Butler et al v. Directsat USA, LLC et al
Filing
328
MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 9/3/2015. (sat, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
JEFFRY BUTLER, ET AL.
:
v.
:
Civil Action No. DKC 10-2747
:
DIRECTSAT USA, LLC, ET AL.
:
MEMORANDUM OPINION
Presently pending and ready for review in this Fair Labor
Standards Act (“FLSA”) collective action case is the parties’
joint
motion
resolves
for
approval
Plaintiffs’
claims
of
a
settlement
for
unpaid
agreement
overtime
that
wages.
The
issues have been briefed, and the court now rules, no hearing
being deemed necessary.
Local Rule 105.6.
Because the proposed
settlement agreement represents a fair and reasonable resolution
of
a
bona
fide
FLSA
dispute,
the
parties’
motion
will
be
granted, and Plaintiff will be directed to file a petition for
attorneys’ fees and costs by September 18, 2015.
I.
Background
This
collective
action
was
brought
under
the
FLSA
by
Plaintiff Jeffry Butler (“Butler”) against Defendants DirectSAT
USA, LLC (“DirectSAT”), UniTek USA, LLC (“UniTek”), and UniTek
Global
Services,
DirectSAT
is
a
Inc.
(“UGS”)
subsidiary
of
“Defendants”).1
(collectively
UniTek
and
UGS,
and
provides
satellite installation services to DirecTV customers throughout
the country.
Butler is a technician who previously installed,
upgraded, and serviced DirecTV equipment at customer locations
in Maryland, Virginia, and the District of Columbia.
Butler
brought this suit against Defendants for their alleged failure
to pay overtime wages in violation of the FLSA and various state
wage laws.
As to the FLSA claim, Butler sought to represent a
collective
of
all
technicians
employed
by
Defendants
Virginia, Maryland, and the District of Columbia.
in
Conditional
certification of the FLSA collective was granted on April 10,
2012.
(ECF Nos. 65 and 66).
Defendants filed a motion to
decertify the collective on February 3, 2014, which was denied
on September 18, 2014.
presently
consists
of
(ECF Nos. 278 and 279).
named
Plaintiff
Butler
opt-in Plaintiffs (collectively “Plaintiffs”).
The collective
and
twenty-five
On May 12, 2014,
Defendants moved for summary judgment, which was granted in part
and denied in part on October 16, 2014.
(ECF Nos. 301 and 302).
Shortly after issuance of the summary judgment opinion, this
case
was
administratively
closed
1
because
Defendants
filed
a
This memorandum opinion includes only a brief recitation
of the facts. A full procedural history and factual description
of the dispute between the parties can be found in previous
opinions. (ECF Nos. 28, 65, 190, 278, and 301).
2
notice of suggestion of bankruptcy.
(ECF Nos. 311 and 312).
On
April 29, 2015, the undersigned granted Plaintiffs’ motion to
lift the bankruptcy stay.
(ECF Nos. 316 and 317).
On May 15, 2015, the case was referred to Magistrate Judge
Day (ECF No. 318), and the parties participated in a settlement
conference
with
Judge
Day
on
August
13,
2015.
The
parties
agreed to settle their claims on August 17, 2015, and filed an
executed settlement agreement (the “Agreement”) along with the
pending
motion
on
August
28,
2015.
(ECF
No.
327).
The
Agreement provides that, upon court approval, Defendants will
pay each individual plaintiff a specified amount that ranges
from
$54.36
worked
by
to
each
$4,197.78,
plaintiff
limitations period.
depending
during
on
the
the
three
number
year
of
weeks
statute
of
(ECF Nos. 327-1, at 3-5; 327-2, at 5-7).
Defendants also agree to pay the employer share of FICA for the
W-2
wages
portion
of
the
settlement
amounts
as
well
as
attorneys’ fees and costs, in an amount to be determined by this
court following Plaintiffs’ submission of a motion requesting
such fees and costs.
(ECF No. 327-1, at 5-6).
Defendants do
not admit liability, but agree to settle in order to avoid the
further costs of litigation.
settlement
amount,
(Id. at 8).
Plaintiffs
lawsuit with prejudice.
have
(Id. at 7).
3
In exchange for the
agreed
to
dismiss
this
II.
Analysis
Because Congress enacted the FLSA to protect workers from
the poor wages and long hours that can result from significant
inequalities
in
bargaining
power
between
employers
and
employees, the statute’s provisions are mandatory and, except in
two
narrow
circumstances,
are
generally
not
subject
to
bargaining, waiver, or modification by contract or settlement.
See Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 706 (1945).
Under the first exception, the Secretary of Labor may supervise
the payment of back wages to employees, who waive their rights
to seek liquidated damages upon accepting the full amount of the
wages
owed.
See
29
U.S.C.
§ 216(c).
Under
the
second
exception, a district court can approve a settlement between an
employer and an employee who has brought a private action for
unpaid
wages
pursuant
to
Section
216(b),
provided
that
the
settlement reflects a “reasonable compromise of disputed issues”
rather than “a mere waiver of statutory rights brought about by
an employer’s overreaching.”
Lynn’s Food Stores, Inc. v. United
States, 679 F.2d 1350, 1354 (11th Cir. 1982); see also Duprey v.
Scotts Co. LLC, 30 F.Supp.3d 404, 407-08 (D.Md. 2014).
Although the United States Court of Appeals for the Fourth
Circuit has not directly addressed the factors to be considered
in deciding motions for approval of such settlements, district
courts in this circuit typically employ the considerations set
4
forth by the Eleventh Circuit in Lynn’s Food Stores.
See, e.g.,
Duprey, 30 F.Supp.3d at 407-08; Lopez v. NTI, LLC, 748 F.Supp.2d
471, 478 (D.Md. 2010).
Pursuant to Lynn’s Food Stores, an FLSA
settlement generally should be approved if it reflects “a fair
and
reasonable
provisions.”
resolution
of
a
bona
fide
dispute
Lynn’s Food, 679 F.2d at 1355.
over
FLSA
Thus, as a first
step, the bona fides of the parties’ dispute must be examined to
determine
if
there
are
FLSA
issues
that
are
“actually
in
dispute.”
Lane v. Ko-Me, LLC, No. DKC-10-2261, 2011 WL 3880427,
at *2 (D.Md. Aug. 31, 2011) (citing Dees v. Hydradry, Inc., 706
F.Supp.2d 1227, 1241-42 (M.D.Fla. 2010)).
Then, as a second
step, the terms of the proposed settlement agreement must be
assessed
for
fairness
and
reasonableness,
weighing a number of factors, including:
discovery
that
has
taken
proceedings,
including
duration
the
of
place;
the
(3)
(2)
the
requires
“(1) the extent of
the
complexity,
litigation;
which
stage
expense
absence
of
and
of
the
likely
fraud
or
collusion in the settlement; (4) the experience of counsel who
have represented the plaintiffs; (5) the opinions of [] counsel
. . .; and (6) the probability of plaintiffs’ success on the
merits
and
the
amount
of
the
settlement
in
relation
to
the
potential recovery.”
Lomascolo v. Parsons Brinckerhoff, Inc.,
No.
WL
08–cv–1310,
2009
3094955,
5
at
*10
(E.D.Va.
Sept.
28,
2009);
see
also
Duprey,
30
F.Supp.3d
at
408
(citations
and
internal quotation marks omitted).
A.
Bona Fide Dispute
“In deciding whether a bona fide dispute exists as to a
defendant’s
pleadings
recitals
liability
in
in
the
the
under
case,
the
along
proposed
FLSA,
with
settlement
courts
the
representations
the
examine
and
agreement.”
Duprey,
30
F.Supp.3d at 408 (citing Lomascolo, 2009 WL 3094955 at *16-17).
Here, there is certainly a bona fide dispute.
The undersigned
has
disputes
previously
noted
Defendants’ liability.
that
there
are
genuine
(ECF No. 301, at 33-55).
as
to
Plaintiffs
allege, as discussed in greater detail in prior opinions, that
they are owed overtime compensation for hours worked performing
various
tasks,
but
Defendants
compensable.
Plaintiffs
liability,
and
Defendants
Thus,
pleadings,
the
assert
have
have
along
the
continued
not
with
tasks
to
admitted
parties’
are
assert
any
not
this
liability.
representations
in
court filings, establish that a bona fide dispute exists as to
Defendants’ liability for overtime payments under the FLSA.
B.
Upon
Fairness & Reasonableness
review
of
the
parties’
submissions
and
after
considering the relevant factors, see Duprey, 30 F.Supp.3d at
409,
the
Agreement
appears
to
be
a
fair
compromise of the parties’ bona fide dispute.
6
and
reasonable
The parties have engaged in extensive discovery on both
sides.
The parties have had sufficient opportunity to “obtain
and review evidence, to evaluate their claims and defenses[,]
and to engage in informed arms-length settlement negotiations
with the understanding that it would be a difficult and costly
undertaking to proceed to the trial of this case.”
2009 WL 3094955, at *11.
Lomascolo,
Additionally, the parties “acknowledge
no fraud or collusion in reaching” the Agreement (ECF No. 3272), and there is no evidence that the Agreement is the product
of fraud or collusion.
The Agreement appears to be the product
of negotiations between counsel, part of which was guided by
Judge Day.
Competent and experienced counsel on both sides
zealously and vigorously advocated for their clients throughout
this extended litigation.
As to the relationship between the amount of the settlement
and Plaintiffs’ potential recovery, the Agreement appears to be
fair and reasonable.
The parties assert that “the settlement is
based on the weeks worked by each Plaintiff during a three year
statute of limitations period; provides for 45 minutes of unpaid
overtime
per
week;
is
calculated
at
1½
times
hourly rate; and includes liquated damages.”
5).
their
regular
(ECF No. 327-2, at
It is unclear exactly how much Plaintiffs could recover at
trial, but the Agreement uses calculations most favorable to
Plaintiffs when possible (for example, three year statute of
7
limitations as opposed to two).
An individual plaintiff could
potentially recover a greater amount at trial if he were able to
prove he worked more than 45 minutes of unpaid overtime per
week, but each plaintiff would also risk recovering less than
the
settlement
amount
or
nothing
at
all
if
Defendants
were
successful in their defenses.
In light of the risks and costs to both sides in proceeding
with
this
lawsuit,
the
settlement
amounts
appear
to
be
a
reasonable compromise over issues that are actually in dispute.
C.
Attorneys’ Fees
Finally,
the
Agreement’s
provisions
regarding
attorneys’
fees and costs must also be assessed for reasonableness.
The
Agreement provides that – separate and apart from the payments
to Plaintiffs – Defendants will pay attorneys’ fees and costs
incurred by Plaintiffs, in an amount to be determined by the
court following Plaintiffs’ submission of a request for such
fees and costs.
Ultimately,
(ECF No. 327-1 ¶ 9).
of
course,
any
award
of
attorneys’
fees
to
Plaintiffs will turn on application of the traditional lodestar
methodology
factors.
calculation
is
The
multiplying
starting
the
point
number
expended by a reasonable hourly rate.
of
in
the
hours
lodestar
reasonably
Robinson v. Equifax Info.
Servs., LLC, 560 F.3d 235, 243 (4th Cir. 2009).
In addition, the
specific facts of the case are to be considered in calculating a
8
reasonable
Circuit
figure.
has
In
instructed
assessing
district
reasonableness,
courts
to
the
consider
Fourth
certain
factors, including:
(1) the time and labor expended; (2) the
novelty and difficulty of the questions
raised; (3) the skill required to properly
perform the legal services rendered; (4) the
attorney’s opportunity costs in pressing the
instant litigation; (5) the customary fee
for
like
work;
(6)
the
attorney’s
expectations
at
the
outset
of
the
litigation; (7) the time limitations imposed
by the client or circumstances; (8) the
amount
in
controversy
and
the
results
obtained; (9) the experience, reputation and
ability
of
the
attorney;
(10)
the
undesirability of the case within the legal
community in which the suit arose; (11) the
nature
and
length
of
the
professional
relationship between attorney and client;
and (12) attorneys’ fees awards in similar
cases.
Barber v. Kimbrell’s, Inc., 577 F.2d 216, 226 n.28 (4th Cir.
1978).
Thus, Plaintiffs are advised that, in submitting their
request for attorneys’ fees and costs, they should provide all
documentation
necessary
to
make
a
lodestar
determination,
including but not limited to (1) declarations establishing the
hours expended by counsel, broken down for each task; and (2)
support for the reasonableness of counsel’s hourly rate.
See
Plyler v. Evatt, 902 F.2d 273, 277 (4th Cir. 1990) (“In addition
to the attorney’s own affidavits, the fee applicant must produce
satisfactory specific evidence of the prevailing market rates in
9
the relevant community for the type of work for which he seeks
an award.”) (internal quotation marks omitted).
III. Conclusion
For the foregoing reasons, the joint motion for approval of
a settlement agreement will be granted.
A separate order will
follow.
/s/
DEBORAH K. CHASANOW
United States District Judge
10
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