Caswell et al v. The Ball Gentlemen's Club, LLC et al

Filing 29

MEMORANDUM AND ORDER granting 23 Motion for Settlement. The parties are further ORDERED to submit a joint stipulation of dismissal within thirty days of the date of this Order. Signed by Magistrate Judge H Bruce Guyton on 10/23/18. (JBR)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
AT KNOXVILLE
ANNA CASWELL and
TARA TAYLOR,
Plaintiffs,
v.
THE BALL GENTLEMEN’S CLUB, LLC,
et al.,
Defendants.

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No. 3:17-cv-316-TRM-HBG

MEMORANDUM AND ORDER
This case is before the undersigned pursuant to 28 U.S.C. § 636, the Rules of this Court,
the referral Order of the District Judge [Doc. 24]. The parties subsequently filed a Notice of
Consent [Doc. 26], and the District Judge referred the case for all further proceedings, including
entry of judgment. [Doc. 28].
Now before the Court is a Joint Motion for Approval of Settlement [Doc. 23]. The parties
appeared before the Court on October 19, 2018 for a motion hearing. Attorney Jesse Nelson
appeared on behalf of Plaintiffs.

Attorney Mary Beth Maddox was present on behalf of

Defendants. The Court has reviewed the Joint Motion and the history of this case. Accordingly,
for the reasons more fully stated below, the Court will GRANT the Joint Motion [Doc. 23].
I.

BACKGROUND
Plaintiffs filed suit against Defendants on July 24, 2017. [Doc. 1]. The Complaint alleges

that Plaintiffs were exotic dancers who worked for Defendants’ adult-oriented nightclub at various
times within the last three years. [Id. at ¶ 11]. Plaintiffs allege that Defendants did not pay them
any wages, and that Defendants instead designated Plaintiffs as independent contractors to

intentionally avoid paying wages and other employment benefits. [Id. at ¶ 21]. The Complaint
continues that Plaintiffs were required to perform pursuant to a rotation established by Defendants
[Id. at ¶ 14], Plaintiffs were required to work a defined shift, which was subject to change at
Defendants’ discretion [Id. at ¶ 16], and that Defendants provide the lighting, sound system, and
stage to be used by Plaintiffs. [Id. at ¶ 18]. Further, Plaintiffs allege that Defendants controlled
the prices, method, and manner of each category of dance that Plaintiffs were obligated to perform
[Id. at ¶ 20], as well as required Plaintiffs to pay them a portion of the payment they received for
all private dances they performed and a minimum fee for each shift they worked. [Id. at ¶ 23–24].
Therefore, Plaintiffs aver that Defendants violated the Fair Labor Standards Act (“FLSA”)
by falsely claiming that they were independent contractors, instead of employees, as well as by
failing to pay Plaintiffs’ any wages, including applicable overtime wages. [Id. at ¶ 21–22, 29–31].
Further, Plaintiffs submit that Defendants were aware that they should be classified as employees
and continued to fail to comply with the FLSA. [Id. at ¶ 32].
II.

POSITIONS OF THE PARTIES
The parties filed a Joint Motion [Doc. 23], requesting that the Court approve their

settlement agreement and that the Court dismiss the case with prejudice. The parties explain that
they have a bona fide dispute regarding Plaintiffs’ entitlement to wages owed pursuant to the
FLSA, including whether Plaintiffs qualified as an independent contractor or an employee, and the
potential nonreporting of tip income. The parties have determined to settle the case in order to
avoid protracted litigation. The parties represent to the Court that the settlement is fair and
reasonable and adequately compensates Plaintiffs for their disputes. Further, Plaintiffs appeared
at the hearing and testified that they understood that they were releasing all potential claims, that
they had no objection to the proposed settlement, and that they were satisfied with the amount
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received and with the resolution of their claims. In addition, the parties state that the settlement
agreement is intended to resolve and satisfy all Plaintiffs’ wage and hour claims, including the
remedies available to Plaintiffs under the FLSA and state law, such as back wages, potential
liquidated damages, attorney’s fees, and costs. Lastly, both parties assert that the agreed amount
of reasonable attorney fees to be awarded to Plaintiffs’ counsel did not detract from Plaintiffs’
recovery.
III.

ANALYSIS
The Court’s approval of settlements is only required in certain circumstances. Courts must

ensure that the settlement of the FLSA claim is a “fair and reasonable resolution of a bona fide
dispute over FLSA provisions.” Lynn’s Food Stores v. United States, 679 F.2d 1350, 1355 (11th
Cir. 1982). The compromise regarding the FLSA claim should “reflect a reasonable compromise
over issues, such as FLSA coverage or computation of back wages, that are actually in dispute.”
Id. In addition, where the settlement agreement proposes an award of attorney’s fees, such fees
must be reasonable. Schneider v. Goodyear Tire & Rubber, Co., No. 5:13-cv-2741, 2014 WL
2579637, *2 (N.D. Ohio June 9, 2014).
During the hearing, Plaintiffs explained that they did not engage in written discovery, but
the attorneys for both sides were familiar with the precise case law on the relevant issues and
participated in candid conversations regarding the disputes in this matter. The parties explained
that the settlement amount was calculated based upon Plaintiffs’ dates of employment and
estimated hours worked over those respective periods. Additionally, with respect to the attorney’s
fees, Plaintiffs’ counsel stated that the attorney’s fee was separate from the award to Plaintiffs.
In the instant case, the Court has reviewed the settlement agreement, and the Court finds
that it is fair and reasonable. The Court notes that both parties are represented by counsel and that
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both parties acknowledge that a bona fide legal dispute exists (i.e., whether Plaintiffs qualify as
independent contractors versus employees). The parties engaged in settlement discussions and
determined that settling this case is in their best interests. Additionally, the parties represent that
the agreement provides that each Plaintiff will be paid a settlement to represent both their back
wages and liquidated damages. Plaintiffs also testified that they were satisfied with the overall
resolution of their claims.
Further, the Court notes that, by settling, Plaintiffs are spared the burden of proving their
claims and damages to a jury, and they are being fairly compensated with the wages of which they
were allegedly deprived. Moreover, the Court finds that the settlement agreement resolves a bona
fide dispute over FLSA provisions. Accordingly, the Court finds that the parties’ settlement
agreement is a “fair and reasonable resolution of a bona fide dispute over FLSA provisions.”
Lynn’s Food Stores, 679 F.2d at 1355. The Court has also reviewed the request for attorney’s fees
in this case, and the Court finds the fee request reasonable, given that the attorney’s fees are
separate from Plaintiffs’ award in this matter.
III.

CONCLUSION
Based upon the foregoing, the Court hereby GRANTS the Joint Motion for Approval of

Settlement [Doc. 23]. The parties are further ORDERED to submit a joint stipulation of dismissal
within thirty days of the date of this Order.
IT IS SO ORDERED.
ENTER:

United States Magistrate Judge

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