Boyd et al v. Schwebel Baking Company

Filing 101

Memorandum Opinion and Final Order and Judgment: The Court approves the settlement as fair and reasonable and as having satisfied the standard for approval under the Fair Labor Standards Act, 29 U.S.C. Section 216(b), and orders that the settl ement be implemented according to the terms and conditions of the settlement agreement and as directed herein. (Doc. No. 100 .) The Court dismisses the claim of the plaintiffs with prejudice, and enters final judgment dismissing it from the action. The Court finds no just reason for delay and directs the Clerk of Court to enter this final order and judgment immediately. The Court retains jurisdiction over the action to enforce the terms of the settlement, including addition of plaintiffs and the distribution process. (See Judgment for complete terms and details.) Judge Sara Lioi on 10/20/2017. (P,J)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION

TOBY L. ROSEN, Bankruptcy Trustee on
behalf of Raymond Boyd, et al.,

PLAINTIFFS,
vs.

SCHWEBEL BAKING COMPANY,

DEFENDANT.

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CASE NO. 4:15-cv-871

JUDGE SARA LIOI

MEMORANDUM OPINION AND
FINAL ORDER AND JUDGMENT

On September 7, 2017, the parties participated in a court-supervised mediation session, at
the conclusion of which, the parties advised the Court that they had reached a settlement. (NonDoc. Order, dated 9-7-17.) Now before the Court is the parties’ Joint Sealed Motion for
Approval of Settlement and Stipulation of Dismissal with Prejudice, which seeks the Court’s
approval of a settlement agreement between plaintiffs and defendant resolving plaintiffs’ claim
under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201, et seq. (Doc. No. 100 [“Joint
Mot.”].) Appended to the motion are the parties’ Confidential Collective Action Settlement
Agreement (Exhibit 1), Notice and Agreement of Confidential Settlement (Exhibit 2), a proposed
final order (Exhibit 3), and a declaration from plaintiffs’ counsel (Exhibit 4). The Court must
now determine whether the settlement represents a fair resolution of plaintiffs’ FLSA claims. For
the reasons that follow, the Court finds that it does, and the settlement is approved.

I. BACKGROUND
In this action, filed on May 3, 2015, plaintiffs, Ray Boyd1 and Terry Vukich, brought suit
against defendant, Schwebel Baking Company, on behalf themselves and others similarly
situated, for the payment for wages earned but allegedly uncompensated by defendant. (Doc. No.
1 (Complaint [“Compl.”]).) Defendant denied that plaintiffs were entitled to any additional
wages, and further denied that they violated the FLSA. (Doc. No. 8 (Answer).)
On July 24, 2015, plaintiffs filed a Motion for Conditional Certification and CourtAuthorized Notice. (Doc. No. 13.) After a period of pre-certification discovery, plaintiffs filed an
Amended Motion for Conditional Certification and Court-Authorized Notice. (Doc. No. 38
[“Am. Mot. Cond. Cert.”].) By their amended motion, plaintiffs sought to certify the following
collective under the FLSA:
All workers who were employed by Defendant Schwebel as a Route Sales
delivery driver (or similar position), spent all or part of their workday driving a
vehicle that weighed 10,000 pounds or less, and did not receive overtime for
hours worked over forty (40) per workweek during the last three years.
(See Compl. ¶ 5.) Thereafter, defendant filed a motion for judgment on the pleadings on the basis
of judicial estoppel. (Doc. No. 47.)
On June 30, 2016, the Court granted plaintiffs’ amended motion for conditional
certification and denied defendant’s motion for judgment on the pleadings. (Doc. No. 62
(Memorandum Opinion and Order).) Since the Court’s grant of conditional certification, 61 optin plaintiffs have joined this case. One of those opt-in’s claims was subsequently voluntarily
dismissed. On October 16, 2017, after a successful mediation, the parties filed the present joint
motion to approve the settlement.

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The settlement agreement covers the representative plaintiffs and the 60 existing opt-in
party plaintiffs (hereinafter “plaintiffs”) identified in the settlement agreement. To receive an
individual payment, the plaintiffs must sign and return the notice and agreement of conditional
settlement. The settlement agreement provides that, in consideration of the settlement payment,
the plaintiffs’ claims are to be dismissed with prejudice.
II. APPLICABLE LAW
“Employees are guaranteed certain rights by the FLSA, and public policy requires that
these rights not be compromised by settlement.” Crawford v. Lexington-Fayette Urban Cnty.
Gov., Civil Action No. 06-299-JBC, 2008 WL 4724499, at *2 (E.D. Ky. Oct. 23, 2008). “The
central purpose of the FLSA is to protect covered employees against labor conditions
‘detrimental to the maintenance of the minimum standard of living necessary for health,
efficiency, and general well-being of workers.’” Id. (quoting 29 U.S.C. § 202).
The provisions of the FLSA are mandatory and, except in two narrow circumstances, are
generally not subject to bargaining, waiver, or modification by contract or settlement. Brooklyn
Sav. Bank v. O’Neil, 324 U.S. 697, 706, 65 S. Ct. 895, 89 L. Ed. 1296 (1945); Lynn’s Food
Stores, Inc. v. United States, 679 F.2d 1350, 1353-53 (11th Cir. 1982). The first exception
involves FLSA claims that are supervised by the Secretary of Labor pursuant to 29 U.S.C. §
216(c). Lynn’s Foods, Inc., 679 F.2d at 1533. The second exception, applicable here,
encompasses instances in which federal district courts approve settlement of suits brought in
federal district court pursuant to § 16(b) of the FLSA. Id.

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Mr. Boyd’s bankruptcy trustee, Toby Rosen, was substituted for Mr. Boyd as a Representative Plaintiff.
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In reviewing the settlement of a federal plaintiff’s FLSA claims, the district court must
“‘ensure that the parties are not, via settlement of [the] claims, negotiating around the clear
FLSA requirements of compensation for all hours worked, minimum wages, maximum hours,
and overtime.’” Rotuna v. W. Customer Mgmt. Group LLC, No. 4:09CV1608, 2010 WL
2490989, at *5 (N.D. Ohio June 15, 2010) (quoting Collins v. Sanderson Farms, Inc., 568 F.
Supp. 2d 714, 719 (E.D. La. 2000) (further citation omitted)). The existence of a bona fide
dispute serves as a guarantee that the parties have not manipulated the settlement process to
permit the employer to avoid its obligations under the FLSA. Id. (citing Crawford, 2008 WL
4724499, at *3). The Court should also consider the following factors: the risk of fraud or
collusion, the complexity, expense, and likely duration of the litigation, the amount of discovery
completed, the likelihood of success on the merits, and the public interest in settlement.
Crawford, 2008 WL 4724499, at *3 (citing Int’l Union, United Auto., Aerospace, and Agr.
Workers of Am. v. Gen. Motors Corp., 497 F.3d 615, 631 (6th Cir. 2007)). In addition, where the
settlement agreement proposes an award of attorney’s fees, such fees must be reasonable. See
generally Reed v. Rhodes, 179 F.3d 453, 471 (6th Cir. 1999) (citing Blum v. Stenson, 465 U.S.
886, 893, 104 S. Ct. 1541, 79 L. Ed. 2d 891 (1984)).
III. ANALYSIS
The Court finds that the instant action presented bona fide disputes. Plaintiffs, Route
Sales delivery drivers, assert that they were often required to work in excess of 40 hours a week
but were not properly compensated for their time. (Compl. ¶¶ 15-18.) Defendants insist that
plaintiffs were paid in compliance with FLSA regulations, and further claim that plaintiffs were
not entitled to overtime compensation. The divergent views of the facts and the law present bona
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fide disputes that, had the parties not reached settlement, would have necessitated resolution by
the Court and/or a jury.
Having reviewed the terms of the settlement, the Court finds that the settlement
represents a fair and reasonable resolution to bona fide dispute. Further, the Court notes that the
settlement was the result of arms-length negotiations between parties that were represented by
able counsel. As such, the Court finds no risk of fraud or collusion. Moreover, plaintiffs’ counsel
has informed the Court that they believe that the settlement is fair, reasonable, and adequate and
in the best interests of the plaintiffs. Additionally, the Court finds that the award of attorney’s
fees to plaintiff’s counsel and the services awards to the named plaintiffs are reasonable, taking
into consideration the complexity of the case and the fact that a settlement was reached early in
the litigation. While the Court is not in a position to assess the likelihood of success on the
merits, as the case was still in the early stages when settlement was reached, the Court finds that
the other relevant factors weigh in favor of approving the settlement.
IV. CONCLUSION
For all of the foregoing reasons, the Court approves the settlement as fair and reasonable
and as having satisfied the standard for approval under the FLSA, 29 U.S.C. § 216(b), and orders
that the settlement be implemented according to the terms and conditions of the settlement
agreement and as directed herein.
The Court approves the method of calculation and proposed distribution of the individual
payments. The parties have submitted with the settlement one exhibit that provides the names of
the plaintiffs and the amounts of the individual payments. The court approves the amounts and

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orders that such payments be distributed in the manner, and subject to the terms and conditions,
set forth in the settlement agreement.
Having approved the service payments to the representative plaintiffs, the Court orders
that such payments be distributed in the manner, and subject to the terms and conditions, set
forth in the settlement agreement.
Having approved the payment of attorneys’ fees and expense reimbursements to
plaintiffs’ counsel, the Court orders that such payments be distributed in the manner, and subject
to the terms and conditions, set forth in the settlement agreement.
The Court dismisses the claim of the plaintiffs with prejudice, and enters final judgment
dismissing it from the action. The Court finds no just reason for delay and directs the Clerk of
Court to enter this final order and judgment immediately.
The Court retains jurisdiction over the action to enforce the terms of the settlement,
including addition of plaintiffs and the distribution process.
IT IS SO ORDERED.

Dated: October 20, 2017
HONORABLE SARA LIOI
UNITED STATES DISTRICT JUDGE

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