Walker v. Corrections Corporation of America

Filing 135

ORDER re 123 Stipulation of Dismissal filed by Corrections Corporation of America, CCA of Tennessee, LLC. Signed by District Judge Sharion Aycock on 2/9/2016. (psk)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF MISSISSIPPI
GREENVILLE DIVISION
JAMES WALKER, ET AL.
V.

PLAINTIFFS
CAUSE NO.: 4:14CV142-SA-SAA

CORRECTIONS CORPORATION OF AMERICA, and
CCA OF TENNESSEE, LLC

DEFENDANTS

ORDER ON STIPULATED SETTLEMENT
The parties have filed a joint Stipulation to Dismiss Claims of Settling Plaintiffs with
Prejudice and to Drop Settling Plaintiffs Pursuant to Rules 21 and 41 of the Federal Rules of
Civil Procedure [123]. In particular, the parties note that there is a “bona fide dispute regarding
the merits of Settling Plaintiffs’ claims in the action that they were misclassified as ‘exempt’
from the overtime provisions of the FLSA during their employment as Assistant Shift
Supervisors.” Such stipulation does not ask for the Court’s oversight of the settlement, but
requests that the Court dismiss Plaintiffs’ Assistant Shift Supervisor claims with prejudice and
terminate those Plaintiffs as party opponents.
The general rule is that FLSA claims cannot be waived. See Brooklyn Sav. Bank v.
O'Neil, 324 U.S. 697, 714, 65 S. Ct. 895, 89 L. Ed. 1296 (1945). Accordingly, many courts have
held that, in the absence of supervision by the Department of Labor or scrutiny from a court, a
settlement of an FLSA claim is prohibited. See, e.g., Lynn's Food Stores, Inc. v. United States,
679 F.2d 1350, 1355 (11th Cir. 1982) (“Other than a section 216(c) payment supervised by the
Department of Labor, there is only one context in which compromises of FLSA back wage or
liquidated damage claims may be allowed: a stipulated judgment entered by a court which has
determined that a settlement proposed by an employer and employees, in a suit brought by the

employees under the FLSA, is a fair and reasonable resolution of a bona fide dispute over FLSA
provisions.”) (emphasis added).
Nevertheless, the Fifth Circuit has excepted, from this general rule, unsupervised
settlements that are reached due to a bona fide FLSA dispute over hours worked or compensation
owed. See Martin v. Spring Break '83 Prods, L.L.C., 688 F.3d 247, 255 (5th Cir. 2012). In doing
so, that Court reasoned that such an exception would not undermine the purpose of the FLSA
because the plaintiffs did not waive their claims through some sort of bargain but instead
received compensation for the disputed hours. Id. at 257. The Martin exception does not apply to
the instant case because the stipulation here concerns a “compromise of guaranteed FLSA
substantive rights themselves,” which has not been approved for unsupervised settlement. See
Bodle v. TXL Mortg. Corp., 788 F.3d 159, 164-65 (5th Cir. 2015).
Accordingly, if the parties wish to settle their claims, a Motion for Settlement must be
filed and the terms must be disclosed (at least in camera) and approved by the Court.
SO ORDERED, this the 9th day of February, 2016.
/s/ Sharion Aycock_________
U.S. DISTRICT JUDGE

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