Waltz v. Aveda Transportation and Energy Services, Inc. et al

Filing 53

MEMORANDUM OPINION AND ORDER: IT IS HEREBY ORDERED that 51 Consent MOTION for Approval of the FLSA Settlement is GRANTED. The Clerk is direct to close the case. Signed by Honorable Matthew W. Brann on 7/7/2017. (See Memorandum Opinion and Order for complete details.) (jn)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
RANDY WALTZ, on behalf of himself
and similarly situated employees,
Plaintiffs,
v.
AVEDA TRANSPORTATION AND
ENERGY SERVICES INC., and RODAN
TRANSPORT USA LTD,
Defendants.

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No. 4:16-CV-00469

(Judge Brann)

MEMORANDUM OPINION and ORDER
JULY 7, 2017
Before the Court for disposition is Plaintiffs Randy Waltz, David Canada,
Toby Hayes, Mark Ortiz, Gary Solinger, John Tinkle, and Michael Tinkle’s
(“Plaintiffs”) Unopposed Motion for Approval of FLSA Settlement. For the
following reasons, this Motion will be granted.
I.

BACKGROUND

On March 17, 2016, Plaintiff Randy Waltz filed a Complaint1 against
Defendants Aveda Transportation and Energy Services Inc. and Rodan Transport

1

Complaint (ECF No. 1).

1

USA Ltd (“Defendants”) alleging (1) a collective action under FLSA Section
16(b)2 for failure to pay an overtime premium as required by 29 U.S.C.
§ 207(a)(1), and (2) a class action under Federal Rule of Civil Procedure 23 for
violations of the Pennsylvania Minimum Wage Act.3 Defendants Aveda
Transportation and Energy Services Inc. and Rodan Transport USA Ltd employ
hundreds of employees engaged in various services at oil and gas rigs throughout
the United States.4 Those employees, Plaintiffs in the instant litigation, were
employed in the Field Supervisor/Truck Push (“FSTP”) position. During their
terms of employment as FSTPs, Plaintiffs were paid on a day rate basis.5 Because
they allege that their work week often consisted of greater than 40 hours, Plaintiffs
argue that Defendants’ failure to pay overtime premium compensation resulted in a
violation of the FLSA.6
Following preliminary discovery in this matter, the Court granted, by
Memorandum Opinion and Order dated December 27, 2016, Plaintiffs Randy
Waltz and Gary Solinger’s Motion for Conditional Certification.7 This conditional
certification, and the dissemination of Notice and Consent Forms to over thirty 30
2

29 U.S.C. § 216(b).

3

43 P.S. §§ 333.101 et seq.

4

Compl. ¶¶ 13–14, at 3.

5

Compl. ¶ 16, at 3.

6

Id. ¶¶ 18–19, at 3–4.

7

ECF No. 37.

2

individuals, resulted in five additional plaintiffs joining the suit—David Canada,
Toby Hayes, Mark Ortiz, John Tinkle, and Michael Tinkle.8 The parties
subsequently engaged in further discovery and settlement negotiations.9
Settlement in the amount of $145,000.00 has since been reached. In the
instant motion, the parties jointly request that this Court approve the proposed
settlement agreement pursuant to Section 16(b) of the FLSA, codified at 29 U.S.C.
§ 216(b).
II.

DISCUSSION

The FLSA was enacted for the purpose of protecting all covered workers
from substandard wages and oppressive working hours.10 Congress recognized
that “due to unequal bargaining power as between employer and employee, certain
segments of the population required federal compulsory legislation to prevent
private contracts on their part which endangered national health and efficiency and
as a result the free movement of goods in interstate commerce.”11 The provisions
of the statute are mandatory and not subject to negotiation and bargaining between

8

ECF Nos. 43, 45, 48–50.

9

ECF Nos. 52, at 3.

10

Barrentine v. Arkansas-Best Freight System, 450 U.S 728, 739 (1981); 29 U.S.C. § 202(a).

11

Brooklyn Savings Bank v. O’Neil, 324 U.S. 697, 706–07 (1945).

3

employers and employees because allowing waiver by employees or releases of
employers would nullify the purposes of the act.12
Although the United States Court of Appeals for the Third Circuit has not
addressed the issue, its district courts have taken the position stated by the
Eleventh Circuit in Lynn’s Food Stores, Inc. v. United States Dept. of Labor that
court approval is required for proposed settlements in a FLSA lawsuit brought
under 29 U.S.C. § 216(b).13 Accordingly, this Court must scrutinize the proposed
settlement of the parties and determine if it is “a fair and reasonable resolution of a
bona fide dispute over FLSA provisions.”14 Court review of a proposed settlement
agreement therefore proceeds in two stages: first, the court assesses whether the
parties’ agreement is fair and reasonable to the plaintiff employee; second, it
determines whether the settlement furthers or “impermissibly frustrates”
implementation of the FLSA in the workplace.15
Having reviewed the Settlement Agreement reached by parties, I find that it
is both a “fair and reasonable resolution of a bona fide dispute over FLSA
12

See Lynn’s Food Stores, Inc. v. United States Dept. of Labor, 679 F.2d 1350, 1352 (11th Cir.
1982); O’Neil , 324 U.S. at 707; D.A. Schulte, Inc. v. Gangi, 328 U.S. 108 (1946).
13

See, e.g., Cuttic v. Crozer-Chester Med. Ctr., 868 F.Supp.2d 464 (E.D.Pa. 2012) (Robreno,
J.); Morales v. PepsiCo, Inc., Civil Action No. 11-CV-6275, 2012 WL 870752 (D.N.J. Mar. 14,
2012) (Thompson, J.); Bettger v. Crossmark, Inc., Civil Action No. 13-CV-2030, 2015 WL
279754 (M.D.Pa. Jan. 22, 2015) (Conner, C.J.).
14

See Lynn’s Food Stores, 679 F.2d at 1354; Altenbach v. Lube Center, Inc., Civil Action No.
08-CV-02178, 2013 WL 74251, at *1 (M.D. Pa. Jan. 4, 2013) (Kane, J.).
15

Altenbach, 2013 WL 74251, at *1.

4

provisions,” and does not impermissibly frustrate implementation of the FLSA in
the workplace. My reasoning is as follows.
A.

The Settlement Agreement is a Fair and Reasonable Settlement
of a Bona Fide Dispute.

As threshold matter, I must first address whether the proposed settlement
resolves a bona fide factual dispute, or one in which “there is some doubt as to
whether the plaintiff would succeed on the merits at trial.”16 Having reviewed the
submissions of the parties in this matter, I am satisfied that proposed settlement
agreement meets that threshold. Specifically, the parties dispute, in good faith, (1)
whether Plaintiffs are overtime exempt under the FLSA’s “motor carrier
exemption”17 as codified in 29 U.S.C. § 213(b)(1),18 (2) whether Defendants’
alleged misclassification of them as overtime-exempt constitutes the type of
“willful” violation that triggers a three-year – rather than a two-year – limitations
period under the FLSA, as codified at 29 U.S.C. § 255(a),19 and (3) the exact
number of hours each of Plaintiffs worked over 40 hours per week.20
16

Bettger, 2015 WL 279754, at *4 (citing, inter alia, Lynn’s Food Stores, 679 F.2d at 1354).

17

While Defendants argue the applicability of the “motor carrier exemption,” Plaintiffs counter
that they also drove pick-up trucks weighing under 10,000 pounds. See McMaster v. Eastern
Armored Services, Inc., 780 F.3d 167 (3d Cir. 2015) (explaining that the motor carrier exemption
does not apply when the employees’ duties include driving vehicles weighing less than 10,000
pounds). Defendants, however, aver that these duties were de minimis such that plaintiffs cannot
escape the reach of the motor carrier exemption.
18

ECF No. 52, at 5.

19

Id. at 6.

20

Id.

5

Having found the existence of a bona fide dispute, the Court must next
examine whether the settlement agreement represents a “fair and reasonable
resolution” of that dispute. To make that determination, district courts have
considered the factors outlined in Girsh v. Jepson,21 concerning the fairness of a
proposed class action settlement.22 In Girsh v. Jepson, the Third Circuit set out 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.23
Consideration of these factors dictates that the terms of the settlement
agreements reached between the parties are both fair and reasonable. First, the
parties have expressed that, absent settlement, continued litigation would be costly,
requiring both the depositions of five more Plaintiffs and their supervisors, and the
location, review, and analysis of thousands of pages of fleet assignments
documents relevant to the determining the particular vehicles driven by particular
Plaintiffs on particular days. Second, I note that the individual employees to this
21

521 F.2d 153, 157 (3d Cir. 1975)

22

See, e.g., Bettger, 2015 WL 279754, at *7; Altenbach, 2013 WL 74251, at *2.

23

Girsh, 521 F.2d at 157–58.

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suit have expressed their assent to the terms of the settlement as each plaintiff has
personally executed a settlement agreement.24 Third, while the additional
discovery in this case would have been necessary, the parties have to date
exchanged substantial discovery both before and after the Court’s resolution of a
contested conditional certification motion such that they have an “adequate
appreciation of the merits of the case.”25 Fourth, there is some risk that Plaintiffs
would be unable to establish liability and damages. As noted above, the merits of
this case hinge on several contested issues, i.e. (i) whether Plaintiffs are covered by
the motor carrier exemption; (ii) whether a two-year or three-year limitations
period applies; and (iii) whether Plaintiffs really worked as much overtime as they
claim. Fifth, I find that the eighth and ninth factors — the range of both the
reasonableness of the settlement fund in light of the best possible recovery and the
attendant risks of litigation— weigh in favor of settlement approval. The parties
specifically aver that plaintiffs here recover the amount of overtime wages they
would have won at trial if they: (i) defeated Defendants’ motor carrier exemption

24

ECF No. 51-1.

25

Craig v. Rite Aid Corp., Civil Action No. 08-CV-2317, 2013 WL 84928, at *9 (M.D.Pa. Jan.
7, 2013)(Jones, J.)(quoting In re General Motors Corp. Pick-Up Truck Fuel Tank Products
Liability Litigation, 55 F.3d 768, 813 (3rd Cir. 1995)).

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defense; (ii) obtained a three-year limitations period; and (iii) proved that he
worked 10 hours on every shift.26
B.

The Settlement Agreement Does Not Impermissibly Frustrate
the Implementation of the FLSA in the Workplace.

I must now consider whether the terms of the settlement agreements
impermissibly frustrate implementation of the FLSA in the workplace.
Examination of the Settlement Agreements at issue reveals the presence of both
confidentiality and general release provisions.27 While courts have cautioned
against the approval of settlement agreements containing these provisions,28
analysis of the instant agreements reveals that (1) Plaintiffs cannot be sanctioned
for violating the confidentiality provision,29 and (2) the release provision is narrow
and covers only wage and hour claims “reasonably related” to the claims asserted

26

The ability of defendants to withstand a greater judgment is not an applicable factors here as
there is no evidence regarding Defendant’s ability to withstand a higher judgment. See Tavares v.
S-L Distribution Co., Inc., Civil Action No. 13-CV-1313, 2016 WL 1743268, at *8 (M.D.Pa.
May 2, 2016)(Jones, J.).
27

ECF No. 51-1 ¶¶ 4, 8.

28

See, e.g., Brown v. TrueBlue, Inc., Civil Action No. 10-CV-00514, 2013 WL 5408575, at *3
(M.D.Pa. Sept. 25, 2013)(Kane, J.)(citing Brumley v. Camin Cargo Control, Inc., Civil Action
No. 08-CV-1798, 2012 WL 300583, at *3 (D.N.J. Feb.1, 2012) (collecting cases)); Altenbach,
2013 WL 74251, at *3.
29

See Diclemente v. Adams Outdoor Advertising, Inc., Civil Action No. 15-CV-0596, 2016 WL
3654462, at *4 (M.D.Pa. July 8, 2016)(Mannion, J.)(approving a settlement agreement with a
confidentiality provision allowing for disclosure of the case’s conclusion without any allowable
sanctions or retaliation for breach).

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in the underlying complaint.30 This Court has previously held that such properly
cabined provisions do not “frustrate the implementation of the FLSA.31
C.

The Settlement Agreement Contains a Reasonable Provision for
Attorney’s Fees.

Section 16(b) of the FLSA provides that the court “shall, in addition to any
judgment awarded to the plaintiff . . . allow a reasonable attorney’s fee to be paid
by the defendant, and costs of the action.”32 Courts within the Third Circuit have
predominantly used the percentage-of-recovery method, in which a fixed portion of
the settlement fund is awarded to counsel, to determine a reasonable attorney’s fee
in wage and hour cases.33 The factors which the court considers under the
percentage-of-recovery method to evaluate the appropriateness of an attorneys’ fee
aware are:
(1) the size of the fund created and the number of persons benefitted; (2) the
presence or absence of substantial objections by members of the class to the
settlement terms and/or fees requested by counsel; (3) the skill and
efficiency of the attorneys involved; (4) the complexity and duration of the

30

Cf. Bettger, 2015 WL 279754, at *9 (finding a release of claims provision “inappropriately
comprehensive” which precludes plaintiff from “raising any and all claims she may have against
[defendant] 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.”).
31

See Schwartz v. Pennsylvania State University, Civil Action No. 15-CV-2176, 2017 WL
1386251 (M.D.Pa. Apr. 18, 2017).
32

29 U.S.C. § 216(b).

33

Kraus v. PA Fit II, LLC, 155 F.Supp. 3d 516, 533 (E.D.Pa. Jan. 11, 2016).

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litigation; (5) the risk of nonpayment; (6) the amount of time devoted to the
case by plaintiffs' counsel; and (7) the awards in similar cases.34
These factors need not be applied in a formulaic way, and in the Court’s analysis,
one factor may outweigh the others.35 The award of attorneys’ fees therefore lies
squarely within the discretion of the district court, and “a thorough judicial review
of fee applications is required in all class action settlements.”36
The preliminary application of the above factors weighs in favor of
approving the requested attorneys’ fees. First, I note that the Settlement
Agreement provides for attorneys’ fees of $45,356.54, which accounts for 31.28%
of the $145,000.00 common settlement fund. In the Plaintiffs’ Brief in Support of
their Motion for Approval of the FLSA Settlement, Plaintiffs aver that such a fee is
reasonable given (1) the lack of objection to the fee award by Plaintiffs, (2) the
skill and efficiency of the plaintiff attorneys involved, (3) the complexity and
duration of this litigation, (4) the risk of nonpayment from a contingency fee basis,
and (5) the amount of time that was devoted to the case by Plaintiffs’ counsel.37
They further allege that this fee of roughly 31% falls right within the range of

34

Id. (citing Gunter v. Ridgewood Energy Corp., 223 F.3d 190, 195 n. 1 (3d Cir. 2000).

35

Id.

36

In re Gen. Motors Corp. Pick–Up Truck Fuel Tank Prods. Liability Litig., 55 F.3d 768, 819
(3d Cir. 1995).
37

ECF No. 52 at 12–14.

10

attorneys’ fees approved by courts in similar cases.38 Having reviewed this
submission by Plaintiffs in conjunction with the above Gunter factors, I am in
agreement that the requested attorneys’ fees of $ 45,356.54, or 31.28% of the
settlement amount reached, is reasonable given the facts of the case.39
However, when attorneys’ fees in an FLSA action are awarded pursuant to a
percentage-of-recovery method, the United States Court of Appeals for the Third
Circuit has suggested that it is “sensible” for district courts to “cross-check” that
percentage-of-recovery calculation with a lodestar calculation.40 This crosscheck
is performed by dividing the proposed fee award by the lodestar calculation,
resulting in a lodestar multiplier.”41 To perform this cross-check, I must therefore
first determine the proper lodestar figure. To reach this calculation, the “initial
estimate of a reasonable attorney’s fee is properly calculated by multiplying the
number of hours reasonably expended on litigation times a reasonable hourly
rate.”42

38

Id.

39

See, e.g., Chung v. Wyndham Vacation Resorts, Civil Action No. 14-CV-00490, 2015 WL
3742187, at *3 (M.D.Pa. June 15, 2015)(Mariani, J.)(approving attorney’s fees which amount to
31.75% of the total settlement amount); Crevatas v. Smith Mgmt. and Consulting, LLC, Civil
Action No. 3:15-CV-2307, 2017 WL 1078174, at *5 (M.D.Pa. Mar. 22, 2017)(Mannion,
J.)(approving attorney’s fees which amount to 31.36% of the total settlement amount).
40

In re Prudential Ins. America Sales Practice Litig. Agent Actions, 148 F.3d 283, 333 (3d Cir.
1998).
41
42

In re AT & T Corp. Sec. Litig., 455 F.3d 160, 164 (3d Cir. 2006).
Blum v. Stetson, 465 U.S. 886, 888 (1984).

11

As noted by Plaintiffs’ counsel, the final lodestar calculation yields an award
of $84,288.50 in attorneys’ fees.43 When the proposed attorneys’ fees award of
$45,356.54 is then divided by the total lodestar calculation of $84,288.50, I find
that a lodestar multiplier of .54 results, justifying approval of this fee award.
AND NOW, in accordance with the above reasoning, IT IS HEREBY
ORDERED that:
1. Plaintiffs’Unopposed Motion for Approval of the FLSA Settlement (ECF
No. 51) is GRANTED.
2. The Clerk is directed to close the case.

BY THE COURT:

s/ Matthew W. Brann
Matthew W. Brann
United States District Judge

43

ECF No. 51-2.

12