Waggoner et al v. U.S. Bancorp et al
Memorandum Opinion and Order: The Court grants plaintiffs' unopposed motion (Doc. No. 117 ) and approves the settlement. Accordingly, and pursuant to the parties' settlement, the Court: (1) Approves the Settlement Agreement and all of its terms; (2) Approves the Notices and Claim Form and the proposed plan for their distribution, and orders the payment to the collective to take place in accordance with the Settlement Agreement; (3) Approves and orders the payment of an addition al $10,000.00 to each of the following plaintiffs: Kelly Waggoner, Darbey Schultz, Debthy Brown, Richard DeGregorio, and Rachel Nieves; (4) Orders the payment of $383,333.33 in attorney's fees, plus $34,010.92 in costs and expense s, to plaintiffs' counsel; and (5) Approves and orders the payment of $26,000.00 to Rust Consulting, Inc. as the administrator. Pursuant to the terms of the Settlement Agreement, this amount may increase slightly in the event that addition al collective members are identified. Within 30 days of the entry of this Order, unless there is an appeal, in which case, two days after the final appeal is resolved, the litigation will be dismissed with prejudice, and without costs, expenses, or a ttorney's fees to any party except as provided in the Settlement Agreement and this Order. The Court will retain jurisdiction over this action for the purposes of supervising the implementation, enforcement, construction, administration, and interpretation of the Settlement Agreement, including oversight as to the distribution of settlement funds. Judge Sara Lioi on 12/29/2016. (P,J)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
KELLY WAGGONER and DARBEY
SCHULTZ, on behalf of themselves and all
other similarly situated,
U.S. BANCORP, a foreign corporation, and
U.S. BANK NATIONAL ASSOCIATION, a
CASE NO. 5:14-cv-1626
JUDGE SARA LIOI
MEMORANDUM OPINION AND
This matter is before the Court on plaintiffs’ “Notice of Unopposed Motion for Approval
of FLSA Settlement Agreement and Release,” which seeks the Court’s approval of a settlement
agreement1 entered into between plaintiffs and defendants resolving plaintiffs’ claims filed under
the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201, et seq. (Doc. No. 117 [“Mot.”].) The
motion was supported by a memorandum and declarations from counsel. On December 19, 2016,
the Court held a hearing on the motion. At the conclusion of the hearing, the Court took the
motion under advisement. For the reasons that follow, the settlement is approved and plaintiffs’
unopposed motion is granted.
In this collective action, filed July 23, 2014, plaintiffs Kelly Waggoner and Darbey
Schultz (collectively “named plaintiffs”) brought suit against defendants, U.S. Bancorp and U.S.
A copy of the settlement agreement was appended to the motion. (Doc. No. 117-4 (“Settlement Agreement”).)
Bank National Association (collectively “U.S. Bank”), for unpaid overtime wages on behalf of
themselves and other co-managers (“CMs”) at U.S. Bank’s in-store branches located in retail
grocery stores. Opt-in plaintiffs Debthy Brown, Richard DeGregorio and Rachel Nieves
(collectively “discovery opt-in plaintiffs”) joined the case shortly thereafter. (See Doc. Nos. 10
and 11.) The amended complaint alleged that, while U.S. Bank uniformly classifies its CMs
stationed in grocery store branches as exempt from federal overtime provisions and does not pay
CMs overtime wages, these CMs routinely performed non-exempt duties. (Doc. No. 6 (Amended
Complaint [“Am. Compl.”]) ¶¶ 4-7.) U.S. Bank denied the allegations and denied that it violated
the FLSA with respect to its treatment of its CMs working in retail grocery stores. Defendants
also asserted seventeen affirmative defenses. (See Doc. No. 16 (Amended Answer [“Am.
The pending motion was preceded by two and one half years of contentious litigation
wherein the parties conducted discovery and engaged in motion practice. On June 24, 2015, the
Court granted plaintiffs’ motion for conditional certification. (Doc. No. 34.) Following
conditional certification, the parties continued to litigate issues relating to various matters,
including the notices to members of the collective. After the Court resolved the disputes relative
to the notices, 161 CMs submitted valid consent forms joining the lawsuit, bringing the total
number of claimants to 166. (Doc. Nos. 49-66, 68-89, 91-94, 96-99, 101, 103, 105, 110.)
Following the notice period, the parties engaged in written discovery. On June 7, 2016,
the parties participated in a formal mediation conference with a well-respected mediator with
expertise in collective wage and hour matters. While the parties were not able to resolve the
claims at the mediation, with the assistance of the mediator, they continued negotiations and
eventually reached an agreement on the general terms of a settlement.
The Settlement Agreement establishes a maximum settlement fund of $1,150,000.00 to
settle plaintiffs’ FLSA claims, and the claims of all named and opt-in plaintiffs, as well as all
eligible class members who did not timely opt into this case. The distribution to each CM is
based on an estimate of 10 hours per workweek of unpaid overtime. The parties estimate that the
settlement recovers 94 percent of the lost wages of the collective. All non-opt in members will
receive approximately 25% of the individual settlement amount that a named and opt-in plaintiff
will receive. Additionally, the named plaintiffs and discovery opt-in plaintiffs will each receive a
$10,000.00 enhancement award in recognition of their assistance in obtaining the benefits set
forth in the Settlement Agreement. Rust Consulting, Inc., the third-party claims administrator,
shall receive a fee capped at $26,000.00. Finally, plaintiffs’ counsel will receive one-third of the
$1,150,000.00 gross amount, plus reimbursement of reasonable out-of-pocket costs and
At the hearing on the motion, the Court heard from counsel on the course the parties took
in arriving at the settlement. Though notice of the fairness hearing was distributed to the
collective well in advance of the hearing, no collective members attended the hearing.
Additionally, the Court has received no communications from absent collective members
criticizing or challenging the settlement.
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.
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. Grp. 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, the public interest in settlement, the opinion of counsel and collective
members, and the reaction of absent collective members. 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
At the outset, the Court finds that the instant action presented bona fide disputes. As set
forth above, the parties disputed whether CMs assigned to branches located in retail grocery
stores were properly classified as exempt for purposes of overtime wages. While plaintiffs
contended that the CMs routinely performed teller and other non-managerial duties, defendants
insist that the CMs were properly classified as exempt, and that they violated no laws regarding
the payment of overtime to plaintiffs. The divergent views of the facts and the law present bona
fide disputes that, had the parties not reached settlement, would have necessitated resolution by
the Court and/or a jury.
Having reviewed the unopposed motion, the Settlement Agreement, and the other
materials attached to the motion, and after having conducted a fairness hearing, the Court finds
that the settlement represents a fair and reasonable resolution to bona fide disputes. Further, the
Court notes that the settlement was the result of arms-length negotiations between parties that
were represented by able counsel, after considerable discovery and an involved mediation before
an experienced mediator. As such, the Court finds no risk of fraud or collusion. These factors all
weigh in favor of approving the settlement.
The Court further finds that the complexity, expense and likely duration of the litigation,
if the settlement is not approved, weigh in favor of accepting the settlement. “Wage-and-hour
collective and class actions are, by their very nature, complicated and time-consuming.” Swigart
v. Fifth Third Bank, No. 1:11-cv-88, 2014 WL 3447947, at *7 (S.D. Ohio July 11, 2014) (citation
omitted). Added to the complexity inherent in such cases is the fact that the parties have
disagreed over every aspect of this particular case from conditional certification to the content of
the notices. This matter has already been pending for several years. In light of these
considerations, the Court finds that this factor also weighs in favor of finding the settlement fair
Though the collective representatives failed to offer their opinions as to the fairness of the
settlement, plaintiffs’ counsel offered the opinion that the settlement represents an excellent
result for the collective, as it served to recover approximately 94% of the estimated lost wages.
According to counsel, the settlement award constitutes significant value given the attendant risks
of continued litigation. This weighs in favor of finding the settlement fair and reasonable.
Public interest also favors settlement. “There is a strong public interest in encouraging
settlement of complex litigation and class action suits because they are ‘notoriously difficult and
unpredictable’ and settlement conserves judicial resources.” In re Sketchers Toning Shoe Prods.
Liabl. Litig., Master File No. 3:11-MD-2308-TBR, 2013 WL 2010702, at *7 (W.D. Ky. May 13,
2013) (quoting In re Cardizem, CD Antitrust Litig., 218 F.R.D. 508, 530 (E.D. Mich. 2003)
(further quotation marks and citation omitted). “If the settlement reflects a reasonable
compromise over issues actually disputed, such as FLSA coverage or computation of back
wages, a court may approve a settlement to ‘promote the policy of encouraging settlement of
litigation.’” Crawford, 2008 WL 4724499, at *9 (quoting Lynn’s Food Store, Inc., 679 F.3d at
1353). The Court finds that the settlement is a reasonable compromise over disputed issues.
Therefore, this factor favors finding the settlement fair and reasonable.
As previously observed, the Court received no objections from absent collective
members, and it has no reason to believe that the settlement is opposed by any collective
members. Additionally, while the Court is not in a position to assess the likelihood of success on
the merits, as the parties were still conducting discovery when settlement was reached, the Court
finds that the other relevant factors weigh in favor of approving the settlement. The Court hereby
approves the settlement.
The Court further finds that the enhanced service award to the named and discovery optin plaintiffs is reasonable. Counsel has averred that these plaintiffs “spent a significant amount of
time and effort” assisting counsel: investigate the claims, prepare and review the complaint,
respond to discovery, and prepare for mediation. (Doc. No. 117-3 (Declaration of Justin M.
Swartz [“Swartz Decl.”] ¶ 41.) Further, the requested service awards amount to less than 4.4% of
the total recovery, which the Court finds to be a reasonable percentage. (Id. ¶ 42.) The Court
further finds support for the incentive award in the fact that no objections were filed.
Additionally, the Court finds that the fee of the settlement claims administrator is
reasonable. Such fee shall cover the costs incurred by the administrator in preparing the notices,
processing the claims, cutting and mailing the checks, and advising on tax and accounting
matters. (See Swartz Decl. ¶¶ 32-33.)
Finally, the Court finds that the award of attorney’s fees to plaintiffs’ counsel is
reasonable, taking into consideration the complexity of the case. Counsel has detailed the work
performed, which included investigating the claims, conducting the litigation, and negotiating the
settlement. Counsel also took on substantial risk in agreeing to take this action on a contingency
fee. Included in these risks was the possibility that the Court would not certify the collective
and/or would decertify the collective, and that the Court would not resolve the legal and factual
issues in their clients’ favor. The award to plaintiffs’ counsel is justified by the work counsel
performed, as well as by the ultimate recovery they secured for their clients. The award of costs
to plaintiff’s counsel is also reasonable, and the supporting declarations and summaries fully
support such an award.
For all of the foregoing reasons, the Court grants plaintiffs’ unopposed motion and
approves the settlement. Accordingly, and pursuant to the parties’ settlement, the Court:
Approves the Settlement Agreement and all of its terms;
Approves the Notices and Claim Form and the proposed plan for their
distribution, and orders the payment to the collective to take place in accordance with
the Settlement Agreement;
Approves and orders the payment of an additional $10,000.00 to each of the
following plaintiffs: Kelly Waggoner, Darbey Schultz, Debthy Brown, Richard
DeGregorio, and Rachel Nieves;
Orders the payment of $383,333.33 in attorney’s fees, plus $34,010.92 in costs
and expenses, to plaintiffs’ counsel; and
Approves and orders the payment of $26,000.00 to Rust Consulting, Inc. as the
administrator. Pursuant to the terms of the Settlement Agreement, this amount may
increase slightly in the event that additional collective members are identified.
Within 30 days of the entry of this Order, unless there is an appeal, in which case, two
days after the final appeal is resolved, the litigation will be dismissed with prejudice, and without
costs, expenses, or attorney’s fees to any party except as provided in the Settlement Agreement
and this Order. The Court will retain jurisdiction over this action for the purposes of supervising
the implementation, enforcement, construction, administration, and interpretation of the
Settlement Agreement, including oversight as to the distribution of settlement funds.
IT IS SO ORDERED.
Dated: December 29, 2016
HONORABLE SARA LIOI
UNITED STATES DISTRICT JUDGE
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