Johnson et al v. Vector Transportation Co. et al
Filing
37
ORDER granting 35 Motion for Approval of Collective Settlement. Signed by District Judge Sharion Aycock on 12/11/2015. (psk)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF MISSISSIPPI
ABERDEEN DIVISION
BRET JOHNSON, MARGARET YELDELL,
AND MARNECIO DUFF, INDIVIDUALLY AND
ON BEHALF OF ALL OTHERS SIMILARLY SITUATED
VS.
PLAINTIFFS
NO. 1:15CV20-SA-DAS
VECTOR TRANSPORTATION CO. AND
JOSEPH D. ESTESS
DEFENDANTS
AGREED ORDER APPROVING JOINT MOTION FOR APPROVAL OF
COLLECTIVE ACTION SETTLEMENT, AND DISMISSING CASE
BEFORE THE COURT is the Joint Motion for Approval of Collective Action Settlement
(“Joint Motion”) submitted by the parties herein, and after having duly considered said Joint
Motion the Court finds that said Joint Motion is well taken and should be granted in its entirety.
It is, therefore,
ORDERED AND ADJUDGED AS FOLLOWS:
1. Vector Transportation Co. (“Vector”) is a freight brokerage company that manages the
transportation of various product and/or loads for shippers and manufacturers throughout the
continental United States. Vector employees are divided into two categories: (1) shipper support
and (2) carrier support. Shipper support employees are responsible for contacting and negotiating
with manufacturers and shippers in order to enter into formal agreements to manage their freight.
Carrier support employees are responsible for contacting carriers and trucking companies and
negotiating rates in order to transport the loads received from Vector customers. Plaintiffs are
former employees of Vector who worked as freight brokers in either shipper support or carrier
support during the three (3) year period preceding filing of the complaint in this cause on January
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23, 2015. The basis of Plaintiffs’ claims was an allegation that Vector failed to properly
compensate Plaintiffs for all their overtime hours in violation of the FLSA; Plaintiff sought
recovery of allegedly unpaid overtime hours, liquidated damages and attorney’s fees.
Defendants adamantly denied these allegations, and raised a number of defenses including but
not limited to the administrative exemption, statute of limitations and good faith.
2. On October 28, 2015, the parties participated in a full day settlement conference. This
was the parties’ initial attempt at alternative resolution, although the parties had privately
exchanged significant and detailed information in support of their claims and defenses and had
engaged in private settlement discussions. The parties understood the strengths and weaknesses
of their respective positions and the settlement conference proved successful as the parties
reached an agreement. The parties have agreed to a Release and Settlement Agreement and to its
terms; a non-executed Release and Settlement Agreement in final form is attached as Exhibit
“A” to the Joint Motion, being filed under seal to protect the confidentiality agreement of the
parties.
The court has reviewed the terms and conditions of said Release and Settlement
Agreement.
3. The Settlement proposed by the parties will encompass all claims asserted by the
Plaintiffs herein, as well as all claims which could have been asserted by said Plaintiffs against
Defendants. The sole exception to this broad release is that Plaintiff Margaret Yeldell has filed a
separate E.E.O.C. claim (which Vector has responded to) and which is presently pending before
the E.E.O.C. That claim is excluded from the scope of the settlement referenced herein.
4. It is anticipated that settlement will be completed within thirty (30) days after the date
of entry of this Agreed Order.
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5. The court finds that the Parties have carefully negotiated, in good faith and at armslength, a settlement of the claims of each of the Plaintiffs in order to achieve a fair and
reasonable compromise of the disputed issues of fact and law and in order to finally and fully
resolve their FLSA claims against the Defendants. Unlike settlements under Fed. R. Civ. P. 23,
FLSA settlements are not subject to a two-stage process of preliminary approval followed by
final approval, and no final fairness hearing is required. See Collins v. Sanderson Farms, Inc.,
586 F. Supp. 2d 714, 721-722 (E.D. La. 2008).
6. To evaluate approval of an FLSA settlement, the district court must evaluate whether
it is a fair and reasonable resolution of a bona fide dispute. Jarrard v. Southeastern Shipbuilding
Corporation, 163 F.2d 960, 961 (5th Cir. 1947). In Altier v. Worley Catastrophe Response, LLC
et al, 2012 U.S Dist. LEXIS 6391 *47 (E.D. La. 2012), that court reiterated that the “institution
of a federal court litigation followed by aggressive prosecution and strenuous defense
demonstrates the palpable bona fides” of a dispute. If a settlement in an FLSA lawsuit reflects a
“reasonable compromise over issues, such as computation of back wages that are actually in
dispute,” the District Court may approve the settlement in order to “promote the policy of
encouraging settlement of litigation.” Lynn’s Food Stores, Inc. v. U.S., 679 F.2d 1350, 1354
(11th Cir. 1982).
7. The 5th Circuit holds that the determination of the fairness of a settlement agreement is
left to the sound discretion of the Court, and an appellate court will not overturn the Court’s
decision absent a clear showing of abuse of that discretion. See Miller v. Republic Nat'l Life Ins.
Co., 559 F.2d 426, 429 (5th Cir. 1977); Reed v. General Motors Corp., 703 F.2d 170, 172 (5th
Cir. 1983).
8. Further, the Fifth Circuit has adopted a liberal threshold for settlement of FLSA
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claims, even permitting parties to privately settle claims without court approval. See Martin v.
Spring Break ’83 Productions, LLC, et al, 688 F.3d 247 (5th Cir. 2012); Sepulveda v. Southwest
Bus. Corp., 2009 U.S. LEXIS 93072 n.1 (W.D. Tex. 2009); Martinez v. Bohls Bearing Equip.
Co., 361 F.Supp.2d 608 (W.D. Tex. 2005). The Fifth Circuit has repeatedly held that settlements
“will be upheld whenever possible because they are a means of amicably resolving doubts and
preventing lawsuits.” Miller, 559 F.2d at 428 (quoting Pearson v. Ecological Sci. Corp., 559 F.2d
171, 176 (5th Cir. 1975)). “Settlement agreements have always been a favored means of
resolving disputes" in the Fifth Circuit. Thomas v. State, 534 F.2d 613, 615 (5th Cir. 1976); see,
e.g., United States v. City of Miami, 614 F.2d 1322, 1334 (5th Cir. 1980) ("Settlement of
lawsuits by agreement has always been favored"). This principal is no different in the context of
an FLSA claim. See Vargas v. HEB Grocery Co., LP, et al, 2012 U.S. Dist. LEXIS 132030 *15
(W.D. Tex. 2012) (citing Martin and holding that opt ins who had previously participated in a
settlement of their claims in other proceedings had “waived any FLSA claims”).
9. The court expressly finds that in this case, a bona-fide-dispute exists related to both
Defendants’ purported liability and the amount of Plaintiffs’ pay potentially owed under the
FLSA. Specifically, Plaintiffs alleged that they were not compensated for all of their overtime
hours worked, including time spent “on call”. Defendants vehemently deny that Plaintiffs are
entitled to any overtime compensation, assert that Plaintiffs qualify for an administrative
exemption, and deny that they failed to appropriately compensate Plaintiffs. Defendants further
dispute that Plaintiffs are entitled to overtime compensation for any alleged time spent “on call”
based on the facts and requirements of Plaintiff’s employment and the “waiting to be engaged”
and “homeworker’s exception”, among other defenses. Given the nature of the parties’ various
claims and defenses, the court finds that the proposed settlement constitutes a fair and reasonable
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compromise of all issues in this case.
10. A “strong initial presumption” of fairness arises where the parties can show that “the
settlement was reached after arm’s-length negotiations, that the proponents’ attorneys have
experience in similar cases, and that there has been sufficient discovery to enable counsel to act
intelligently.” See City P’ship Co. v. Atlantic Acquisition Ltd. P’ship, 100 F. 3d 1041, 1043 (1st
Cir. 1996). There is a “strong presumption” in favor of finding such arms-length settlements to
be fair. Cotton v. Hinton, 559 F.2d 1326, 1331 (5th Cir. 1977).
The non-exhaustive list of
factors courts typically consider in evaluating a proposed settlement for fairness include the
strength of plaintiffs’ case; the risk, expense, complexity, and likely duration of further litigation;
the extent of the discovery completed; the stage of the proceedings; and the experience and
views of counsel. See Trinh v. JPMorgan Chase & Co., No. 07-CV-01666 W(WMC), 2009 WL
532556, at *1 (S.D. Cal. Mar. 3, 2009) (citing Torrisi v. Tucson Elec. Power Co., 8 F.3d 1370,
1375 (9th Cir. 1993)). Here, the court finds that each of these factors are met.
11. In this case, Defendants’ liability for overtime wages under the FLSA was a hotly
contested issue. Defendants contend that Plaintiffs were compensated appropriately. If this case
were to move forward without an agreement between the parties, the parties estimate that the
expenses of litigation would be hundreds of thousands of dollars. If this matter did not settle the
parties will be required to engage in lengthy additional litigation including discovery and expert
retention. The court finds that approving this agreement satisfies judicial economy and fairness.
12. Additionally, this agreement has been reached after the parties have engaged in
extensive exchange of information and factual investigations. Significant documents have been
exchanged and reviewed. Counsel has interviewed many witnesses. As such, counsel for the
parties have extensive information from which to evaluate the factual and legal basis of the
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claims. With this information, the court finds that the parties negotiated a fair, arms-length
settlement agreement.
13.
At all times during this case, Plaintiffs and Defendants have been fully and
adequately represented by counsel with prior experience litigating overtime wage claims under
the FLSA. Where experienced counsel representing the interested parties have negotiated the
settlement at arm’s length, a strong presumption exists that the compromise is fair and
reasonable. United States v. Tex. Educ. Agency, 679 F.2d 1104, 1108 (5th Cir. 1982); Murillo v.
Texas A&M Univ. Sys., 921 F. Supp. 443, 445 (S.D. Tex. 1996).
The Fifth Circuit has
recognized that courts must rely to a large degree on the judgment of competent counsel. Reed v.
General Motors Corp., 703 F.2d 170, 172 (5th Cir. 1983).
The court finds that is exactly what occurred here. Counsel for the parties extensively
negotiated this agreement with the help of the Court. They believe this agreement is a reasonable
compromise of these issues. The Parties uniformly believe they have reached a fair and equitable
resolution of this matter given the facts of this case and the legal issues involved, and the court
agrees.
14. The court further finds that the proposed distribution to each of the Plaintiffs is fair
and equitable. The parties have agreed to a total settlement payment by Defendants as set forth in
the separate Release and Settlement Agreement filed under seal.
Plaintiffs’ counsel shall be
paid attorneys’ fees and expenses from the settlement amount in an amount set forth in the
Release and Settlement Agreement, and the remaining sums will be paid to Plaintiffs (in a
manner agreed upon by Plaintiffs and their counsel) to resolve their claims. The court finds that
the settlement amount agreed to by the parties is significant, and is well within the range of a fair
and reasonable recovery for the Plaintiffs.
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15. The court finds that Plaintiffs’ recovery is substantial, especially as its adequacy
must be judged as “a yielding of absolutes and an abandoning of highest hopes . . . Naturally, the
agreement reached normally embodies a compromise; in exchange for the saving of cost and
elimination of risk, the parties each give up something they might have won had they proceeded
with litigation. . . .” Officers for Justice v. Civil Service Comm’n, 688 F. 2d 615, 624 (9th Cir.
1982). In addition, the settlement provides for payment to the Plaintiffs now, rather than a
speculative payment many years down the road. See City of Detroit v. Grinnell Corp., 495 F.2d
448, 463 (2d Cir. 1974).
16. The court expressly finds that this agreement constitutes a “fair and reasonable
compromise of a bona fide dispute.” Prater v. Commerce Equities Mgmt Co., 2008 WL 5140045
at *2 (S.D. Tex. Dec. 8, 2008). As such, the court approves this settlement and the Release and
Settlement Agreement attached to the Joint Motion as Exhibit “A” and filed under seal.
IT IS THEREFORE ORDERED AND ADJUDGED that the settlement is reasonable,
fair, was reached after extensive arms-length negotiations between the parties, and will
efficiently resolve all issues in this matter and avoid protracted, expensive litigation.
IT IS FURTHER THEREFORE ORDERED AND ADJUDGED THAT:
1.
The court approves the proposed settlement as set forth in the Joint Motion and in
the Release and Settlement Agreement as fair and reasonable and in the best interests of the
Plaintiffs;
2.
The court approves the Release and Settlement Agreement attached to the Joint
Motion as Exhibit “A” and filed under seal, and requires each Plaintiff to execute said Release
and Settlement Agreement which releases their claims against Defendants;
3.
The court orders Defendants to tender the settlement proceeds to counsel for
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Plaintiffs no later than thirty (30) days from the date of entry of this Agreed Order; and
4.
The court hereby dismisses Plaintiffs’ claims with prejudice, in exchange for
Defendants’ payment of the total settlement sum as set forth in the Release and Settlement
Agreement, which is inclusive of all taxes or other mandatory deductions. The
court
retains
jurisdiction of this matter only to enforce the terms of the settlement, if necessary.
SO ORDERED THIS this the 11th of December, 2015.
/s/ Sharion Aycock_________
U.S. DISTRICT JUDGE
AGREED TO AS TO FORM AND CONTENT BY:
By: /s/Brad Dillard
Attorneys for Defendants
MB Number 10114
By:
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/s/Nick Norris
Attorney for Plaintiffs
MB Number 101574
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