Belmer et al v. Wells Fargo Bank, N.A.
Filing
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MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that the parties' joint motion for settlement approval and dismissal with prejudice is GRANTED. (Doc. No. 34 .) A separate Order of Dismissal shall accompany this Memorandum and Order. Signed by District Judge Audrey G. Fleissig on July 8, 2015. (BRP)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
AARON BELMER, et al.,
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Plaintiffs,
v.
WELLS FARGO BANK, N.A.,
Defendant.
No. 4:14-CV-00435-AGF
MEMORANDUM AND ORDER
This matter is before the Court on the parties’ joint motion (Doc. No. 34) for
settlement approval and dismissal with prejudice. The Court held a hearing on the motion
on July 7, 2015. For the reasons discussed at the hearing and set forth below, the motion
shall be granted, and this action shall be dismissed with prejudice, in accordance with the
terms of the parties’ settlement agreements.
BACKGROUND
Plaintiffs, five former home mortgage consultants (“HMCs”) employed by
Defendant, filed this action on March 10, 2014, alleging that Defendant violated the Fair
Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201, et seq., by failing to pay them for
overtime. Plaintiffs assert only individual claims, and do not seek to represent similarly
situated individuals.
In their single-count complaint, Plaintiffs allege that, at all relevant times, they
performed non-exempt duties, as that term is defined under the FLSA; that to successfully
perform their jobs, they needed to work more than 40 hours per week; that Defendant was
aware they worked in excess of 40 hours per week; and that Plaintiffs were instructed not to
record overtime. Plaintiffs’ complaint requests compensatory damages, liquidated damages,
and attorneys’ fees and costs.
Defendant denies these allegations and contends that Plaintiffs were instructed
through documents and training to record all hours worked, and that Plaintiffs were properly
compensated for all hours recorded.
Since the lawsuit was filed, the parties have engaged in extensive discovery,
including the exchange of written discovery and depositions of all five Plaintiffs and a
manager and corporate designee of Defendant. On May 28, 2015, the parties engaged in an
all-day mediation before a Court-approved mediator. Following the mediation, the parties
reached a settlement and executed five confidential settlement agreements. The parties now
move for the Court to approve the settlement agreements and dismiss this action with
prejudice.
DISCUSSION
As an initial matter, the Court notes “that the law is unsettled as to whether judicial
approval of a proposed settlement of FLSA claims is required in the absence of a certified
class.” King v. Raineri Constr., LLC, No. 4:14–CV–1828 (CEJ), 2015 WL 631253, at *1
(E.D. Mo. Feb. 12, 2015) (citing cases). In support of their motion for judicial approval, the
parties direct the Court’s attention to Copeland v. ABB, Inc., 521 F.3d 1010 (8th Cir. 2008),
in which the Eighth Circuit held that “FLSA rights are statutory and cannot be waived,” and
that “[t]here are only two statutory exceptions to this general rule”: (1) “an employee may
accept payment of unpaid wages under the supervision of the Secretary of Labor and if the
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back wages are paid in full”; and (2) “if an employee brings suit directly against a private
employer pursuant to § 216(b) of the statute, and the district court enters a stipulated
judgment, it will have res judicata effect on any subsequent claim for damages.” 521 F.3d
1010, 1014 (citing Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350, 1353 (11th Cir.
1982)). But neither this case nor the cases cited therein inform the Court whether it must
evaluate and approve a private FLSA settlement, or whether such approval is a prerequisite
for subsequent judicial enforcement of a private settlement. See Carrillo v. Dandan Inc., 51
F. Supp. 3d 124, 131 (D.D.C. 2014) (discussing Lynn’s Food and its progeny and finding
that the issues addressed therein—whether an FLSA settlement is legally enforceable—“is
distinct from whether a court must—or should—evaluate such a proposed settlement ex
ante,” and noting that “no binding caselaw in this Circuit requires a district court to assess
proposed FLSA settlements ex ante”).
Nevertheless, because the parties have mutually sought judicial approval of their
proposed settlement, and because declining to review the settlement would leave the parties
in an uncertain position, the Court will review the settlement’s FLSA-related terms for
fairness. See King, 2015 WL 631253, at *2 (reviewing settlement’s FLSA-related terms,
notwithstanding lack of clear requirement to do so); Carrillo, 51 F. Supp. 3d at 131 (same).
Assuming, without deciding, that a fairness review is appropriate, “[a] district court
may only approve a settlement agreement in a case brought under § 216(b) of the FLSA
after it determines that the litigation involves a bona fide dispute and that the proposed
settlement is fair and equitable to all parties.” Williams v. BPV Mkt. Place Investors, L.L.C.,
No. 4:14-CV-1047 CAS, 2014 WL 5017934, at *1 (E.D. Mo. Oct. 7, 2014). Among the
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factors the court may consider in evaluating the settlement’s fairness are “the stage of the
litigation, the amount of discovery exchanged, the experience of counsel, and the
reasonableness of the settlement amount based on the probability of plaintiffs’ success with
respect to any potential recovery.” Id.
The Court must also assess the reasonableness of the plaintiffs’ attorneys’ fees.
Williams, 2014 WL 5017934, at *2. “Attorney’s fees in FLSA settlements are examined to
ensure that the interest of plaintiffs’ counsel in counsel’s own compensation did not
adversely affect the extent of the relief counsel procured for the clients.” King, 2015 WL
631253, at *3 (citation omitted). “In a private FLSA action where the parties settled on the
fee through negotiation, there is a greater range of reasonableness for approving attorney’s
fees.” Id. (citation omitted).
In this case, the Court finds that the proposed settlement is fair and reasonable to all
parties. The settlements are the product of bona fide disputes between the parties, and were
reached after extensive discovery and an all-day mediation. Each party was represented by
experienced counsel at the mediation and throughout the pendency of this case.
The settlement agreements provide for payment of unpaid overtime compensation, as
well as liquidated damages, to each of the five Plaintiffs. At the hearing, Plaintiffs’ counsel
explained how the amounts were calculated, and explained how the amounts compared to
the maximum amount the Plaintiffs might recover at trial. Based on this information, the
Court finds the settlement amounts to be fair and reasonable in light of the defenses raised
by Defendant. Although the settlement agreements contain broad releases of liability by
the Plaintiffs for claims arising out of or during their course of employment with Defendant,
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none of the Plaintiffs is still employed by Defendant, and the scope of the releases, in light
of the overall settlement, appears to be reasonable.
The Court also finds that the requested attorneys’ fees are reasonable. Plaintiffs’
counsel submitted an affidavit describing counsel’s fee agreements with Plaintiffs and
noting that the amount of fees requested is less than total time counsel billed for this lawsuit.
Plaintiffs’ counsel also explained to the Court at the hearing how the fees were calculated.
The Court finds that the total amount of attorneys’ fees requested by Plaintiffs’ counsel is in
accordance with counsel’s fee agreements and is reasonable, based on the amount of time
and effort expended on this case, including researching and filing the claims, conducting
written discovery and depositions, and preparing for and engaging in mediation.
The requested attorneys’ fees are also apportioned equally among the Plaintiffs.
Although this manner of apportionment appears to differ from the terms of the fee
agreements, Plaintiffs’ counsel represented at the hearing that each Plaintiff was apprised at
the mediation that this manner of apportionment would, for at least some Plaintiffs, result in
the Plaintiff receiving less money than he or she would be entitled under his or her fee
agreement, and that each Plaintiff nevertheless agreed to equal apportionment of the fees in
connection with the overall settlement. Based on this representation, the Court finds that the
manner of apportionment of attorneys’ fees is also fair and reasonable.
CONCLUSION
For the reasons set forth above and stated at the hearing,
IT IS HEREBY ORDERED that the parties’ joint motion for settlement approval
and dismissal with prejudice is GRANTED. (Doc. No. 34.)
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A separate Order of Dismissal shall accompany this Memorandum and Order.
_______________________________
AUDREY G. FLEISSIG
UNITED STATES DISTRICT JUDGE
Dated this 8th day of July, 2015.
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