Geist v. Handke et al

Filing 85

MEMORANDUM AND ORDER granting the parties' Joint 82 Motion to Approve Settlement. Signed by District Judge Holly L. Teeter on 11/28/2018. (md)

Case 2:17-cv-02317-HLT-JPO Document 85 Filed 11/28/18 Page 1 of 5

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
GEOFFREY GEIST,
Plaintiff,
v.
CASE NO. 2:17-CV-02317-HLT
AARON HANDKE d/b/a FOXPOINT
TRUCKS, LLC, et al.,
Defendants.
MEMORANDUM AND ORDER
Plaintiff Geoffrey Geist brought suit against Aaron Handke d/b/a Foxpoint Trucks, LLC
and OTRLeasing, LLC (collectively “Defendants”) to recover unpaid wages, liquidated damages,
costs and attorney fees under the Fair Labor Standards Act (“FLSA”) due to Defendants’ alleged
misclassification of Plaintiff as an exempt employee. Plaintiff also brought a claim for retaliation
under the FLSA.1 The parties have reached a settlement agreement. This matter is before the Court
on their Joint Motion to Approve FLSA Settlement, filed November 13, 2018. Doc. 82. Because
the Court finds that the proposed settlement agreement for the misclassification claim is fair and
reasonable, the motion is granted.
I.

ANALYSIS
When employees file suit against their employer to recover wages under the FLSA, the

parties must present any proposed settlement to the district court for review and a determination
of whether the settlement is fair and reasonable. McCaffrey v. Mortg. Sources, Corp., 2011 WL
32436, at *2 (D. Kan. 2011); see also Lynn’s Food Stores v. United States, 679 F.2d 1350, 1353

1

Plaintiff’s FLSA retaliation claim is not subject to the Court’s approval. See Dorner v. Polsinelli, White, Vardeman
& Shalton, P.C., 856 F. Supp. 1483, 1488-89 (D. Kan. 1994).

Case 2:17-cv-02317-HLT-JPO Document 85 Filed 11/28/18 Page 2 of 5

(11th Cir. 1982). The provisions of the FLSA are not subject to private negotiation between
employers and employees. See Lynn’s Food Stores, 679 F.2d at 1352; Dees v. Hydradry, Inc., 706
F. Supp. 2d 1227, 1234 (M.D. Fla. 2010); Collins v. Sanderson Farms, Inc., 568 F. Supp. 2d 714,
718 (E.D. La. 2008). Requiring court approval of FLSA settlements thus effectuates the purpose
of the FLSA—to “protect certain groups of the population from substandard wages and excessive
hours . . . due to the unequal bargaining power as between employer and employee,” which may
“endanger[ ] national health and well-being and the free flow of goods in interstate commerce.”
Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 706 (1945). To approve an FLSA settlement, the
district 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; Lynn’s Food Stores,
679 F.2d at 1354.
A.

Bona Fide Dispute

Parties requesting approval of an FLSA settlement must provide the district court with
sufficient information to determine whether a bona fide dispute exists. See Dees, 706 F. Supp. 2d
at 1241. To meet this obligation, the parties should provide the following information: (1) a
description of the nature of the dispute (e.g., a disagreement over coverage, exemption or
computation of hours worked or rate of pay); (2) a description of the employer’s business and the
type of work performed by the employee; (3) the employer’s reasons for disputing the employee’s
right to a minimum wage or overtime; (4) the employee’s justification for the disputed wages; and
(5) if the parties dispute the computation of wages owed, each party’s estimate of the number of
hours worked and the applicable wage. McCaffrey, 2011 WL 32436, at *2.
Here, there is a bona fide dispute about whether Plaintiff’s underwriting job duties were
exempt from the FLSA’s overtime requirements. The Court previously conducted an exhaustive
2

Case 2:17-cv-02317-HLT-JPO Document 85 Filed 11/28/18 Page 3 of 5

analysis for summary judgment purposes on whether Defendants misclassified Plaintiff as exempt
under the FLSA. Doc. 59. Specifically, the Court analyzed the nature of the dispute, the nature of
Defendants’ business, the type of work that Plaintiff performed, and the reasons Defendants
dispute Plaintiff’s right to additional wages. Id.
Plaintiff contends that he is entitled to no more than approximately $21,899.99,
representing 208 hours of claimed overtime for which he was not paid. Defendants dispute that
Plaintiff is owed any amount for unpaid overtime because his job duties were exempt. And, even
if his job duties were not exempt, Defendants assert that Plaintiff worked much less than alleged,
such that his claimed amount due was overstated. Based on this record, the Court finds that the
parties have a bona fide dispute.
B.

Fair and Reasonable

To determine whether a proposed settlement under the FLSA is fair and equitable to the
parties, courts regularly look at the fairness factors that apply to a proposed class action settlement
under Rule 23(e). Tommey v. Comput. Scis. Corp., 2015 WL 1623025, at *2 (D. Kan. 2015). These
factors include (1) whether the proposed settlement has been fairly and honestly negotiated;
(2) whether serious questions of law and fact exist that place 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. Id. In addition to these factors, courts must also ensure that the
settlement does not undermine the purpose of the FLSA to protect employees’ rights from
employers who generally wield superior bargaining power. Valdez v. Se. Kan. Indep. Living Res.
Ctr., Inc., 2011 WL 1231159, at *3 (D. Kan. 2011).
Here, evidence suggests that the parties fairly and honestly negotiated the settlement. Also,
the parties believe that the settlement is fair and reasonable. The parties have agreed to settle
3

Case 2:17-cv-02317-HLT-JPO Document 85 Filed 11/28/18 Page 4 of 5

Plaintiff’s FLSA misclassification claim for a total of $8,855.00. This amount includes attorney
fees, attorney expenses, wages, and liquidated damages attributed to Plaintiff’s misclassification
claim. Notably, this amount reflects a portion of Plaintiff’s total claimed damages. Based on the
discovery and sworn testimony in this case, Plaintiff’s damages attributable to his FLSA
misclassification claim represent 7.7% of the total damages that he is claiming in this lawsuit.
The parties dispute the factual basis of Plaintiff’s claims, but this dispute does not
undermine the fairness or reasonableness of the settlement. Moreover, the value of immediate
recovery would likely outweigh the mere possibility of recovery after protracted litigation. The
record reflects that the settlement is consistent with the purpose of the FLSA. The record does not
reflect a history of FLSA non-compliance by Defendants nor any likelihood that Plaintiff’s
circumstance will recur. The Court therefore finds that the settlement is fair and reasonable.
C.

Reasonable Attorney Fees

To determine whether the negotiated amount of attorney fees is reasonable, courts examine
whether plaintiff’s counsel are adequately compensated and ensure that a conflict of interest does
not taint the amount the plaintiff receives under the agreement. Valdez, 2011 WL 1231159 at *3.
Similar to the manner in which the parties allocated the settlement amount as settlement of
Plaintiff’s FLSA misclassification claim, the amount of attorney fees allocated in the settlement
agreement towards Plaintiff’s FLSA misclassification claim represents 7.7% of the total settlement
amount. Plaintiff’s counsel seeks $3,336.65 in attorney fees. The amount of attorney fees allocated
to Plaintiff’s counsel for settlement of Plaintiff’s FLSA misclassification claim under the
settlement agreement represents 40% of the total settlement proceeds on that claim. Under the
specific circumstances of this case, the amount of attorney fees allocated under the settlement
agreement are reasonable.

4

Case 2:17-cv-02317-HLT-JPO Document 85 Filed 11/28/18 Page 5 of 5

Additionally, Plaintiff’s counsel also incurred $513.37 in out-of-pocket costs and expenses
attributable to Plaintiff’s FLSA misclassification claim (i.e., this amount represents 7.7% of the
total costs Plaintiff’s counsel incurred to prosecute Plaintiff’s claims). This amount was also
allocated under the parties’ settlement agreement as settlement of Plaintiff’s claim for costs
incurred in prosecuting his FLSA misclassification claim.
The Court concludes $3,850.02 in attorney fees and costs is a reasonable amount in light
of the totality of the litigation. The record contains no suggestion that counsel have a conflict of
interest, and the Court finds that the fee award should be approved.
II.

CONCLUSION
For the reasons discussed above, the Court finds that the proposed settlement agreement is

fair and reasonable.
THE COURT THEREFORE ORDERS that the parties’ Joint Motion to Approve
Settlement (Doc. 82) is GRANTED.
IT IS SO ORDERED.
DATED: November 28, 2018

/s/ Holly L. Teeter
HOLLY L. TEETER
UNITED STATES DISTRICT JUDGE

5