Brown v. Reddy Ice Corporation

Filing 89

MEMORANDUM AND ORDER APPROVING SETTLEMENT :IT IS HEREBY ORDERED that the Commissions Plus Day Rate Class and Service Technician Class are certified in this FLSA collective action for settlement purposes. IT IS FURTHER ORDERED that Plaintiffs Consen t Motion for Approval ofFLSA Collective Action Settlement Filed under Seal (ECF No. 87 ) is GRANTED. IT IS FURTHER ORDERED that within thirty (30) days after the completion of payments, the parties shall file a joint stipulation of dismissal. Signed by District Judge Ronnie L. White on 05/19/2016. (KCB)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

KENNETH BROWN, on behalf of himself
and other similarly situated individuals,
Plaintiff,
V.

REDDY ICE CORPORATION,
Defendant.

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No. 4:14CV1786 RLW

MEMORANDUM AND ORDER APPROVING SETTLEMENT

Plaintiff Kenneth Brown has filed a Consent Motion for Approval of FLSA Collective
Action Settlement (ECF No. 87), which was filed under seal. This case was brought under§
216(b) of the Fair Labor Standards Act of 1938, 29 U.S.C. §§ 201 , et seq. ("FLSA"), and, as
such, any settlement must be approved by the Court. Lynn 's Food Stores, Inc. v. United States,
679 F.2d 1350, 1353 (11th Cir. 1982). In support of the motion, Plaintiff has submitted a brief
detailing the negotiations that led to the settlement and the confidential Settlement Agreement
("Agreement"). Because the Court finds that the settlement is fair and equitable to both parties,
it will approve the proposed Agreement. Further, as part of the settlement, Plaintiffs request that
this Court certify a class as an FLSA collective action.
Class Certification

Section 7 of the FLSA mandates that an employer may not subject non-exempt
employees to work a week in excess of forty hours, unless the employee is compensated for his
or her overtime with additional pay of at least one and one-half times his or her regular hourly
wage. 29 U.S.C. § 207. A collective action under the FLSA to recover overtime compensation
and liquidated damages may be maintained, "by any one or more employees for and in behalf of

himself or themselves and other employees similarly situated." 29 U.S.C. § 216(b). Unlike a
Rule 23 class action, a collective action under the FLSA is pursued on an opt-in basis, requiring
employees to provide their consent in writing to join the action. 29 U.S.C. § 216(b); Schmaltz v.

O 'Reilly Auto. Stores, Inc., No. 4:12-CV-1056-JAR, 2013 WL 943752, at *2 (E.D. Mo. March
11 , 2013).
District courts within the Eighth Circuit conduct a two-step analysis to determine whether
employees are "similarly situated" for purposes of a collective action. Littlefield v. Dealer

Warranty Servs., LLC, 679 F. Supp. 2d 1014, 1016 (E.D. Mo. 2010). "The first step is the
' notice stage,' in which plaintiffs seek early conditional class certification and notify potential
class members of the case." Bilskey v. Bluff City Ice, Inc., No. 1:13-CV-62 SNLJ, 2014 WL
320568, at *1 (E.D. Mo. Jan. 29, 2014) (quoting Littlefield, 679 F. Supp. 2d at 1016). The
plaintiffs' burden at this stage is not an onerous one; instead, '" [c]onditional certification at the
notice stage requires nothing more than substantial allegations that the putative class members
were together the victims of a single decision, policy or plan. "' Littlefield, 679 F. Supp. 2d at
1016 (quoting Schleipfer v. Mitek Corp., No. 1:06CV109 CDP, 2007 WL 2485007, at *3 (E.D.
Mo. Aug. 29, 2007)). The Court does not reach the merits of the plaintiffs claims or determine
whether class members are actually similarly situated at this stage of the litigation. Id If the
Court conditionally certifies the class, the potential class members are given notice and an
opportunity to opt-in. Wilson v. PNK (River City), LLC, No. 4:15CV00380 AGF, 2015 WL
5098716, at *2 (E.D. Mo. Aug. 31 , 2015).
The second step is the "merits stage" and occurs when the defendant moves to decertify
the class, typically after the close of discovery. Bilskey, 2014 WL 230568, at *2. "Applying a

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stricter standard, the court at the second step makes a factual determination on the similarly
situated question." Wilson , 2015 WL 5098716, at *2.
In the instant case, the Plaintiffs moved for conditional certification, Defendant filed a

response in opposition, and Plaintiffs filed a reply brief. However, the parties reached a
settlement before the Court addressed the pending motion. In considering whether the Plaintiffs
are similarly situated for purposes of certification under the first step, this Court applies a lenient
standard and finds that the two proposed classes, the Commissions Plus Day Rate Class and the
Service Technician Class meets the criteria of this step.
With regard to the second step, the Court must determine whether the Plaintiffs are
similarly situated. Brennan v. Qwest Commc 'ns Int '!, Inc., No. 07-2024 ADM/JSM, 2009 WL
1586721, at *3 (D. Minn. June 4, 2009) (citation omitted). "In deciding whether the plaintiffs
are similarly situated, a court considers several factors, including (1) the extent and
consequences of disparate factual and employment settings of the individual plaintiffs; (2) the
various defenses available to the defendant which appear to be individual to each plaintiff; and
(3) other fairness and procedural considerations." Id. (citations omitted).
Here, the parties' contend that the proposed classes contain similarly situated individuals
warranting certification for settlement purposes. Both classes worked for Defendant. The
Defendant employed a single policy and practice of allegedly unlawful compensation to the
Commissions Plus Day Rate Class Members. In addition, the Service Technician Class members
performed the same type of work but were allegedly misclassified as exempt for overtime
purposes. According to the suggestions in support of the motion to approve the settlement, these
respective classes were subject to the same uniform policy or practice alleged to be unlawful
under the FLSA, thus meeting the "similarly situated" requirement for class certification. See

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Kautsch v. Premier Commc 'ns, 504 F. Supp. 2d 685, 689 (W.D. Mo. 2007) (finding allegations
that the class members performed essentially the same job and were paid using the same rate
system were sufficient to conditionally certify the class); Greenwald v. Phillips Home

Furnishings, Inc., No. 4:08CV1128 CDP, 2009 WL 259744, at *6-*7 (conditionally certifying
FLSA collective action for misclassifying workers as exempt and denying them overtime
compensation).
Additionally, taking into account other fairness and procedural considerations,
certification would allow hundreds of employees to effectively pool their resources for litigation.

See Shackelfordv. Cargill Meat Sol. Corp., No. 12-CV-4065-FJG, 2013 WL 209052, at *2
(W.D. Mo. Jan. 17, 2013) (certifying case as an FLSA collective action for settlement purposes
where, inter alia, fairness and procedural considerations, including the number of plaintiffs and
the effectiveness in joining them in the litigation, weighed in favor of collective treatment)
(citation and internal quotation omitted). In Shackelford, the district court finally certified the
class as a collective action for settlement purposes even though the plaintiffs had not moved for
conditional certification prior to settlement. Id. This Court similarly finds that two classes
proposed under the terms of the Agreement are similarly situated and determines that this case
should be finally certified as a collective action under the FLSA. Thus, the Court will proceed to
determining whether the Agreement should be approved. Id.
Class Settlement Agreement
A district court may only approve a settlement agreement in a case brought under §
216(b) after it determines that the litigation involves a bona fide dispute and that the proposed
settlement is fair and equitable to all parties. Id. ; Fry v. Accent Mktg. Servs., L.L.C. , No.
4:13CV59 CDP, 2014 WL 294421 , at *1 (E.D. Mo. Jan. 27, 2014).

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Here, the Agreement is the product of contested litigation, as the parties disputed
numerous issues during the litigation. The Plaintiff in this action has brought suit against his
former employer to recover allegedly unpaid overtime wages under the FLSA. Defendant
disputes this and vigorously contested Plaintiffs motion to conditionally certify the FLSA
collective action. The Court referred the case to Alternative Dispute Resolution ("ADR") on
May 4, 2015, and after several extensions oftime to complete mediation, the parties achieved a
settlement in December 2015. Thereafter, the parties requested additional time to prepare and
submit the settlement documents.
To determine whether the settlement is fair and reasonable under the FLSA, courts
consider the same fairness factors typically applied to a Rule 23 class action. Fry, 2014 WL
294421 , at *1 ; Moore v. Ackerman Inv. Co. , No. C 07-3058-MWB, 2009 WL 2848858, at *2
(N.D. Iowa Sept. 1, 2009). "Among the factors a court may consider 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." Fry, 2014 WL 294421 , at *1. In the instant case, the parties engaged in
contested litigation for nearly a year and a half, including extensive discovery and discovery
disputes, which involved undecided and complex questions of law and fact under the FLSA.
Despite the contentiousness of the case, the parties successfully negotiated a fair and reasonable
resolution of their disputes. The parties have agreed to and have attached the final Settlement
Agreement that resulted from extensive negotiations before a qualified and experienced neutral.
The Agreement is a compromise based on the relative strengths and weaknesses of the claims, as
well as the litigation risks and unresolved questions of law.

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Further, the parties were represented by experienced and competent counsel throughout
the settlement negotiations and the pendency of the case. Counsel for both parties were able to
assess the value of the respective claims and defenses and incorporate those values into the terms
of the settlement. The Court finds no basis to doubt that the settlement is fair and reasonable to
both parties in light of the complexity, expense, and uncertain outcome of continued litigation.
The Agreement also contains attached notice forms to potential opt-in class members, a
consent to join form, and a release form. Further, a potential opt-in Plaintiff may elect to do
nothing with the settlement and later independently pursue his or her rights under the FLSA.
Additionally, the potential opt-in Plaintiffs will have sixty (60) days from the day of mailing to
determine whether to participate, which the Court finds to be a reasonable opt-in period. The
Court finds the notice and consent forms attached to the Agreement and comprising the Notice
Packet are a reasonable and appropriate means by which potential opt-in Plaintiffs may elect to
participate in the settlement.
Further, the Court finds the requested attorneys ' fees in this case are reasonable. "It is
well-established that ' [t]he starting point in determining attorney fees is the lodestar, which is
calculated by multiplying the number of hours reasonably expended by the reasonable hourly
rat[e] ."' Fry, 2014 WL 294421 , at *1 (quoting Fish v. St. Cloud State Univ., 295 F.3d 849, 851 ,
(8th Cir. 2002)). Defendant does not oppose the amount of attorneys ' fees requested by
Plaintiffs counsel. In addition, the Court finds the amount is based on a reasonable hourly rate
and is reasonable based upon the amount oftime and effort expended on this case. Finally, the
Court finds that the incentive payment to Plaintiff Brown is fair and reasonable in light of his
participation in this case.

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The Court notes that the parties request the Court to retain jurisdiction over this action to
enforce the settlement. The Court will do so in this case but warns the parties that they should
use their best efforts to resolve any settlement disputes without Court involvement, as the Court
is not in the business of administering settlements.
Accordingly,
IT IS HEREBY ORDERED that the Commissions Plus Day Rate Class and Service
Technician Class are certified in this FLSA collective action for settlement purposes.
IT IS FURTHER ORDERED that Plaintiffs Consent Motion for Approval ofFLSA
Collective Action Settlement Filed under Seal (ECF No. 87) is GRANTED.
IT IS FURTHER ORDERED that within thirty (30) days after the completion of
payments, the parties shall file a joint stipulation of dismissal.
Dated this 19th Day of May, 2016.

UNITED STATES DISTRICT JUDGE

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