5, 2011)).
B. Attorney’s Fees Under the FLSA
The FLSA requires the parties to include in the settlement agreement an award of
reasonable attorney’s fees and the costs of the action. 29 U.S.C. § 216(b); see also McCaffrey,
2011 WL 32436, at *2 (citing Lee v. The Timberland Co., No. C 07-2367-JF, 2008 WL 2492295,
at *2 (N.D. Cal. June 19, 2008)). The court has discretion to determine the amount and
reasonableness of the fee, but a FLSA fee award is mandatory. Barbosa, 2015 WL 4920292, at
*3 (citations omitted).
Plaintiffs have filed an Unopposed Motion to Grant Final Certification and Approve
Collective Action Settlement. Doc. 73. Plaintiffs also have filed an Unopposed Motion for
Approval of Award of Attorneys’ Fees in Conjunction with Settlement. Doc. 74. In their
motions, plaintiffs ask the court to certify a final collective action, approve the settlement as fair
and reasonable, and award the proposed attorneys’ fees and costs in an amount equal to 40
percent of the settlement. Doc. 74 at 2. The court addresses these requests, in turn, below.
A. Final Collective Action Certification
Because the parties have settled their FLSA claims before the court made a final
certification ruling, the court must enter a final class certification finding before it can approve
the settlement. See Barbosa, 2015 WL 4920292, at *3 (citing McCaffrey, 2011 WL 32436, at
*2). The FLSA provides that an employee may bring a collective action on behalf of other
employees who are “similarly situated.” 29 U.S.C. § 216(b). To determine whether plaintiffs
are “similarly situated” for purposes of final collective action certification, the court considers
several factors. They include: “(1) the disparate factual and employment settings of individual
plaintiffs; (2) various defenses available to defendant[s] which appear to be individual to each
plaintiff; and (3) fairness and procedural considerations.” Gambrell, 2012 WL 5306273, at *3
(citing Thiessen v. Gen. Elec. Capital Corp., 267 F.3d 1095, 1102–03 (10th Cir. 2001)).
Plaintiffs ask the court to certify a final collective action. The parties agree that the
plaintiffs are similarly situated and that final certification is warranted. But the court still must
examine the Thiessen factors before it can grant final certification.
For the first factor, plaintiffs assert that they are similarly situated because each class
member worked as a server at one of defendants’ franchised Twin Peaks restaurants. They had
common job descriptions and performed common duties involving food, beverage, and
merchandise sales. Defendants subjected all plaintiffs to the same personnel policies, including
uniform policies. Defendants expected all plaintiffs to participate in periodic special events and
“costume parties,” and the costume expectations were the same for all plaintiffs. These facts
demonstrate that individual plaintiffs worked in similar employment settings, and so the first
factor favors final collective action certification for plaintiffs.
For the second factor, plaintiffs assert that defendants have raised no defenses against any
individual plaintiff. Indeed, one of defendants’ primary defenses is that the clothing at issue is of
a general type that could be worn in other settings, so the clothing is not for the employers’
benefit and defendants had no obligation to compensate plaintiffs for the cost of that clothing. If
defendants would prevail on this argument, it would affect the claims of all plaintiffs equally.
The second factor also favors final collective action certification.
Finally, the third factor—fairness and procedural considerations—favors final collective
action certification. Allowing plaintiffs to pool their resources for litigation favors collective
action treatment. See Barbosa, 2015 WL 4920292, at *5 (citing Fulton v. TLC Lawn Care, Inc.,
No. 10-2645-KHV, 2012 WL 1788140, at *3 (D. Kan. May 17, 2012)). Also, the policy of
encouraging settlement of litigation also favors final collective action certification. Gambrell,
2012 WL 5306273, at *4 (citing Lynn’s Food Stores, Inc., 679 F.2d at 1354).
After considering the Thiessen factors, the court concludes that all three factors favor
final collective action certification. The court thus certifies a final collective action for the Twin
B. FLSA Collective Action Proposed Settlement
Plaintiffs next ask the court to approve the proposed Settlement Agreement (Doc. 73-1).
As explained above, when parties settle FLSA claims, they must present the settlement to the
court to review and decide whether the settlement is fair and reasonable. Tommey, 2015 WL
1623025, at *1; see also Gambrell, 2012 WL 5306273, at *2 (citing Lynn’s Food Stores, Inc.,
679 F.2d at 1352) (“When employees file suit against their employer to recover back wages
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.”). To approve an FLSA
settlement, the court must determine whether: (1) the litigation involves a bona fide dispute,
(2) the proposed settlement is fair and equitable to all parties, and (3) the proposed settlement
contains an award of reasonable attorney’s fees. Barbosa, 2015 WL 4920292, at *5 (citing
McCaffrey, 2011 WL 32436, at *2). The court addresses each consideration below.
1. Bona Fide Dispute
Before approving a settlement of FLSA claims, the parties must submit sufficient
information for the court to find that a bona fide dispute exists. McCaffrey, 2011 WL 32436, at
*4 (citing Dees v. Hydradry, Inc., 706 F. Supp. 2d 1227, 1241 (M.D. Fla. 2010)). To satisfy this
obligation, the parties must provide the court with: (1) a description of the nature of the dispute;
(2) a description of the employer’s business and the type of work performed by the employees;
(3) the employer’s reasons for disputing the employees’ right to a minimum wage or overtime;
(4) the employees’ justification for the disputed wages; and (5) if the parties dispute the
computation of wages owed, each parties’ estimate of the number of hours worked, and the
applicable wage. Id. In their motion, plaintiffs provide the court with this information. Doc. 73
at 2–6 & 10.
Plaintiffs assert that a bona fide dispute exists because the parties dispute whether
defendants properly compensated plaintiffs. Plaintiffs allege that defendants violated the FLSA
because they failed to pay plaintiffs minimum wages, after subtracting unreimbursed uniform
expenses and accounting for certain unpaid working time attending meetings. Defendants deny
these allegations and contend that the uniform items plaintiffs purchased were not required.
Defendants also argue that FLSA doesn’t require reimbursement for the uniforms because the
uniforms were not primarily for the employer’s benefit. Defendants also deny that plaintiffs
were required to attend meetings “off the clock.”
The parties participated in a mediation session on January 22, 2018, but failed to reach an
agreement. Plaintiffs then filed an Amended Complaint. Defendants filed an Answer, denying
that they failed to pay the putative class plaintiffs minimum wage and asserting other affirmative
defenses. Doc. 31. The parties engaged in pre-mediation written discovery, and required Judge
Birzer’s assistance with disputes about the scope of discovery. On February 21, 2019, the parties
participated in a second mediation session and reached an agreement.
Plaintiffs assert that defendants face a substantial monetary verdict, plus the attorneys’
fees and costs, if plaintiffs prevail. If not, plaintiffs may recover less, or nothing at all.
The court concludes that the claims and defenses asserted by the parties frame a bona fide
dispute about FLSA provisions.
2. Fair and Equitable
The court next considers whether the proposed settlement is fair and equitable. “To be
fair and reasonable, an FLSA settlement must provide adequate compensation to the employee
and must not frustrate the FLSA policy rationales.” Solis v. Top Brass, Inc., No. 14-cv-00219KMT, 2014 WL 4357486, at *3 (D. Colo. Sept. 3, 2014). To determine if the proposed
settlement is fair and equitable, courts regularly examine the factors that apply to proposed class
action settlements under Rule 23(e). Barbosa v. Nat’l Beef Packing Co., LLC., No. 12-2311KHV, 2014 WL 5099423, at *7 (D. Kan. Oct. 10, 2014); Tommey, 2015 WL 1623025, at *2.
Those factors include: “(1) whether the proposed settlement was fairly and honestly negotiated;
(2) whether serious questions of law and fact exist, placing the ultimate outcome of the litigation
in doubt; (3) whether the value of an immediate recovery outweighs the mere possibility of
future relief after protracted and expensive litigation; and (4) the judgment of the parties that the
settlement is fair and reasonable.” Barbosa, 2014 WL 5099423, at *7; Tommey, 2015 WL
1623025, at *2. “If the settlement reflects a reasonable compromise over issues such as FLSA
coverage or computation of back wages that are actually in dispute, the Court may approve the
settlement to promote the policy of encouraging settlement of litigation.” Gambrell, 2012 WL
5306273, at *2 (citing Lynn’s Food Stores, Inc., 679 F.2d at 1354).
Plaintiffs assert that the proposed settlement satisfies each of these factors. The court
First, the court concludes that the settlement was fairly and honestly negotiated. The
parties resolved the case through an arms-length mediation session with Dennis Gillen. Mr.
Gillen is a capable and experienced mediator.
Second, it appears the case presents substantial, disputed questions of law and fact, and
those issues place the ultimate outcome of the litigation in doubt. For plaintiffs’ reimbursement
claim, disputed issues include: (1) what clothing items defendants’ uniform guidelines required;
(2) how defendants’ managers enforced the uniform requirements; (3) whether the clothing items
were general enough so that they were not reimbursable business expenses; and (4) the
sufficiency of the evidence about plaintiffs’ clothing and related purchases. The parties also
dispute unpaid work time. Specifically, they dispute whether the meetings were mandatory and
the amount of allegedly uncompensated meeting time. And, conflicting timekeeping records will
make it difficult to resolve these questions.
Third, the Settlement Agreement provides value in the form of an immediate recovery to
plaintiffs. That certain outcome is more desirable than uncertain future relief after protracted and
expensive litigation. Defendants’ restaurants are spread across Kansas and Missouri, and some
plaintiffs have relocated. Defendants assert they would depose all 103 plaintiffs, and plaintiffs
would have to depose managers at defendants’ numerous restaurants and corporate employees.
Significant discovery and the likelihood of dispositive motions from both sides means a litigated
resolution is years away, and at considerable expense.
And fourth, the parties assert the Settlement Agreement is fair and reasonable. The
named plaintiff and defendants—all of whom are represented by experienced and motivated
counsel—have agreed to a settlement they evaluate as fair and reasonable. Plaintiffs’ counsel
notified the opt-in plaintiffs of the Settlement Agreement and gave them an opportunity to object
to the settlement terms. None objected. The court views counsels’ experience and plaintiffs’
silence as circumstantial evidence that the settlement was fair and reasonable. The court thus
finds that all four factors favor the settlement.
But while these factors may demonstrate that the settlement agreement is fair and
reasonable, they do not control the outcome. See McCaffrey, 2011 WL 32436, at *5 (explaining
that the Rule 23(e) factors “provide a general framework for the Court’s determination whether
an FLSA settlement is fair, but they are not determinative”). In addition to the four factors listed
above, the court also must determine “that the proposed settlement is fair and equitable to all
parties in light of the history and policy of the FLSA.” Gambrell, 2012 WL 5306273, at *5. The
court thus examines several additional considerations to determine whether the Settlement
Agreement is fair and equitable. They include: (i) whether opt-in plaintiffs received notice of
the proposed settlement and an opportunity to object; (ii) how plaintiffs’ counsel plans to
distribute the Settlement Fund; and (iii) how much of the Settlement Fund should be allocated to
the named plaintiff as a service award.
a. Notice of the Proposed Settlement
The FLSA does not require a fairness hearing like that required for settling class actions
brought under Fed. R. Civ. P. 23. Tommey, 2015 WL 1623025, at *1. But courts routinely hold
fairness hearings in FLSA actions unless the parties demonstrate that the opt-in plaintiffs had
notice of the settlement and an opportunity to object. Stubrud v. Daland Corp., No. 14-2252JWL, 2015 WL 5093250, at *1 (D. Kan. Aug. 28, 2015) (citing Tommey, 2015 WL 1623025, at
*1; Goldsby v. Renosol Seating, LLC, No. 2:08-0148-KD-N, 2013 WL 6535253, at *10 (S.D.
Ala. Dec. 13, 2013)). As explained below, plaintiffs here have submitted sufficient information
to establish that all 102 opt-in plaintiffs received notice of the settlement and the opportunity to
object. Thus, in these circumstances, the court has decided that it need not conduct a fairness
On March 5, 2019, plaintiffs’ counsel notified all opt-in plaintiffs by email that the
parties had reached a settlement and to expect a letter with information about the settlement’s
terms.2 On March 29, 2019, plaintiffs’ counsel provided each plaintiff a letter explaining:
(1) the material terms of the settlement and the overall settlement amount; (2) the settlement’s
division; (3) the factors used to allocate the settlement amount among plaintiffs; (4) the
Plaintiffs’ counsel notes that they had previously corresponded with the opt-in plaintiffs via email, and thus had a valid e-mail address for each plaintiff. None of the e-mails were returned as
undeliverable. Doc. 7 at 5 n.3.
settlement portion the recipient plaintiff would receive; (5) the income tax reporting for the
settlement; (6) the timing of the settlement payments; (7) the amount of the proposed service
award allocated to the named plaintiff; (8) the proposed amount of attorneys’ fees and costs
allocated to plaintiffs’ counsel; and (9) the limited release binding each opt-in plaintiff. The
letter provided a dedicated phone number and e-mail address for any objections and provided a
three-week window and process for raising any objections. Plaintiffs’ counsel received no
objections. The court concludes that notice of the proposed settlement to the opt-in plaintiffs
was fair and reasonable.
b. Distribution of Settlement Proceeds
The Settlement Agreement requires distribution of the Settlement Fund based on an
allocation formula plaintiffs’ counsel developed. The formula reflects each opt-in plaintiff’s
total period of employment, number of shifts worked, and average hourly wage. Plaintiffs’
uniform expense claim is based on monthly themed events and occasional special events, so
plaintiffs who worked over a shorter period of time will receive smaller reimbursement amounts,
and those who worked over a longer period of time will receive more. The portion of the
settlement for regular pre-shift meetings is allocated based on the number of shifts each opt-in
plaintiff worked. The formula also accounts for monthly meetings, with allocation based on the
number of months each opt-in plaintiff had worked. All calculations are limited to the opt-in
plaintiff’s period of employment within the statutory recovery period (which varies based on the
date of filing for the consent form under 29 U.S.C. § 256(b)), with adjustments to reflect the
court’s tolling order. Based on plaintiffs’ counsel’s representations, the court concludes the
proposed distribution of the Settlement Fund is fair and reasonable.
c. Service Award
The court also must examine any service award payments and determine whether they are
fair and reasonable. See Tommey, 2015 WL 1623025, at *2; Grove v. ZW Tech, Inc., No. 112445-KHV, 2012 WL 1789100, at *7 (D. Kan. May 17, 2012). Here, plaintiffs ask the court to
approve a service award in the amount of $15,000 for the representative plaintiff (Ms. Nida).
Plaintiffs assert that this amount is reasonable and thus the court should approve the service
The amount of the requested service award ($15,000) represents five percent of the
Settlement Fund. Opt-in plaintiffs will receive between $40.21 and $5,746.40, based on
plaintiffs’ counsel’s formula accounting for total period of employment, number of shifts
worked, and average hourly wage.3 According to their own estimate, Ms. Nida spent 131 hours
on the case (amounting to an award of $114.50 per hour if she receives the proposed $15,000).
She provided plaintiffs’ counsel with documents and information necessary for their
investigation, reviewed allegations in the complaint before filing, helped formulate document
and information requests, identified and contacted potential witnesses, met with counsel at least
eleven times, and attended two full-day mediation sessions.
Plaintiffs assert that Ms. Nida left her job at Twin Peaks after bringing this lawsuit
because her managers and co-workers were upset with her, and she did not believe she could
return to work without harm to her mental health. She lost 16 weeks of income while she looked
for a job with comparable income. She also missed two full days of work and several half days
of work because she devoted that time to working on this case. Plaintiffs contend that future
Ms. Nida’s portion of the settlement under the distribution formula is $3,355.63. So, if she received the
service award represented by counsel, she would receive $18,355 of the $300,000 settlement fund.
employers may be less likely to hire Ms. Nida if they learn of the role she played in this lawsuit.
They also contend that the she shouldered the entire burden in this case as the only representative
plaintiff. She also released all her personal claims against defendants as a condition of
The court recognizes Ms. Nida’s contributions, but a service award equal to five percent
of the Settlement Fund and amounting to $114.50 per hour is out of line with awards in this
district. “[O]ur court has found that $20 per hour is a reasonable incentive fee.” Foster v.
Robert Brogden’s Olathe Buick GMC, Inc., 2019 No. 17-2095-DDC-JPO WL 1002046 at *19
(D. Kan. Feb. 28, 2019); see also In re Sprint Corp. ERISA Litig., 443 F. Supp. 2d 1249, 1271
(D. Kan. 2006) (reducing requested service awards to each of the four named plaintiffs from
$15,000 to $5,000, even though the total settlement exceeded $25 million, because the $5,000
award adequately compensated each plaintiff for the 80 hours of time, on average, that each
devoted to the lawsuit); Barbosa, 2015 WL 4920292, at *6 (rejecting proposed service award of
$3,500 to each of the two named plaintiffs who spent 24.1 hours and 9.6 hours respectively on
the case, and instead concluding that $20 per hour for the time plaintiffs spent on the case was a
fair and reasonable service award); Bruner v. Sprint/United Mgmt. Co., Nos. 07-2164-KHV, 082133-KHV, 08-2149-KHV, 2009 WL 2058762, at *11 (D. Kan. July 14, 2009) (rejecting
$10,000 proposed service award to the named plaintiff in an $8.7 million settlement because
plaintiff failed to provide specific details about the amount of time she invested in the suit and
awarding a $5,000 service award instead).
In contrast to the scope of Ms. Nida’s release, the putative class members signed only a limited
release, i.e., releasing all claims under federal and state wage and hour laws, and any claims under state
wage payment laws that arise from the same facts asserted in this case.
Here, plaintiffs have provided detailed information about Ms. Nida’s contributions to the
case. They also provided information on lost compensation—both from when she missed work
to assist with the case and when she was out of work after leaving defendants’ employment—and
the burden on her as the only representative plaintiff. The court takes into account her time off
work to assist with this case. The court also recognizes that she has released all claims she could
assert against defendants, not just federal and state wage claims.
But the court can’t permit Ms. Nida to increase her service fee to compensate her for an
unasserted retaliation claim. The FLSA makes it unlawful to “discharge or in any other manner
discriminate against any employee because such employee has filed any complaint or instituted .
. . any proceeding under or related this this chapter . . . .” 29 U.S.C. 215(a)(3). See, e.g.,
Pacheco v. Whiting Farms, Inc., 365 F.3d 1199 (10th Cir. 2004). The court has no way to know
whether defendants retaliated against her for asserting an FLSA claim. But if they did, as Ms.
Nida claims, she had every right to assert a claim alleging retaliation and ask to recover any
income lost because of retaliation. See Pacheco, 365 F.3d at 1206 (explaining the burdenshifting framework for FLSA retaliation claims). But the court can’t increase her service fee
based on the allegation that Ms. Nida lost income because of unproven retaliation. Doing so, in
effect, would let her recover for that alleged loss from her fellow class members. This theory
isn’t a proper basis for a service fee award.
Based on guidance our court has given in similar cases, the court determines that
plaintiffs’ request for a $15,000 service award for the representative plaintiff would grant her a
disproportionate windfall. The court thus reduces the representative plaintiff’s service award to
$5,000. The court finds that this amount is a fair and reasonable amount for her contributions.
C. Attorneys’ Fees
Plaintiffs’ counsel seeks an award of $120,000 for attorneys’ fees. Doc. 74. The
attorneys’ fees amount represents 40 percent of the Settlement Fund. A percentage fee from a
common fund award “must be reasonable and . . . the district court must articulate specific
reasons for fee awards demonstrating the reasonableness of the percentage and thus the
reasonableness of the fee award.” Barbosa, 2015 WL 4920292, at *7 (citing Brown v. Phillips
Petroleum Co., 838 F.2d 451, 454 (10th Cir. 1988)).
To determine the fee award’s reasonableness, “[t]he Tenth Circuit applies a hybrid
approach, which combines the percentage fee method with the specific factors traditionally used
to calculate the lodestar.” Id. (first citing Rosenbaum v. MacAllister, 64 F.3d 1439, 1445 (10th
Cir. 1995); then citing Gottlieb v. Barry, 43 F.3d 474, 483 (10th Cir. 1994)). This method calls
on the court to calculate a lodestar amount, “which represents the number of hours reasonably
expended multiplied by a reasonable hourly rate.” Solis v. Top Brass, Inc., No. 14-cv-00219KMT, 2014 WL 4357486, at *4 (D. Colo. Sept. 3, 2014) (citing Hensley v. Eckerhart, 461 U.S.
424, 433 (1983) (further citation omitted)); see also Hobbs v. Tandem Envtl. Sols., Inc., No. 101204-KHV, 2012 WL 4747166, at *3 (D. Kan. Oct. 4, 2012). The hybrid approach also requires
the court to consider the factors set out in Johnson v. Georgia Highway Express, Inc., 488 F.2d
714 (5th Cir. 1974), abrogated on other grounds by Blanchard v. Bergeron, 489 U.S. 87 (1989).
Those factors are: (1) time and labor required; (2) novelty and difficulty of the questions
presented in the case; (3) skill requisite to perform the legal service properly; (4) preclusion of
other employment by the attorneys due to acceptance of the case; (5) customary fee; (6) whether
the fee is fixed or contingent; (7) any time limitations imposed by the client or circumstances; (8)
amount involved and results obtained; (9) experience, reputation, and ability of the attorneys;
(10) undesirability of the case; (11) nature and length of the professional relationship with the
client; and (12) awards in similar cases. Barbosa, 2015 WL 4920292, at *8 (first citing
Rosenbaum, 64 F.3d at 1445; then citing Johnson, 488 F.2d at 717–19).
The court analyzes these factors below.
1. Time and Labor Required
After litigating this case for more than two years, plaintiffs’ counsel represents that they
have spent about 318 attorney hours and 180 paralegal hours working on this matter. The tasks
involved in this case included investigating and researching the claims, drafting and filing the
Complaint, propounding discovery, addressing deficiencies in production, reviewing documents,
numerous phone calls with defendants’ counsel, preparing for a contested conditional
certification process (although it was ultimately achieved through stipulation), coordinating the
filing of consent forms from 102 opt-in plaintiffs, interviews and other communications with the
opt-in plaintiffs, preparing damages calculations, preparing for and participating in two
mediations, drafting the Settlement Agreement, and drafting pleadings for approval of the
settlement. The court finds this litigation required significant effort by counsel that justifies the
Plaintiffs’ counsel provides an hourly rate for the timekeepers who recorded time to this
matter. Partners Boyd Byers (142.5 hours) and Forrest Rhodes (129.0 hours) billed the large
majority of the hours recorded to this matter. Mr. Byers leads the firm’s employment law group,
and has about 25 years of experience in employment law. Mr. Rhodes is a partner in the firm’s
employment group and has practiced for about 19 years. He specializes in FLSA matters. Two
associates billed a total of 47.3 hours. Three paralegals billed the remaining time (337.8 hours).
Plaintiffs’ counsel asserts the lodestar amount is $178,865.00. But counsel is requesting
$120,000 based on a 40 percent contingency fee agreement. The court concludes this factor
favors approval of the fee award.
2. Novelty and Difficulty of the Questions Presented
Plaintiffs assert that wage and hour cases, especially collective actions, involve a
complex blend of statutory and regulatory requirements that require skilled and experienced
counsel. But the court already considered the complexity of collective actions in its analysis of
the first Johnson factor, i.e., it considered the time and labor counsel devoted to the case. Thus,
the court finds this factor is a neutral one in the analysis.
3. Skill Requisite to Perform the Legal Service Properly
Plaintiffs’ counsel regularly handle FLSA litigation, including prosecuting and defending
numerous collective actions. Plaintiffs’ counsel are knowledgeable about the FLSA’s
requirements and how those issues are litigated. They brought that skill and experience to bear
and prepared this case for conditional certification and settlement. Plaintiffs’ counsel developed
a dynamic spreadsheet that took into account multiple factors specific to each of the 103
plaintiffs, including each plaintiff’s overall period of employment (with individual adjustments
to reflect the actual recovery period and tolling), the actual number of shifts each plaintiff
worked, and her average hourly wage. This model allowed plaintiffs’ counsel to assess potential
damages and to allocate settlement monies fairly and reasonably among plaintiffs. The skill
required to litigate this case supports approval of the requested fee.
4. Preclusion of Other Employment
Plaintiffs’ counsel represents that this lawsuit precluded counsel from taking on other
work. As stated, counsel spent about 318 attorney hours and 180 paralegal hours on this matter.
They litigated the case for more than two years without any guarantee of recovery. The court
finds that the time spent litigating the case demonstrates that the lawsuit precluded plaintiffs’
counsel from working on other matters. This factor favors approval of the fee award.
5. Customary Fee
“While the Tenth Circuit applies a hybrid approach in determining the reasonableness of
fees in common fund cases, the customary fee award is typically a percentage of the fund.”
Barbosa, 2015 WL 4920292, at *11 (first citing Rosenbaum, 64 F.3d at 1445; then citing
Gottlieb, 43 F.3d at 482). Our court “typically applie[s] the percentage of the fund method when
awarding fees in common fund, FLSA collective actions.” Id. (citing Bruner, 2009 WL
2058762, at *7). “Fee awards in these cases have ranged from four per cent to 58 per cent of the
common fund and resulted in total fee awards ranging from a few thousand dollars to over five
million dollars.” Id. (citing Bruner, 2009 WL 2058762, at *7).
Plaintiffs’ counsel requests a fee award amounting to 40 percent of the Settlement Fund.
Plaintiffs’ counsel’s combined requested fee award and cost award is 41.5 percent of the
Settlement Fund. This percentage is consistent with the contingency fee agreement between
plaintiffs’ counsel and the representative plaintiff. And, it is within the customary fee range
which counsel claims to charge in similar matters. The court finds this factor weighs in favor of
6. Whether the Fee is Fixed or Contingent
When considering the sixth Johnson factor, courts ask whether plaintiff agreed to a fixed
or contingent fee because the percentage of the recovery agreed helps illuminate the attorneys’
fee expectations when counsel accepted the case, even though “[s]uch arrangements should not
determine the court’s decision.” Johnson, 488 F.2d at 718 (quoting Clark v. Am. Marine, Corp.,
320 F. Supp. 709, 711 (E.D. La. 1970)).
Here, the representative plaintiff (and the opt-in plaintiffs through their consent forms)
agreed to a fee arrangement where attorneys’ fees would be calculated as the greater of (i) a 40
percent contingency fee if the case resolved before any appeal, or (ii) an hourly based formula
based on plaintiffs’ counsel’s billed hours. Plaintiffs’ counsel seeks 40 percent of the Settlement
Fund (even though it is less than the hours billed amount) to promote settlement. The court finds
this factor favors approval.
7. Any Time Limitations Imposed
Plaintiffs’ counsel neglects to address this factor. The court thus assumes this factor
8. Amount Involved and the Results Obtained
Plaintiffs’ counsel secured a favorable result for their clients. The average payment to
each collective action member is about $1,500. Most plaintiffs had worked less than full-time
and for less than minimum wage, so this is a good outcome for them. And, defendants contested
their liability, so the ultimate outcome of this litigation (if it had not settled) remained in doubt.
This settlement avoids the uncertainty and rigors of trial and produces a favorable, certain result
for plaintiffs. This factor favors approval of the fee award.
9. Experience, Reputation, and Ability of the Attorneys
The court already has discussed the experience, reputation, and ability of the attorneys
above. As noted, plaintiffs’ counsel has experience litigating employment cases, particularly
FLSA cases. Mr. Byers and Mr. Rhodes, who are both experienced partners at a well-known
Kansas law firm, led this litigation. This factor favors of approval.
10. Undesirability of the Case
Plaintiffs’ counsel notes that contingency fee cases are inherently risky, and therefore
undesirable. But counsel also acknowledges that undesirability of the case is a neutral factor in
this analysis. The court agrees that the undesirability of the case is a neutral factor here because
the court has already taken into account the contingent fee arrangement, above.
11. Nature and Length of the Professional Relationship with the
Plaintiffs’ counsel doesn’t address this factor. But, as our court has explained, “[t]he
meaning of this factor . . . and its effect on the calculation of a reasonable fee has always been
unclear, and courts applying the Johnson factors typically state that this particular standard is
irrelevant or immaterial.” Barbosa, 2015 WL 4920292, at *12 (citing Bruner, 2009 WL
2058762, at *9 (further citation omitted)).
12. Awards in Similar Cases
Plaintiffs’ counsel requests $120,000 (40 percent of the Settlement Fund), plus $4,449.95
in costs and $300 in anticipated expenses for administering the settlement. A contingent fee of
40 percent is near the high end of fee awards that our court has approved. Plaintiffs’ counsel
cites only one District of Kansas case where the court approved a 40 percent contingency fee
from a common fund. See Payson v. Capital One Home Loans, LLC, No. 07-CV-2282-DWB,
2009 LEXIS 25418 (D. Kan. Mar. 26, 2009) (approving a 40 percent contingency fee, with the
“express admonition that this award should not be used in future cases as evidence that a 40%
fee is per se reasonable.”). Plaintiffs’ counsel argues that the circumstances, as in Payson,
justify a 40 percent contingency fee. Specifically, the contingency fee ($120,000) is only 67
percent of the lodestar value ($178,865.00).
The court agrees that a 40 percent fee is fair and reasonable in this context. Besides the
discount from the lodestar, the representative plaintiff and opt-in plaintiffs agreed to the higher
amount of an hourly rate or a 40 percent contingency fee. Based on its analysis of the lodestar
and Johnson factors, the court concludes that the attorneys’ fees requested are fair and
reasonable. The court thus grants plaintiffs’ request for approval of the proposed attorneys’ fees
D. Costs and Expenses
Plaintiffs’ counsel also requests $4,449.95 in costs and $300 to cover anticipated
expenses for administering the settlement. Costs include court filing fees, mediation fees, and
travel expenses. Counsel asserts it typically bills these costs to an hourly-paying client, and that
the costs represent counsel’s actual expenses without mark-up. Doc. 74-1. The court finds these
costs are fair and reasonable.
Finally, plaintiffs’ counsel requests $300 for settlement administration expenses. The
Settlement Agreement contemplates payments in four installments, so counsel requests
compensation for out-of-pocket expenses for postage and materials. The court finds this cost is
fair and reasonable. The court thus grants plaintiffs’ counsel’s request for costs ($4,449.95) and
The court grants, in part, plaintiffs’ Unopposed Motion to Grant Certification and
Approve Collective Action Settlement. Doc. 73. The court reduces plaintiffs’ counsel’s request
for a $15,000 service award for the representative plaintiff to a $5,000 award. The court grants
plaintiffs’ Unopposed Motion for Approval of Attorneys’ Fees in Conjunction with Settlement.
IT IS THEREFORE ORDERED BY THE COURT THAT plaintiffs’ Unopposed
Motion to Grant Final Certification and Approve Collective Action Settlement (Doc. 73) is
granted, in part, with a reduction in the service award for the representative plaintiff to $5,000.
IT IS FURTHER ORDERED THAT plaintiffs’ Unopposed Motion for Approval of
Award of Attorneys’ Fees in Conjunction with Settlement (Doc. 74) is granted.
IT IS SO ORDERED.
Dated this 11th day of October, 2019, at Kansas City, Kansas.
s/ Daniel D. Crabtree
Daniel D. Crabtree
United States District Judge
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?