Stepp v. Seton Healthcare

Filing 62

ORDER GRANTING 55 Motion for Settlement Signed by Judge Robert Pitman. (afd)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION
JENNY STEPP, individually, and on behalf of
all others similarly situated,
Plaintiffs,
v.
SETON FAMILY OF HOSPITALS, et al.,
Defendants.

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1:16-CV-1251-RP

ORDER
Before the Court is the parties’ Joint Motion for Settlement and to Dismiss with Prejudice.
(Dkt. 55). The parties request that the Court approve their confidential settlement agreement
regarding Plaintiff Jenny Stepp’s (“Stepp”) claims brought under the Fair Labor Standards Act
(“FLSA”), 29 U.S.C. § 201, et seq. (Mot. Approval, Dkt. 55, at 2). After reviewing the motion, the
settlement terms, the pleadings, and applicable law, the Court will grant the parties’ motion.
I. BACKGROUND
Stepp brought this FLSA suit against the Seton Family of Hospitals (“Seton”) as a collective
action on behalf of herself and others similarly situated. (Compl., Dkt. 1). Stepp worked as a nurse at
a Seton hospital. (Id. ¶ 4). She alleges that Seton required nurses responsible for direct patient care to
remain on duty during meal breaks, but Seton automatically deducted 30 minutes of time from these
nurses’ shifts on the assumption that the nurses would be able to find a 30-minute period in which
to enjoy a meal break. (Id. ¶ 2). According to Stepp, however, nurses were frequently interrupted
when they attempted to take meal breaks, and as a result, they sometimes worked over 40 hours a
week but were not compensated for their overtime work. (Id. ¶¶ 2–4). Stepp brought the instant suit
to recover this overtime pay under the FLSA.

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On July 9, 2018, the Court denied Stepp’s motion to conditionally certify a collective action.
(Dkt. 44). Subsequently, the other plaintiffs in this action voluntarily dismissed their claims and
withdrew from this litigation. (See Dkts. 48, 49). Only Stepp remains as a plaintiff, and on January 15,
2019, she and the defendants filed a joint motion to settle this case and dismiss Stepp’s claims with
prejudice. (Dkt. 55).
II. LEGAL STANDARD
The FLSA was enacted to protect all covered workers from substandard wages and
oppressive working hours. Barrentine v. Arkansas–Best Freight Sys., 450 U.S. 728, 739 (1981). The
FLSA permits suit by “one or more employees for and in behalf of himself or themselves and other
employees similarly situated” to recover unpaid minimum wages, overtime compensation, and
liquidated damages from employers who violate the statute’s provisions. 29 U.S.C. § 216(b).
In general, FLSA claims cannot be waived; however, they “may be compromised” after a
court reviews and approves a settlement. Bodle v. TXL Mortg. Corp., 788 F.3d 159, 164 (5th Cir.
2015); Pedigo v. Austin Rumba, Inc., 722 F. Supp. 2d 714, 736 (W.D. Tex. 2010); see also Sims v. Hous.
Auth. City of El Paso, No. EP-10-CV-109-PRM, 2012 WL 10862119, at *2 (W.D. Tex. Feb. 29, 2012)
(noting a dearth of Fifth Circuit precedent on this issue). Courts may approve a settlement if it
reflects “a reasonable compromise over issues” that are “actually in dispute.” Lynn’s Food Stores, Inc. v.
United States, 679 F.2d 1350, 1354 (11th Cir. 1982). “The primary focus of the Court’s inquiry in
deciding whether to approve the settlement of a FLSA collective action is not on due process
concerns as it would be for a Rule 23 class action . . . . Rather[,] the Court primarily focuses on
ensuring that an employer does not take advantage of its employees in settling their claim for
wages.” Collins v. Sanderson Farms, Inc., 568 F. Supp. 2d 714, 719 (E.D. La. 2008).

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III. DISCUSSION
In reviewing a settlement of FLSA claims, the reviewing court must determine whether there
is a bona fide dispute and whether the settlement is a “fair and reasonable resolution” of that
dispute. Lynn’s Food Stores, 679 F.2d at 1355.
A. Bona Fide Dispute
First, courts must look to “whether there exists a bona fide dispute” under the FLSA.
Martinez v. Bohls Bearing Equip. Co., 361 F. Supp. 2d 608, 631 (W.D. Tex. 2005). The FLSA requires
that employers pay overtime compensation to employees who work more than 40 hours in a
workweek. 29 U.S.C. § 207(a)(1). The Act exempts from this requirement any employee who works
in a bona fide executive, administrative, or professional capacity. Id. § 213(a)(1). The FLSA requires
that non-exempt employees be compensated at the overtime rate of at least one and one-half times
their regular rate for hours worked in excess of 40 hours per week. 29 U.S.C. § 207(a)(1).
Seton disputes Stepp’s substantive allegations. Seton alleges that the 30-minute meal break
deduction was subject to several override procedures within the nurses’ control, and denies that its
meal break compensation practice violates the FLSA. (Ans., Dkt. 15, ¶¶ 2, 3, 5). Although Seton
admits that it knew its employees sometimes worked in excess of their scheduled shifts, it denies
that its employees were not appropriately compensated. (Id. ¶ 8). The Court therefore concludes that
there are bona fide disputes in this case under the FLSA.
B. Fair and Reasonable Resolution
Having found a bona fide dispute, the Court looks to whether the proposed settlement
agreement is fair and reasonable. In determining whether the settlement agreement is fair and
reasonable, “there is a strong presumption in favor of finding a settlement fair.” Sims v. Hous. Auth.
City of El Paso, No. EP-10-CV-109-PRM, 2012 WL 10862119, at *3 (W.D. Tex. Feb. 29, 2012)
(quoting Domingue v. Sun Elec. & Instrumentation, Inc., No. 09-682, 2010 WL 1688793, at *1 (M.D. La.
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2010)). The fact that a “settlement is the negotiated result of an adversarial proceeding is an
indication of its fairness.” Id. “[T]he Rule 23(e) standard encompasses the ‘fair and reasonable’
settlement standard of the FLSA collective action, and cases interpreting Rule 23(e) are analogous
and applicable to the instant FLSA action.” Dyson v. Stuart Petroleum Testers, Inc., No. 1:15-CV-282,
2016 WL 815355, at *2 (W.D. Tex. Feb. 29, 2016) (quoting Altier v. Worley Catastrophe Resp., LLC,
Nos. 11–241, 11–242, 2012 WL 161824, at *14 (E.D. La. Jan. 18, 2012)). The Court thus considers
six factors:
(1) whether the settlement was a product of fraud or collusion; (2) the complexity,
expense, and likely duration of the litigation; (3) the stage of the proceedings and the
amount of discovery completed; (4) the factual and legal obstacles [to] prevailing on
the merits; (5) the possible range of recovery and the certainty of damages; and (6)
the respective opinions of the participants, including class counsel, class
representative, and the absent class members.
Parker v. Anderson, 667 F.2d 1204, 1209 (5th Cir. 1982).
The Court has reviewed the terms of the confidential settlement agreement and concludes
that it is fair and reasonable. There is no evidence before the Court of any fraud or collusion. The
parties are represented by counsel experienced in FLSA disputes and reached a settlement after
months of arms-length negotiation. (Mot. Approval, Dkt. 55, ¶¶ 3–4). Settlement at this stage
reduces the expense of further litigation as the parties have not indicated that discovery is complete
and have not filed dispositive motions. As noted above, the parties disagree about fundamental legal
and factual issues on Stepp’s claims. The Court has evaluated the amount of recovery Stepp will
receive, and there are no other plaintiffs in this action. Finally, the parties are represented by counsel,
and all agree that the settlement is a fair and reasonable compromise of Stepp’s claims. (Id. ¶ 4). The
Court finds that the above factors weigh in favor of approving the settlement agreement filed under
seal.

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IV. CONCLUSION
The Court finds that the settlement agreement is a fair and reasonable settlement of a bona
fide dispute. Accordingly, IT IS ORDERED that the parties’ Joint Motion for Settlement and to
Dismiss with Prejudice, (Dkt. 55), is GRANTED, and the settlement is APPROVED. This action
is DISMISSED WITH PREJUDICE.
SIGNED on March 25, 2019.

_____________________________________
ROBERT PITMAN
UNITED STATES DISTRICT JUDGE

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