Hobbs et al v. Tandem Evironmental Solutions, Inc. et al

Filing 71

MEMORANDUM AND ORDER sustaining the parties' 70 Joint Stipulation Regarding Settlement and Response To This Court's Order Of September 27, 2012, construed as a supplement to and renewal of the parties' 68 Second Joint Motion for Court Approval of Settlement and Release Agreement. The Court approves the parties' settlement and dismisses the case. Signed by Chief Judge Kathryn H. Vratil on 10/4/2012. (mg)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
MELISSA HOBBS and CIARA MARTIN,
individually and on behalf of similarly
situated persons,

)
)
)
)
Plaintiffs,
)
)
v.
)
)
TANDEM ENVIRONMENTAL SOLUTIONS,
)
INC. a/k/a TESCO and BRAD DUGGINS,
)
)
Defendants.
)
___________________________________________ )

CIVIL ACTION
No. 10-1204-KHV

MEMORANDUM AND ORDER
This matter is before the Court on the parties’ Joint Stipulation Regarding Settlement &
Response To This Court’s Order Of September 27, 2012 (Doc. #70) filed October 2, 2012, which the
Court construes as a supplement to and renewal of the parties’ Second Joint Motion For Court Approval
Of Settlement And Release Agreement (Doc. #68) filed July 2, 2012.
On behalf of themselves and others similarly situated, plaintiffs brought claims under the Fair
Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., for unpaid wages and overtime, among other
things. Before the Court provisionally certified a collective action, Matthew Zenner and John Humbolt
filed a “Consent To Opt In” by which they consented to “opt in and become a party plaintiff in the
above-captioned matter as a member of the class of individuals described in the complaint.” Consent
To Opt In (Doc. #5) filed June 29, 2010 (Zenner); Consent To Opt In (Doc. #3) filed June 28, 2010
(Humbolt). Per the parties’ stipulation, the Court treats Zenner and Humbolt as party plaintiffs.
On February 23, 2011, the Court provisionally certified the following collective action: “TESCO
office cleaners employed by its Wichita branch, on or after July 1, 2009, whom defendants required to
clock out while traveling between job sites, did not pay for hours worked and did not pay overtime.”

Memorandum And Order (Doc. #32). Four former TESCO employees – Joyce Cooper, Laura Johnson,
Becky Marsh and Karen Morphew – then filed a “Consent To Join,” each of which stated that the
employee gave her “consent to be a party plaintiff” in this case. Consent To Join (Doc. #42) filed May
20, 2011 (Cooper); Consent To Join (Doc. #40) filed May 17, 2011 (Johnson); Consent To Join
(Doc. #38) filed March 22, 2011 at 1 (Marsh); id. at 2 (Morphew). Per the parties’ stipulation, the Court
treats these employees as members of the provisionally certified collective action.
The parties subsequently mediated the case and settled. Id. at 3. As required by the FLSA, they
then asked the Court to approve the settlement and release agreement. Joint Motion For Court Approval
Of Settlement And Release Agreement (Doc. #63) filed May 1, 2012. The Court overruled the parties’
motion because they had not requested final collective action certification, and had not provided
sufficient information to determine whether plaintiffs and class members were similarly situated or
whether the settlement was fair and reasonable. Memorandum And Order (Doc. #66) filed June 4, 2012.
After the Court overruled the parties’ first motion for settlement approval, plaintiffs withdrew
their request for collective action certification. Withdrawal Of Request For Collective Action
Certification (Doc. #67) filed June 29, 2012. The withdrawal stated that Morphew and Cooper were not
eligible to be in the class because they did not meet the class definition, Johnson should be dismissed
without prejudice because she could not be located and Marsh would not be affected by the withdrawal
because the proposed settlement gave her the full amount of overtime compensation she claimed. Id.
The parties agree that “[i]t is clear that plaintiffs did not have a viable collective action case.” Second
Joint Motion For Court Approval Of Settlement And Release Agreement (Doc. #68) at 4. The Court
therefore does not grant final collective action certification to the class which it previously provisionally
certified. The parties renew their request for settlement approval. Id. at 1; see also Joint Stipulation

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Regarding Settlement & Response To This Court’s Order Of September 27, 2012 (Doc. #70) (which the
Court construes as renewal of request for settlement approval).
I.

Settlement Approval
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 of
whether the settlement is fair and reasonable. McCaffrey v. Mortg. Sources, Corp., No. 08-2660-KHV,
2011 WL 32436, at *2 (D. Kan. Jan. 5, 2011); see Lynn’s Food Stores, Inc. v. United States, 679 F.2d
1350, 1353 (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 (citing Brooklyn Sav. Bank v.
O’Neil, 324 U.S. 697, 706-07 (1945)); 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).
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. The
settlement agreement before the Court is between defendants TESCO and Brad Duggins, and plaintiffs
Hobbs, Martin, Humbolt and Zenner. Marsh is also party to the agreement.1
A.

Bona Fide Dispute

Here, a bona fide dispute exists as to whether plaintiffs are entitled to recover unpaid wages and
overtime for the time spent traveling from one location to another to complete janitorial duties.
Defendants dispute that plaintiffs are entitled to recover for travel time either because plaintiffs did not

1

Because the Court declined to grant final collective action certification, Marsh no longer
has any claim in this case. However, she will be compensated under the settlement agreement.
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travel, plaintiffs’ travel time was minimal or defendants paid plaintiffs for travel time. Defendants
dispute plaintiffs’ calculation of unpaid wages and overtime. Based on findings in a proceeding before
the U.S. Department of Labor, defendants also contend that plaintiffs claims are barred by res judicata.
In addition, defendants dispute whether Martin made a report to the Department of Labor and whether
Humbolt is a non-exempt employee under the FLSA.
B.

Fair And Equitable Settlement

To determine whether a proposed settlement under Section 216(b) is fair and equitable to all
parties, courts have regularly applied the same fairness factors as apply to a proposed class action
settlement under Rule 23(e), Fed. R. Civ. P., which include (1) whether the proposed settlement was
fairly and honestly negotiated, (2) whether serious questions of law and fact exist which 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. Gambrell v. Weber Carpet, Inc., No. 10-2131-KHV,
2011 WL 162403, at *3 (D. Kan. Jan. 19, 2012) (citing McCaffrey, 2011 WL 32436, at *5).
The Court also considers various contextual factors pertinent to the statutory purpose of the
FLSA, some of which overlap with the factors listed above. These “contextual” factors include
(1) defendants’ business, (2) the type of work performed by plaintiffs, (3) the facts underlying plaintiffs’
reasons for justifying their claims, (4) defendants’ reasons for disputing plaintiffs’ claims, (5) the
relative strength and weaknesses of plaintiffs’ claims, (6) the relative strength and weaknesses of
defendants’ defenses, (7) whether the parties dispute the computation of wages owed, (8) each party’s
estimate of the number of hours worked and the applicable wage and (9) the maximum amount of
recovery to which plaintiffs claim they would be entitled if they successfully proved their claims.

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McCaffrey, 2011 WL 32436, at *5 (citing Dees, 706 F. Supp.2d at 1243-44).
As noted above, questions of law and fact exist with respect to plaintiffs’ claims and defendants’
defenses. The parties acknowledge that these unresolved legal and factual issues place the ultimate
outcome of the litigation in doubt. Moreover, the settlement agreement is the product of arms-length
negotiations during mediation with an experienced mediator. The Court sees no evidence of fraud or
collusion.
With respect to the probability of plaintiffs’ success on the merits, and the amount of settlement
in relation to potential recovery, plaintiffs’ counsel states that “[t]he value of an immediate recovery
outweighs the mere possibility of future relief after protracted and expensive litigation.” Second Joint
Motion For Court Approval Of Settlement And Release Agreement (Doc. #68) at 4. Plaintiffs in
question – Hobbs, Martin, Humboldt and Zenner – obviously find the settlement fair and reasonable,
because they have agreed to it.
Under the FLSA, plaintiffs would be entitled to liquidated damages in addition to compensation
for back pay if they prevailed at trial. Nevertheless, plaintiffs and their counsel agree that obtaining
immediate relief through the settlement agreement outweighs the possibility of recovering more after
prolonged litigation. If plaintiffs were to prevail, they estimate that each plaintiff would be entitled to
the following amounts for unpaid wages and/or overtime:
Melissa Hobbs:
Ciara Martin:
John Humbolt:
Matthew Zenner:

$7,650.00
$862.00
$4,650.00
$288.00

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The settlement provides compensation as follows:
Melissa Hobbs:
Ciara Martin:
John Humbolt:
Matthew Zenner:
Becky Marsh:

$5,000.00
$3,000.00
$2,512.00
$288.00
$92.00

The total settlement amount, excluding attorney fees, is $10,892.00.2 In light of all the circumstances,
and for the reasons discussed above, the Court finds that the settlement is fair and reasonable.
C.

Attorney Fees And Costs

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); Gambrell, 2012 WL 162403, at *3. Though the Court
has discretion to determine the amount and reasonableness of the fee, the FLSA fee award is mandatory.
Gambrell, 2012 WL 162403, at *3 (citing Wright v. U-Let-Us Skycap Serv., Inc., 648 F. Supp. 1216,
1218 (D. Colo. 1986)). To determine whether attorney fees are reasonable, the Court looks to the
lodestar – that is, the number of hours worked multiplied by the prevailing hourly rates, Perdue v. Kenny
A. ex rel. Winn, 130 S. Ct. 1662, 1669 (2010) – and the 12 factors listed in Johnson v. Ga. Highway
Express, Inc., 488 F.2d 714 (5th Cir. 1974). See Rosenbaum v. MacAllister, 64 F.3d 1439, 1445 (10th
Cir. 1995); Fulton v. TLC Lawn Care, Inc., No. 10-2645-KHV, 2012 WL 1788140, at *5 (D. Kan. May
17, 2012).
Plaintiffs seek $9,500.00 in attorney fees and costs. To support their request, plaintiffs have
submitted a time sheet from the Eron Law Office. The time sheet indicates that lead counsel, Joseph

2

The parties do not explain why Martin is the only one receiving more than her estimated
unpaid wages and overtime. Presumably, this is because only Martin has a retaliation claim in addition
to her claim for unpaid wages and overtime. See Complaint (Doc. #1) filed June 24, 2010.
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Cassell, spent 47.4 hours on the case over nearly two years at a rate of $210 per hour. His assistant
spent 17.3 hours at a rate of $65 per hour. Under these times and rates, the total fee equals $11,078.50.
The total costs are $504.38. The costs, which the Court finds to be reasonable, consist of filing and
service fees, and copying and postage costs. Together, the fees and costs equal $11,582.88 – roughly
$2,000.00 more than the amount of fees and costs which plaintiffs seek.
Plaintiffs’ motion, however, provides no basis for determining whether the hourly rates which
Cassell and his assistant billed are reasonable. In a recent FLSA case where plaintiffs did not adequately
support the requested hourly rate, the Court found that $168.58 was a reasonable hourly fee for attorneys
who work on wage and hour cases. Wilhelm v. TLC Lawn Care Inc., No. 07-2465-KHV, 2009 WL
57133, at *5 (D. Kan. Jan. 8, 2009); see also Gardner v. Sprint/United Mgmt. Co., No. 08-2559, 2009
WL 1917408, at *3 (D. Kan. July 2, 2009). Reducing the hourly rate of Cassell’s assistant by a
proportional amount, a reasonable hourly rate for her is $52.18. Based on these hourly rates, the lodestar
is $8,893.41. The total amount of reasonable fees and costs is $9,397.79. This amount is close to the
$9,500.00 in fees and costs on which the parties agreed.
The 12 Johnson factors, which the Court must also consider, are as follows: (1) time and labor
required, (2) novelty and difficulty of question presented by 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. Rosenbaum, 64 F.3d at 1445; Johnson, 488
F.2d at 717-19.

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Having considered these factors and the lodestar calculated above, the Court finds that plaintiffs’
request of $9,500.00 in attorney fees and costs is reasonable. The Court therefore approves the
settlement agreement between defendants TESCO and Brad Duggins, and plaintiffs Hobbs, Martin,
Humbolt and Zenner.
IT IS THEREFORE ORDERED that the parties’ Joint Stipulation Regarding Settlement &
Response To This Court’s Order Of September 27, 2012 (Doc. #70) filed October 2, 2012, which the
Court construes as a supplement to and renewal of the parties’ Second Joint Motion For Court Approval
Of Settlement And Release Agreement (Doc. #68) filed July 2, 2012, be and hereby is SUSTAINED.
The Court approves the parties’ settlement and dismisses the case.
Dated this 4th day of October, 2012 at Kansas City, Kansas.

s/ Kathryn H. Vratil
KATHRYN H. VRATIL
United States District Judge

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