BETTGER v. CROSSMARK, INC.
MEMORANDUM (Order to follow as separate docket entry) re: 52 Joint MOTION for Approval of Settlement. (See memo for complete details.) Signed by Chief Judge Christopher C. Conner on 1/22/15. (ki)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
CIVIL ACTION NO. 1:13-CV-2030
(Chief Judge Conner)
Presently before the court is the joint motion (Doc. 55) of plaintiff Patricia
Bettger (“Bettger”) and of defendant Crossmark, Inc. (“Crossmark”) for judicial
approval of settlement, pursuant to the Fair Labor Standards Act (“FLSA”), 29
U.S.C. § 201 et seq. For the reasons that follow, the court will grant the motion in
part and deny it in part.
Factual Background & Procedural History
Crossmark is a provider of in-store marketing and retail merchandising
services for consumer products such as Frito-Lay, General Mills, Fuji Film, Johnson
& Johnson and Kraft Foods. (Doc. 1 ¶ 3). Bettger has been an hourly-paid retail
representative for Crossmark since 1999. (Id. ¶ 2). Bettger worked full-time for
Crossmark during 2008 and early 2009, but Crossmark switched her to a part-time
schedule effective as of the March 27, 2009 pay period. (Doc. 28 ¶ 2; Doc. 31 at 5-6
¶ 2; Doc. 33 ¶ 2). Bettger performs most of her work duties at various store
locations in Pennsylvania. (Doc. 1 ¶ 16). During her period of full-time
employment, Bettger began her day by connecting to Crossmark’s website from her
personal computer at home to check email and to receive instructions on work
assignments. (Id. ¶¶ 17-18). Bettger was not specifically required to connect to
Crossmark’s website from her home, and she could have connected from any
internet-accessible computer device. (Doc. 28 ¶ 16; Doc. 31 at 19 ¶ 16; Doc. 33 ¶ 16).
Bettger also spent approximately twenty minutes each morning loading her car
with work materials. (Doc. 1 ¶ 23). After loading her car, Bettger departed home for
her first assigned work location. (Id. ¶ 24). She used her personal vehicle to drive
to assigned stores, and Crossmark did not require her to clean or perform
maintenance on her vehicle. (Doc. 28 ¶ 18; Doc. 31 at 20 ¶ 18; Doc. 33 ¶ 18).
Crossmark paid Bettger for her morning commute only when she exceeded the
established benchmarks of forty miles or one hour. (Doc. 28 ¶ 20; Doc. 31 at 21 ¶ 20;
Doc. 33 ¶ 20).
Bettger exercised substantial discretion over her daily work schedule. She
decided which assigned stores to visit on which days, and in what order to visit
them. Crossmark only required that Bettger perform certain assignments on a
particular day of the week and that she complete all assignments within a two-week
time frame. (Doc. 28 ¶ 15; Doc. 31 at 19 ¶ 15; Doc. 33 ¶ 15).
Bettger recorded her work hours in Crossmark’s online SalesTrak system.
(Doc. 28 ¶ 6; Doc. 31 at 7 ¶ 6; Doc. 33 ¶ 6). Other than payroll support staff, only
Bettger could enter her time or modify her entries in SalesTrak. (Doc. 28 ¶ 7; Doc.
31 at 7 ¶ 7; Doc. 33 ¶ 7). Aside from the time reports submitted into SalesTrak,
neither Crossmark nor Bettger has any record of Bettger’s work hours. (Doc. 28
¶ 10; Doc. 31 at 11 ¶ 10; Doc. 33 ¶ 10). It is undisputed that Bettger was paid for all
the time that she reported in SalesTrak. (Doc. 28 ¶ 8; Doc. 31 at 8-10 ¶ 8; Doc. 33
Crossmark’s written policy requires Bettger to record accurately the time she
worked in the SalesTrak system. (Doc. 28 ¶ 11; Doc. 31 at 11-13 ¶ 11; Doc. 33 ¶ 11).
It also instructs Bettger to report the actual amount of time she spent on
administrative tasks, and not to use a “rule of thumb” by estimating 15 or 30
minutes per day for such tasks. (Doc. 28 ¶ 12; Doc. 31 at 13-15 ¶ 12; Doc. 33 ¶ 12).
The written policy further states that supervisors are not allowed to “suggest” that
employees work extra time without reporting it. (Doc. 28 ¶ 13; Doc. 31 at 15-17 ¶ 13;
Doc. 33 ¶ 13). Additionally, the policy prohibits employees from working overtime
without advance approval. (Doc. 28 ¶ 14; Doc. 31 at 17-19 ¶ 14; Doc. 33 ¶ 14). If an
employee works unapproved overtime, they will be paid but they may be subject to
discipline for non-compliance. (Id.)
The parties dispute whether Bettger’s supervisor, Jane Swaggert
(“Swaggert”), instructed Bettger consistent with this written policy. According to
Bettger, Swaggert periodically advised her: “we have to keep the week under 40
hours unless there’s an exception.” (Doc. 31-1, Ex. 1 at 134:23-24). When Bettger
informed Swaggert that she was working more time than she was allowed,
Swaggert allegedly responded, “Well, my hands are tied. You can only—you can’t
put that in.” (Doc. 31-1, Ex. 1 at 190:5-8). Significantly, however, Bettger does not
recall whether Swaggert instructed her to keep her reported weekly hours under 40
even if she actually worked more than 40 hours, or simply advised her to get her
work done within 40 hours. (Doc. 28 ¶ 37; Doc. 31 at 31 ¶ 37; Doc. 33 ¶ 37; Doc. 31-1,
Ex. 1 at 138:9-19). On at least six occasions during her period of full-time
employment in 2008 and early 2009, Bettger reported and was paid for overtime.
(Doc. 28 ¶ 29; Doc. 31 at 25-26 ¶ 29; Doc. 33 ¶ 29).
Bettger also alleges that Swaggert orally instructed her to limit her
administrative time to 30 minutes a day or 2.5 hours a week. (Doc. 28 ¶ 31; Doc. 31
at 26 ¶ 31; Doc. 33 ¶ 31). She estimates that during her full-time employment in 2008
and early 2009, she performed administrative tasks for 5.5 to 8 hours per week that
she did not report and for which she was not paid. (Doc. 28 ¶ 27; Doc. 31 at 25 ¶ 27;
Doc. 33 ¶ 27). However, Swaggert never threatened Bettger with termination for
entering more than 30 minutes of administrative time in a single day, and Bettger
had not heard of other employees being terminated for that reason. (Doc. 28 ¶ 34;
Doc. 31 at 29 ¶ 34; Doc. 33 ¶ 34). Indeed, she entered more than 30 minutes a day or
2.5 hours a week of administrative time into SalesTrak on numerous occasions in
2008, and was paid in full each time. (Doc. 28 ¶ 33; Doc. 31 at 28-29 ¶ 33; Doc. 33
¶ 33). Furthermore, it is undisputed that Bettger never complained to anyone in
Crossmark’s Payroll or Human Resources Departments, or to corporate
headquarters, about Swaggert’s alleged instructions. (Doc. 28 ¶ 35; Doc. 31 at 29-30
¶ 35; Doc. 33 ¶ 35).
On February 9, 2011, Bettger filed a consent form to join the putative
collective action Postiglione et al. v. Crossmark, Inc., Civ. A. No. 11-960, in the
Eastern District of Pennsylvania. Plaintiffs in that action sought to certify a
nationwide class of Crossmark Retail Representatives for violations of § 216(b) of
the FLSA based on allegations of unpaid overtime. On November 15, 2012, the
court denied the Postiglione plaintiffs’ motion for conditional collective action
certification, holding that (1) plaintiffs were not similarly situated and (2) plaintiffs
failed to establish an illegal company-wide policy on behalf of Crossmark. Civ. A.
No. 11-960, 2012 WL 5829793 (E.D. Pa. Nov. 15, 2012). The court also found that
Bettger was improperly joined to the action because plaintiffs’ claims did not rise
out of a common transaction or occurrence. (Id.)
On January 24, 2013, Bettger filed an individual complaint in this case in the
Eastern District of Pennsylvania. (Doc. 1). On June 27, 2013, the Eastern District of
Pennsylvania entered an order transferring Bettger’s case to the Middle District of
Pennsylvania. (Doc. 13). After a period of discovery, Crossmark filed a motion
(Doc. 26) for summary judgment and a motion (Doc. 34) in limine. The court
granted Crossmark’s motion for summary judgment in part, limiting the scope of
Bettger’s claims for unpaid overtime compensation to the unreported hours she
allegedly spent performing administrative tasks. (Doc. 38). The court granted
Crossmark’s motion in limine in full, precluding Bettger from introducing evidence
relating to (1) other FLSA lawsuits against Crossmark and (2) Crossmark’s failure to
maintain login and logout records from SalesTrak. (Id.)
Before proceeding to trial, the parties agreed to settle the case. (Doc. 55
¶¶ 9-10). The court subsequently ordered the parties to file any proposed settlement
agreement for judicial approval. (Doc. 48). On November 30, 2014, Bettger filed a
motion (Doc. 52) for judicial approval of settlement, and on December 12, 2014, the
parties submitted the instant proposed settlement agreement accompanied by a
brief in support. (See Doc. 55). The motion is fully briefed and ripe for disposition.
Congress enacted the FLSA for the purpose of “protect[ing] all covered
workers from substandard wages and oppressive working hours.” Barrentine v.
Arkansas-Best Freight Sys., 450 U.S. 728, 739 (1981); see also 29 U.S.C. § 202(a). The
statute was designed to ensure that each employee covered by the Act would
receive “[a] fair day’s pay for a fair day’s work and would be protected from the evil
of overwork as well as underpay.” Barrentine, 450 U.S. at 739 (internal citations
and quotations omitted). To safeguard employee rights made mandatory by the
statute, a majority of courts have held that bona fide FLSA disputes may only be
settled or compromised through payments made under the supervision of the
Secretary of the Department of Labor or by judicial approval of a proposed
settlement in an FLSA lawsuit. See, e.g., Lynn’s Food Stores, Inc. v. U.S. ex rel.
U.S. Dep’t of Labor, 679 F.2d 1350, 1354 (11th Cir. 1982) (“[W]hen the parties submit
a settlement to the court for approval, the settlement is more likely to reflect a
reasonable compromise of disputed issues than a mere waiver of statutory rights
brought about by an employer’s overreaching.”); Copeland v. ABB, Inc., 521 F.3d
1010 (8th Cir. 2008); O’Connor v. United States, 308 F.3d 1233, 1243-44 (Fed. Cir.
2002); Dees v. Hydradry, Inc., 706 F. Supp. 2d 1227 (M.D. Fla. 2010); Collins v.
Sanderson Farms, Inc., 568 F. Supp. 2d 714 (E.D. La. 2008). But see Martin v.
Spring Break ’83 Prods., 688 F.3d 247 (5th Cir. 2012). Under § 216(b), an employer
who violates § 206 or § 207 is liable to the affected employee or employees for
unpaid minimum or overtime compensation, and for an additional equal amount in
liquidated damages. 29 U.S.C. § 216(b). Although the Third Circuit has not
addressed whether such § 216(b) actions claiming unpaid wages may be settled
privately without first obtaining court approval, district courts within the Third
Circuit have followed the majority position and assumed that judicial approval is
necessary. See, e.g., McGee v. Ann’s Choice, Civ. A. No. 12-2664, 2014 WL 2114582
(E.D. Pa. June 4, 2014); Brown v. TrueBlue, Inc., No. 1:10-CV-514, 2013 WL 5408575
(M.D. Pa. Sept. 25, 2013); Deitz v. Budget Renovations & Roofing, Inc., No. 4:12-CV0718, 2013 WL 23338496 (M.D. Pa. May 29, 2013); Altenbach v. Lube Ctr., No. 1:08CV-2178, 2013 WL 74251 (M.D. Pa. Jan. 4, 2013); Cuttic v. Crozer-Chester Med. Ctr.,
868 F. Supp. 2d 464 (E.D. Pa. 2012); Brumley v. Camin Cargo Control, Inc., Civ. A.
No. 08-1798, 2012 WL 1019337 (D.N.J. Mar. 26, 2012); Morales v. PepsiCo, Inc., Civ.
A. No. 11-6275, 2012 WL 870752 (D.N.J. Mar. 14, 2012). In the absence of guidance
from the Third Circuit, courts have routinely employed the considerations set forth
by the Eleventh Circuit in Lynn’s Food Stores, 679 F.2d 1350, to evaluate proposed
settlement agreements. See, e.g., McGee, 2014 WL 2114582; Brown, 2013 WL
5408575; Deitz, 2013 WL 23338496; Altenbach, 2013 WL 74251; Cuttic, 868 F. Supp.
2d 464; Brumley, 2012 WL 1019337; Morales, 2012 WL 870752.
Under Lynn’s Food Stores, 679 F.2d 1350, a proposed compromise may
satisfy judicial review if it is a “fair and reasonable resolution of a bona fide dispute
over FLSA provisions.” Id. at 1355. An agreement resolves a bona fide dispute
when there is some doubt as to whether the plaintiff would succeed on the merits at
trial. See id. at 1354; Deitz, 2013 WL 23338496, at *3; Collins, F. Supp. 2d at 719-20.
Disputed issues may include, for example, “FLSA coverage or computation of back
wages.” Lynn’s Food Stores, 679 F.2d at 1354; see Brown, 2013 WL 5408575, at *1.
If a reviewing court is satisfied that an agreement does in fact decide a bona fide
dispute, it proceeds in two phases: first, the court assesses whether the agreement
is fair and reasonable to the plaintiff employee; second, it determines whether the
settlement furthers or “impermissibly frustrates” the implementation of the FLSA
in the workplace. Altenbach, 2013 WL 74251, at *1; see McGee, 2014 WL 2114582, at
*2; Brown, 2013 WL 5408575, at *1; Dees, 706 F. Supp. 2d at 1241.
Terms of Proposed Agreement
Under the terms of the proposed settlement agreement, Bettger will receive
$3,298.55 for unpaid wages and $3,298.55 for liquidated damages, $6,597.09 in total.
(Doc. 55 Ex. C ¶ 2.1). Bettger’s counsel will receive $16,502.90 for attorneys’ fees and
costs. (Id.) Regarding these payments, the agreement specifically states:
[Crossmark’s payments] shall constitute consideration and
payment in full for (i) all claims Bettger has or may have against
[Crossmark]; (ii) any and all attorneys’ fees, expenses, costs of
court and any other unknown fees, costs and/or expenses
incurred by Bettger and/or her legal counsel . . . and (iii)
Bettger’s releases, promises, and obligations contained herein.
(Id. ¶ 2.2). The agreement requires Bettger to provide Crossmark with an affidavit
reiterating her understanding of the above terms; acknowledging that she is
obligated to abide by Crossmark’s time recording policies; and stating that she will
properly record all time actually worked for Crossmark moving forward. (Id. ¶ 3.0).
In addition, the agreement contains the following release provision:
For and in consideration of the covenants and/or promises
contained herein, [Bettger] . . . hereby fully, finally, and forever
RELEASES, ACQUITS, and DISCHARGES [Crossmark] . . . from, and
covenants not to sue [Crossmark] . . . for any and all claims, demands,
actions, causes of action, other liabilities, and/or damages, if any,
known or unknown, whether arising at law, by statute, or in equity,
which Bettger, or any other person or entity claiming by, through or
under her, may have or claim to have, jointly or severally, against
[Crossmark] that in any way arise out of or are connected with acts,
omissions, conduct, relationships, occurrences, dealings,
communications, events, and/or transactions that have occurred on or
before the Effective Date, including, without limitation, the claims
asserted in the White Lawsuit and/or Postiglione Lawsuit and any
other contractual, constitutional, statutory, or common law or tort
claims whatsoever, including, without limitation, any claims for
wrongful discharge or termination or violations of any state or federal
law which provides civil remedies for the enforcement of rights arising
out of the employment relationship, including claims under Title VII of
the Civil Rights Act of 1964, . . . Americans with Disabilities Act, . . .
Age Discrimination in Employment Act, . . . the Fair Labor Standards
Act, . . . (specifically including the Equal Pay Act), . . . the Family and
Medical Leave Act, . . . the Occupational Safety and Health Act, . . . the
Sarbanes-Oxley Act of 2002; and the Employee Retirement Income
Security Act, . . . as well as any claims arising out of or based upon any
allegations seeking to recover wages, salary, commissions, bonuses,
front or back pay, benefits, stock options, profit sharing interests, or
any other such employee-related compensation or benefits, or based
upon allegations of breach of contract, defamation, promissory
estoppel, tortious interference, implied covenants, invasion of privacy,
assault and battery[,] . . . false imprisonment, negligence[,] . . .and/or
intentional or other infliction of emotional distress.
(Id. ¶ 4.1). The agreement further details Bettger’s considered waiver of any
and all claims specifically arising under the Age Discrimination in
Employment Act (“ADEA”). 29 U.S.C. § 621 et seq.; (id. ¶ 4.2). Therein,
Bettger acknowledges that she has received consideration “in addition to
anything of value to which she was previously entitled” in return for waiving
all ADEA claims against Crossmark arising prior to the date of the
agreement’s execution. (Id.) The provision allows Bettger seven days after
the date of execution to revoke her waiver of ADEA claims. (Id.)
Furthermore, in the section titled “Dismissal of Governmental Proceedings,”
Bettger “affirms that she has no charges of discrimination, harassment, and/or
retaliation or any other claim pending with the Equal Employment Opportunity
Commission, Pennsylvania Department of Human Rights, the Department of
Labor, or other state or federal government agency against Crossmark.” (Id. ¶ 5.2).
She agrees, however, that “[t]o the extent that any such charges exist, [she will]
undertake all necessary efforts to withdraw the charge(s) and to dismiss any
proceeding associated with such charge(s).” (Id.)
Bettger also represents in the agreement that “she will not testify or submit
an affidavit, declaration or affirmation in any other lawsuits involving [Crossmark],
including, without limitation, any lawsuits initiated by persons who were namedplaintiffs or opt-in plaintiffs in the Postiglione Lawsuit unless required to do so by
subpoena or court order.” (Id. ¶ 6.1). Additionally, she “will not assist or work with
any persons initiating any other lawsuits against [Crossmark], including, without
limitation, any persons who were named-plaintiffs or opt-in plaintiffs in the
Postiglione Lawsuit unless required to do so by subpoena or court order.” (Id.)
Finally, the proposed settlement agreement provides that Bettger’s counsel will file
a stipulation of dismissal with prejudice no later than three business days after
receiving the executed agreement from Crossmark. (Id. ¶ 5.1).
Bona Fide Dispute
The court first addresses the threshold question of whether the parties’
agreement resolves a bona fide dispute. Bettger asserts that Crossmark willfully
violated the FLSA by failing to compensate her for unreported overtime hours
between April 21, 20081 and March 26, 2009.2 (See Doc. 55 at 8-9). Crossmark
responds that Bettger is not entitled to compensation under the FLSA for any
overtime that she failed to report. (Id.)
An employee’s FLSA claim is subject to a two-tiered statute of limitations:
two years for ordinary violations and three years for willful violations. 29 U.S.C.
§ 255(a). To establish a willful violation, the employee must provide sufficient
evidence to indicate that the employer “either knew or showed reckless disregard”
as to whether its conduct was prohibited by the FLSA. McLaughlin v. Richland
Shoe Co., 486 U.S. 128, 133 (1988). Simple negligence on the part of an employer is
not sufficient to constitute a willful violation. Id.
Better asserts that Swaggert directed her to refrain from reporting overtime
hours that she knew Bettger worked. (Doc. 31-1, Ex. 1 at 190:5-8). Bettger further
avers that Crossmark, through Swaggert’s actions, willfully violated the FLSA as it
applies to Bettger’s compensation. (Doc. 55 at 9); see Stanislaw v. Erie Indemnity
The statute of limitations was tolled when Bettger joined the putative
collective action on February 9, 2011. The statute of limitations restarted when she
was dismissed from the collective action on November 14, 2012, until she filed her
complaint in the instant case on January 24, 2013. (See Doc. 13). Thus, the threeyear statute of limitations applicable to willful violations bars any claims for
compensation accruing before April 21, 2008.
Bettger’s claim for wages ends at the March 26, 2009 pay period, when she
transitioned from full-time to part-time status. (Doc. 31 at 36).
Co., Civ. A. No. 07-1078, 2012 WL 517332, at *10 (W.D. Pa. Feb. 15, 2012) (“Courts
have consistently concluded that a violation is willful where an employer
intentionally discourages or inhibits employees from accurately reporting
overtime.” (citing cases)). Relying exclusively on her own estimate of total unpaid
work hours, (Doc. 38 at 18), at trial, Bettger would endeavor to prove $4,337.01 in
unpaid overtime wages between April 21, 2008 and March 26, 2009; this would
entitle her to $8,674.02 under § 216(b). (See Doc. 55 at 9).
In response, Crossmark contends that Bettger is not owed compensation for
time spent performing unreported administrative tasks because Crossmark lacked
actual or constructive knowledge of this work. (Doc. 27 at 10-13). Subsequently,
Crossmark argues that, because any alleged violations were not willful, Bettger’s
entire claim period falls outside of the applicable two-year statute of limitations
period.3 (Id. at 13-14). Crossmark further contends that, even under the three-year
statute of limitations applicable to willful violations, Bettger lacks any meaningful
record of the “amount or extent of unpaid time she supposedly worked.” (Doc. 27 at
Relying on the foregoing arguments, the parties aver that their agreement
settles a bona fide dispute, as there is a reasonable possibility that Bettger would
not prevail at trial. (Doc. 55 at 9); see Lynn’s Food Stores, 679 F.2d at 1354; Deitz,
2013 WL 23338496, at *3; Collins, F. Supp. 2d at 719-20. The court agrees. Indeed,
upon consideration of Crossmark’s motion for summary judgment, the court noted
The time period applicable to Bettger’s claim ends at the pay period of
March 26, 2009, and the two-year statute of limitations governing ordinary FLSA
violations bars any claims for compensation accruing before April 21, 2009.
that although “a jury could . . . reasonably find that Crossmark, through Swaggert’s
actions, willfully violated the FLSA,” Bettger’s claim is “marginal at best.” (Doc. 38
at 21 (emphasis added)). As explained supra, at trial, Bettger would be required to
establish that Crossmark willfully violated the FLSA, and it is unclear from the
record whether Swaggert’s comments evidence a knowing violation on the part of
Crossmark. (See Doc. 31-1, Ex. 1 at 134:23-24). Bettger would also be required to
prove the extent and amount of her damages by a preponderance of the evidence.
Bettger relies principally upon estimates of the number of extra administrative
hours she worked to support her claim for $4,337.01 in unpaid overtime wages.
(Doc. 38 at 18). She otherwise lacks corroborative evidence of these extra hours. In
sum, both the factual underpinnings of Bettger’s claims and Bettger’s legal right to
FLSA coverage are debatable on the present record. Hence, the court is satisfied
that the instant settlement facilitates the compromise of a bona fide dispute, rather
than the “mere waiver of statutory rights brought about by an employer's
overreaching.” Lynn’s Food Stores, 679 F.2d at 1354.
Fair and Reasonable Settlement
The court will next determine whether the settlement agreement proposed
by the parties is fair and reasonable to Bettger. In undertaking this analysis,
district courts within the Third Circuit have considered the factors set forth in
Girsh v. Jepson, 521 F.2d 153, 157 (3d Cir. 1975), which established evaluative
criteria for the fairness of proposed class action settlements. See, e.g., McGee, 2014
WL 2114582, at *2; Brown, 2013 WL 5408575, at *2; Deitz, 2013 WL 23338496, at *5-8;
Altenbach, 2013 WL 74251, at *2; Brumley, 2012 WL 1019337, at *4-5. Girsh directs
courts to examine the following nine factors:
(1) the complexity, expense, and likely duration of the litigation; (2) the
reaction of the class to the settlement; (3) the stage of the proceedings
and the amount of discovery completed; (4) the risks of establishing
liability; (5) the risks of establishing damages; (6) the risks of
maintaining the class action through the trial; (7) the ability of the
defendants to withstand a greater judgment; (8) the range of
reasonableness of the settlement fund in light of the best possible
recovery; and (9) the range of reasonableness of the settlement fund to
a possible recovery in light of all the attendant risks of litigation.
Girsh, 521 F.2d at 157-58 (citation omitted).
Applying the appropriate Girsh factors to the matter sub judice, the court is
satisfied that the agreement reaches a fair and reasonable compromise between the
parties. Significantly, the cost of litigating has already outpaced the monetary value
of Bettger’s claims. See In re Cendant Corp. Litig., 264 F.3d 201, 233 (3d Cir. 2001)
(“This factor captures the probable costs, in both time and money, of continued
litigation.” (internal quotation marks omitted)). Bettger’s maximum possible
recovery is $8,674.02, whereas, as of September 14, 2014, her attorneys’ fees totaled
$43,277.50. (Doc. 55 at 9, Ex. A). Although this matter commenced as a putative
collective action, it can no longer be described as complex—a single plaintiff asserts
only one claim. Even so, the relative expense of further litigation weighs strongly in
favor of settlement.
Furthermore, the court finds that the parties obtained an “adequate
appreciation of the merits before negotiating.” Deitz, 2013 WL 2338496, at *6
(quoting In re Prudential Ins. Co. Am. Sales Practice Litig. Agent Actions, 148 F.3d
283, 318 (3d Cir. 1998)); cf. In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prods.
Liab. Litig., 55 F.3d 768, 814 (3d Cir. 1995) (“[T]he inchoate stage of case
development reduces our confidence that the proceedings had advanced to the
point that counsel could fairly, safely, and appropriately decide to settle the
action.”). Counsel for the parties completed fact discovery before fully briefing
Crossmark’s motion for summary judgment and motion in limine. (Docs. 26, 34).
The court’s subsequent rulings narrowed the scope of the lawsuit and precluded
Bettger from introducing certain types of evidence at trial. (Doc. 38). Shortly after
submitting pretrial memoranda, the parties commenced settlement discussions
leading to the instant compromise. Considering the parties’ awareness of the
litigable issues at this advanced stage of the proceedings, the court has no doubt
that the parties, as well as their respective counsel, appreciate the merits of the
Moreover, as discussed supra, the parties have clearly set forth the challenges
that Bettger would face establishing liability and damages at trial. See Gen. Motors,
55 F.3d at 814 (“By evaluating the risks of establishing liability [and damages], the
district court can examine what the potential rewards (or downside) of litigation
might have been . . . .”). To accomplish this, Bettger would be required (1) to
demonstrate that Crossmark willfully violated the FLSA and (2) to prove the
amount and extent of her uncompensated overtime work. Given the relative
paucity of evidence on these points, Bettger’s success at trial is far from guaranteed.
Ultimately, if the litigation resolved in her favor, Bettger would obtain
$8,674.02 in damages in addition to a full award of attorneys’ fees and costs.
Although Crossmark does not address its ability to withstand a judgment in excess
of its obligations under the proposed settlement, it notes that “it risk[s] an award of
counsel fees substantially greater than the compromise amount should it go to trial
and lose.” (Doc. 55 at 10). Conversely, if Crossmark were to prevail, Bettger would
be responsible for covering her attorneys’ fees and costs, and her overtime work
would be left uncompensated. These calculations are speculative at best, however,
given the uncertain outcome if the case went to trial. See Gen. Motors, 55 F.3d at
806 (“This inquiry measures the value of the settlement itself to determine whether
the decision to settle represents a good value for a relatively weak case or a sell-out
of an otherwise strong case.”). Under the terms of the proposed settlement, Bettger
receives $6,597.09 in damages and $16,502.90 for attorney’s fees and costs.
Considering all of the applicable Girsh factors, and especially in light of the risks of
proceeding to trial and the relative costs of continued litigation, the court finds that
the proposed settlement is fair and reasonable.
Release of Claims Provisions
Finally, the court must determine whether the proposed settlement furthers
or “impermissibly frustrates” the implementation of the FLSA in the workplace.
Altenbach, 2013 WL 74251, at *1; see McGee, 2014 WL 2114582, at *2; Brown, 2013
WL 5408575, at *1; Dees, 706 F. Supp. 2d at 1241. Having carefully considered the
terms of the agreement, the court finds that the overly broad release provisions are
antithetical to the FLSA and therefore must be excluded. (See Doc. 55 Ex. C ¶¶ 4.1,
District courts reviewing proposed FLSA settlements may require litigants to
limit the scope of waiver and release provisions to “claims related to the specific
litigation” in order to ensure equal bargaining power between the parties.
Singleton v. First Student Mgmt. LLC, Civ. A. No. 13-1744 JEI/JS, 2014 WL 3865853,
at *8-9 (D.N.J. Aug. 6, 2014); see Brumley, 2012 WL 1019337, at *8 (“[W]orkers
seeking to recover backpay may be willing to waive unknown claims in order to
access wrongfully withheld wages as soon as possible. . . .”); Hogan v. Allstate
Beverage Co., 821 F. Supp. 2d 1274, 1282 (M.D. Ala. 2011) (“[Pervasive release]
provisions confer a partially offsetting benefit on the employer that is ancillary to
the bona-fide dispute over FLSA coverage and wages due.” (internal quotation
marks omitted)); Moreno v. Regions Bank, 729 F. Supp. 2d 1346, 1351 (M.D. Fla.
2010) (“Although inconsequential in the typical civil case (for which settlement
requires no judicial review), an employer is not entitled to use an FLSA claim . . . to
leverage a release from liability unconnected to the FLSA.”); cf. In re Wells Fargo
Wage & Hour Emp’t Practices Litig. (No. III), No. H-11-2266, 2014 WL 1882642, at *6
(S.D. Tex. May 12, 2014) (“[T]he release appropriately applies only to wage and hour
claims and is thus not overly broad.”). In addition, the Third Circuit requires all
waivers of employment discrimination claims to be made “knowingly and willfully”
and directs courts to consider the totality of the circumstances when assessing the
validity of such waivers. Cuchara v. Gai-Tronics Corp., 129 F. App’x 728, 730-31 (3d
Cir. 2005) (quoting Coventry v. U.S. Steel Corp., 856 F.2d 514, 522 (3d Cir.1988)).
The relevant totality of the circumstances test is comprised of a list of factors,
including “the clarity and specificity of the release language” and “whether the
consideration given in exchange for the waiver and accepted by the employee
exceeds the benefits to which the employee was already entitled by contract or
law.”4 Cuchara, 129 F. App’x at 731 (quoting Cirillo v. Arco Chem. Co., 862 F.2d 448,
451 (3d Cir. 1988)).
The court finds the release provisions inappropriately comprehensive; the
provisions preclude Bettger from raising any and all claims she may have against
Crossmark arising prior to the execution date of the agreement and require her to
dismiss any charges of discrimination, harassment, or retaliation currently pending
with any government agency. These terms extend far beyond the pale of the FLSA
claim sub judice. The court has no information regarding the value of the released
claims to the parties, and the parties fail to provide any explanation for the
agreement’s far-reaching waivers. See Hogan, 821 F. Supp. 2d at 1284 (“[T]he
waiver provision, if allowed, would have been extracted from [plaintiff] without any
independent compensation for it, as far as the record shows.”). The parties assert
that that the non-monetary terms of the settlement are reasonable in part because
Bettger has no additional claims against Crossmark. This assertion misses the
mark entirely. (Doc. 55 at 10 (“[T]he non-monetary terms of the settlement
agreement are reasonable under all of the circumstances. [Bettger] does not have
The complete list of factors is as follows: “(1) the clarity and specificity of the
release language; (2) the plaintiff’s education and business experience; (3) the
amount of time the plaintiff had for deliberation about the release before signing it;
(4) whether plaintiff knew or should have known his rights upon execution of the
release; (5) whether plaintiff was encouraged to seek, or in fact received benefit of
counsel; (6) whether there was an opportunity for negotiation of the terms of the
agreement; and (7) whether the consideration given in exchange for the waiver and
accepted by the employee exceeds the benefits to which the employee was already
entitled by contract or law.” Cuchara, 129 F. App’x at 731 (quoting Cirillo, 862 F.2d
any claim other than the instant wage claim.”)). Under the release provisions as
currently written, if Bettger discovers any potential cause of action arising from
events that predate the agreement’s execution, she will be barred from litigating
against Crossmark. Thus, Bettger is precluded from raising any claims founded
upon events taking place between commencement of her employment with
Crossmark in 1999 and finalization of the instant agreement. Applying the exacting
scrutiny mandated by the FLSA, the court is compelled to find that such a broad
waiver impermissibly frustrates the implementation of an otherwise fair and
Furthermore, the court lacks sufficient information to properly evaluate
whether Bettger’s waiver of employment discrimination claims is made knowingly
and willfully.5 See Cuchara, 129 F. App’x at 730-31 (citing Coventry, 856 F.2d at
522). Although the agreement endeavors to address this point, the Third Circuit
totality of the circumstances test requires more. (See Doc. 55 Ex. C ¶ 8.1 (“Bettger
understands that by signing this Agreement, she is agreeing to all of the provisions
set forth in the Agreement, and has read and understood each provision.”)). For
example, after reviewing the instant record, the terms of the settlement agreement,
and the parties’ supporting materials, the court is unaware of any “consideration
given [by Crossmark] in exchange for the waiver . . . [that] exceeds the benefits to
which [Bettger] was already entitled by contract or law.” Cuchara, 129 F. App’x at
The court notes that under the Older Workers Benefit Protection Act, 29
U.S.C. § 626, a heightened level of scrutiny applies to waivers of ADEA claims; each
factor from the totality of the circumstances test must be satisfied, and the burden of
proof lies with the employer. See Long v. Sears Roebuck & Co., 105 F.3d 1529, 1539
(3d Cir. 1997).
731 (quoting Cirillo, 862 F.2d at 451). Hence, one factor from the Third Circuit
totality of the circumstances test weighs against the waiver’s validity. Id.
Additionally, although the agreement states that Bettger “has no charges of
discrimination, harassment, and/or retaliation or any other claim pending” with any
state or federal government agency, it requires her to withdraw any pending
charges to the extent that they exist. (Doc. 55 Ex. C ¶ 5.2). Ultimately, on the record
sub judice, the court cannot find that Bettger’s release of employment
discrimination claims is knowing and voluntary.
In conclusion, the court is cognizant that the FLSA was enacted in part to
combat “inequalities in bargaining power between employers and employees.”
Lynn’s Food Stores, 679 F.2d at 1352 (citing Brooklyn Sav. Bank v. O’Neil, 324 U.S.
697, 706 (1945)). Tasked with ensuring that implementation of the FLSA is
furthered, not frustrated, by the parties’ agreement, the court cannot approve the
release provisions in their present form. See Altenbach, 2013 WL 74251, at *1;
Brumley, 2012 WL 1019337, at *8; Hogan, 821 F. Supp. 2d at 1282-84; Moreno, 729 F.
Supp. 2d at 1351-52; Dees, 706 F. Supp. 2d at 1241. Therefore, the court approves
only the provisions that release Crossmark from claims that fall within the ambit of
the FLSA and the Equal Pay Act and arise from the facts of the instant litigation;
the parties are directed to strike all additional terms of the release provisions from
paragraphs 4.1, 4.2, and 5.2 of the agreement.
For all of the foregoing reasons, the parties’ joint motion (Doc. 55) for judicial
approval of settlement will be granted in part and denied in part. An appropriate
order will issue.
/S/ CHRISTOPHER C. CONNER
Christopher C. Conner, Chief Judge
United States District Court
Middle District of Pennsylvania
January 22, 2015
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