Cazeau et al v. TPUSA
Filing
78
MEMORANDUM DECISION AND ORDER denying 44 Joint Motion for Certification and Approval of Collective Action Settlement; denying 71 Joint Motion for Decision. Signed by Judge Robert J. Shelby on 6/2/2020. (lnp)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
JACQUELINE CAZEAU, DAWN
STOJKOVIC, MICHAEL ANDERSON,
individually and on behalf of all others
similarly situated,
MEMORANDUM DECISION AND
ORDER DENYING JOINT MOTION
FOR CERTIFICATION AND
APPROVAL OF COLLECTIVE ACTION
SETTLEMENT
Plaintiffs,
Case No. 2:18-cv-00321-RJS-CMR
v.
Chief Judge Robert J. Shelby
TPUSA, Inc., dba TELEPERFORMANCE
USA,
Magistrate Judge Cecilia M. Romero
Defendant.
Plaintiffs Jacqueline Cazeau, Dawn Stojkovic, and Michael Anderson initiated this Fair
Labor Standards Act (FLSA) action against Defendant TPUSA, Inc. in April 2018. After over a
year of litigation, the parties attended mediation and entered into an agreement settling Plaintiffs’
FLSA claims (Settlement Agreement). Because the parties cannot settle FLSA claims without
court approval, the parties filed a Joint Motion for Certification and Approval of Collective Action
Settlement,1 asking the court to grant conditional class certification and approve the parties’
Settlement Agreement.
For the reasons explained below, the Motion is DENIED without
prejudice.2
1
Dkt. 44.
2
After the parties filed the Motion, Plaintiffs and Interested Parties Chantel Headspeth and Kaylee McBride filed a
Joint Motion for Decision on the Briefing or, In the Alternative, Motion for Telephonic Hearing (Motion for Decision),
asking the court to decide the Motion on the briefing or to hold oral argument telephonically. Dkt. 71 at 1–2. The
Motion for Decision is DENIED as moot by virtue of this Order.
1
BACKGROUND
Plaintiffs commenced this action in April 20183 and filed an Amended Complaint in July
2018.4 Plaintiffs asserted in their Amended Complaint two causes of action: (1) violation of the
FLSA and (2) violation of the Utah Payment of Wages Act.5 Plaintiffs allege they were all
previously TPUSA’s employees in Utah and that TPUSA required its employees to arrive fifteen
minutes early to work shifts and trainings but did not compensate them for that time.6 The
Amended Complaint included an image of a “mandatory training notice that instructed employees
to ‘arrive at least 15 minutes before [their] class is scheduled to begin.’”7
Plaintiffs allege they bring “this action individually and as collective and class actions on
behalf of [similarly situated employees].”8 Specifically, Plaintiffs propose a nationwide collective
action class consisting of “[a]ll persons who are, or have been, employed by TPUSA as nonexempt employees[,] . . . who . . . failed to receive at least minimum wage for all hours worked
and/or overtime compensation for hours worked in excess of 40 hours in a single work week.”9
Before filing its Answer denying Plaintiffs’ allegations, TPUSA successfully moved to
dismiss Plaintiffs’ Utah Payment of Wages Act claim.10 Thus, only Plaintiffs’ FLSA claims
remain.
3
Dkt. 2 (Complaint).
4
Dkt. 21 (Amended Complaint).
5
Id. at 10–13.
6
Id. at 2–6.
7
Id. ¶ 22 (alteration in original).
8
Id. ¶ 28.
9
Id. ¶ 28(a).
See Dkt. 34. The court dismissed Plaintiffs’ Utah Payment of Wages Act claim without prejudice, and Plaintiffs
have not repleaded that claim.
10
2
After the court dismissed Plaintiffs’ Utah Payment of Wages Act claim, the parties engaged
in settlement discussions. 11 Those discussions led to an April 2019 mediation in Los Angeles,
California.12 Although the parties agreed to settle this case at mediation, they continued to
negotiate essential terms of the settlement for months after the mediation.13 The parties ultimately
entered into the Settlement Agreement and now move the court to conditionally certify Plaintiffs’
collective action class and approve the Settlement Agreement.14
LEGAL STANDARDS
I.
Collective Action Certification
“The FLSA ensures certain employers pay their employees the minimum wage and
overtime compensation if earned.”15 To enforce its provisions, the FLSA allows employees to sue
their employer as individuals or as a group, provided the group consists of “similarly situated”
employees.16 Although the FLSA does not define the term “similarly situated,”17 Supreme Court
precedent requires courts to “determine who is similarly situated in a ‘manner that is orderly,
sensible, and not otherwise contrary to statutory commands or the provisions of the Federal Rules
of Civil Procedure.’”18
The Tenth Circuit recognizes three distinct approaches for determining who is similarly
situated under § 216(b) of the FLSA: (1) the ad hoc approach, (2) the Rule 23 approach, and (3)
11
Dkt. 44 at 3.
12
Id.; Dkt 44-6 (Stojkovic Decl.) ¶ 10.
13
Dkt. 44 at 3.
14
See Dkt. 44; see also Dkt. 44-1 (Settlement Agreement).
15
In re Chipotle Mexican Grill, Inc., No. 17-1028, 2017 WL 4054144, at *1 (10th Cir. 2017) (unpublished) (citing 29
U.S.C. §§ 206–07).
16
See 29 U.S.C. § 216(b).
17
Chipotle, 2017 WL 4054144, at *1 (citing Thiessen v. Gen. Elec. Capital Corp., 267 F.3d 1095, 1102 (10th Cir.
2001)).
18
Id. (quoting Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 170 (1989)).
3
the spurious approach. The court has noted the ad hoc approach is “[a]rguably . . . the best of the
three approaches outlined because it is not tied to the Rule 23 standards.”19 This court therefore
adopts the ad hoc approach here.
Under the ad hoc approach, the court “determines, on an ad hoc case-by-case basis,
whether plaintiffs are ‘similarly situated.’”20 The court does this at two stages of the litigation.21
First, the court “makes an initial ‘notice stage’ determination of whether plaintiffs are ‘similarly
situated.’”22 For the court to grant this initial certification, a plaintiff must make “substantial
allegations that the putative class members were together the victims of a single decision, policy,
or plan”—nothing more is required.23 This is a lenient standard “that typically results in class
certification.”24
Second, “[a]t the conclusion of discovery (often prompted by a motion to decertify), the
court then makes a second determination, utilizing a stricter standard of ‘similarly situated.’”25 At
this final certification stage, the court relies on three factors: “(1) disparate factual and employment
settings of the individual plaintiffs; (2) the various defenses available to defendant which appear
to be individual to each plaintiff; [and] (3) fairness and procedural considerations.”26 Because
19
Thiessen, 267 F.3d at 1105.
20
Id. at 1102 (citation omitted).
21
Id. at 1102–03.
22
Id. at 1102 (citation omitted).
23
Id. (citation omitted).
24
McCaffrey v. Mortg. Sources, Corp., No. 08-2660-KHV, 2011 WL 32436, at *2 (D. Kan. Jan. 5, 2011) (citation
omitted).
25
Thiessen, 267 F.3d at 1102–03 (citation omitted).
26
Id. at 1103 (citation omitted); see Gassel v. American Pizza Partners, L.P., No. 14-cv-00291-PAB-NYW, 2015 WL
5244917, at * 2 n.3 (D. Colo. Sept. 8, 2015) (“Thiessen lists a fourth factor, i.e., whether plaintiffs made the filings
required by the ADEA before instituting suit. . . . That factor does not apply in FLSA cases.”) (citations omitted).
4
final certification occurs after discovery, “the [c]ourt can make its . . . decision with the benefit of
more information about the parties and the claims.”27
II.
FLSA Settlement
“Congress enacted the FLSA in 1938 with the goal of protecting all covered workers from
substandard wages and oppressive working hours.”28 Indeed, the FLSA’s “prime purpose . . . [is]
to aid the unprotected, unorganized and lowest paid of the nation’s working population.”29 To that
end, “Congress made the FLSA’s provisions mandatory . . . [and its] provisions are not subject to
negotiation or bargaining between employers and employees.”30 Thus, “[w]hen employees file
suit against their employer to recover back wages under the FLSA, the parties must present any
proposed settlement to the district court for” its approval.31
“The primary focus of the [c]ourt’s inquiry in determining whether to approve the
settlement of a[n] FLSA collective action is not, as it would be for a Rule 23 class action, on due
process concerns, . . . but rather on ensuring that an employer does not take advantage of its
employees in settling their claim for wages.”32 Accordingly, before the court can approve an FLSA
settlement, the court “must first determine whether the settlement resolves a bona fide dispute—
one that involves ‘factual issues rather than legal issues such as the statute’s coverage and
Barbosa v. Nat’l Beef Packing Co, LLC, No. 12-2311-KHV, 2014 WL 5099423 (D. Kan. Oct. 10, 2014) (citing
Hipp v. Liberty Nat’l Life Ins. Co., 252 F.3d 1208, 1218 (11th Cir. 2001)).
27
28
Christopher v. SmithKline Beecham Corp., 567 U.S. 142, 147 (2012) (quotation marks, brackets, and citation
omitted).
29
Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 707 n.18 (1945) (citations omitted).
30
Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350, 1352 (11th Cir. 1982) (citation omitted).
McCaffrey, 2011 WL 32436, at *2 (citation omitted); see Keel v. O’Reilly Auto Enters., LLC, No. 2:17-CV-667,
2018 WL 10509413, *2 (D. Utah May 31, 2018) (“The Tenth Circuit has not addressed whether parties can settle
FLSA actions claiming unpaid wages without court approval, but district courts within this district and within the
Tenth Circuit have followed the approach endorsed by a majority of courts and assumed that judicial approval is
necessary.”) (citations omitted).
31
32
Collins v. Sanderson Farms, Inc., 568 F. Supp. 2d 714, 719 (E.D. La. 2008) (citations omitted).
5
applicability.’”33 If the court finds a bona fide dispute lacking, it cannot approve the Settlement
Agreement and its inquiry ends. However, if the court finds a bona fide dispute exists, it must
then determine whether the proposed settlement is “fair and reasonable to all parties concerned”
and whether the proposed settlement “contain[s] a reasonable award of attorneys’ fees.”34
ANALYSIS
Applying the standards described above, the court concludes (1) the proposed collective
action should be certified, (2) this litigation involves a bona fide dispute, but (3) the Settlement
Agreement is not fair and reasonable. Because the court concludes the Settlement Agreement is
not fair and reasonable, it must deny the Motion.
I.
Plaintiffs’ Collective Action May Be Conditionally Certified
As explained above, the court follows the two-step ad hoc approach for determining
whether a collective action consists of “similarly situated” employees. The first step is commonly
referred to as conditional certification, and the second step is referred to as final certification. The
parties jointly move the court for conditional certification but do not move for final certification.35
Accordingly, the court must decide (1) whether it can approve the Settlement Agreement without
granting final certification and, if it can, (2) whether it should grant the parties’ request for
conditional certification. The court affirmatively answers both questions.
First, the court concludes that final certification is not a prerequisite to approving the
Settlement Agreement. The Tenth Circuit has not spoken on this question, and other courts are
33
Keel, 2018 WL 10509413, at * 2 (quoting Kraus v. PA Fit II, LLC, 155 F. Supp. 3d 516, 530 (E.D. Pa. 2016)).
34
Id. (citations omitted).
35
Dkt. 44 at 11–12.
6
split on the issue.36 But the court adopts the position that final certification is not required because
certification under the FLSA is “only the district court’s exercise of [its] discretionary power . . .
to facilitate the sending of notice to potential class members” and “is neither necessary nor
sufficient for the existence of a representative action under FLSA.”37 Indeed, the FLSA does not
require certification.38 Instead, it “requires only that the plaintiffs affirmatively provide consent
(opt in) . . . and that they be ‘similarly situated.’”39 Thus, plaintiffs can opt into a collective action
without conditional certification,40 and final certification is nothing more than a mechanism to
decertify the class by demonstrating the plaintiffs are not similarly situated as required by §
216(b).41 Accordingly, if a court uses the ad hoc approach, conditional certification satisfies the
36
See Mygrant v. Gulf Coast Rest. Grp., Inc., No. 18-0264-WS-M, 2019 WL 4620367, at *6 (S.D. Ala. Sept. 23,
2019) (concluding that final certification is unnecessary to settle an FLSA claim); see also Tompkins v. Farmers Ins.
Exch., No. 5:14-cv-3737, 2017 WL 4284114, at *8 n.2 (E.D. Pa. Sept. 27, 2017) (recognizing that final FLSA
certification is unnecessary for approving an FLSA settlement); Gassel, 2015 WL 5244917, at * 2 (collecting cases
that “generally make a final certification ruling before approving a collective action settlement); see also In re Wells
Fargo Wage & Hour Employment Practices Litig. (No. III), 18 F. Supp 3d 844, 853 (S.D. Tex. 2014) (“[C]ourts in
the Fifth Circuit have never imposed such a requirement and the court is not persuaded that it is necessary or
appropriate.”).
37
Myers v. Hertz Corp., 624 F.3d 537, 555 n.10 (2nd Cir. 2010) (quotation marks and citation omitted); see also
Genesis Healthcare Corp. v. Symczyk, 569 U.S. 66, 75 (2013) (“The sole consequence of conditional certification is
the sending of court-approved written notice to employees, . . . who in turn become parties to a collective action only
by filing written consents with the court.”) (citations omitted).
38
In its entirety, 29 U.S.C. § 216(b)’s collective action procedure reads:
An action to recover the liability prescribed in the preceding sentences may be maintained against
any employer (including a public agency) in any Federal or State court of competent jurisdiction by
any one or more employees for and in behalf of himself or themselves and other employees similarly
situated. No employee shall be a party plaintiff to any such action unless he gives his consent in
writing to become such a party and such consent is filed in the court in which such action is brought.
39
Smith v. Metro Security, Inc., No. 18-953, 2019 WL 6701311, at *7 (E.D. La. Dec. 9, 2019) (citing 29 U.S.C. §
216(b)).
See Myers, 624 F.3d at 555 n.10 (“Thus, certification is neither necessary nor sufficient for the existence of a
representative action under FLSA, but may be a useful case management tool for district courts to employ in
appropriate cases.”) (quotation marks and citation omitted).
40
See In re Wells Fargo, 18 F. Supp. 3d at 853 (“While there is a second stage in FLSA collective action cases during
which the court may decertify the class if the plaintiffs are not similarly situated in light of information gathered during
post-certification discovery, there was no need to reach the decertification stage here since the parties settled the
case.”).
41
7
FLSA’s “similarly situated” requirement and final certification is unnecessary in the settlement
context.42
Second, Plaintiffs have provided the court with sufficient information to grant conditional
certification. All that is required for the court to grant conditional certification is for there to exist
“substantial allegations that the putative class members were together the victims of a single
decision, policy, or plan.”43 The parties allege the putative class is comprised of “approximately
48,749 hourly non-exempt TPUSA employees that may have received the Training Memorandum
that requested employees arrive 15 minutes early for new hire training.”44 Further, Plaintiffs allege
TPUSA did not compensate its employees for these fifteen minutes.45 This is sufficient for the
court to conclude that the putative class members’ FLSA rights were violated under the same
policy and thus are similarly situated.
II.
This Litigation Involves A Bona Fide Dispute
The bona fide dispute requirement is designed to prevent parties from “negotiating around
the clear FLSA requirements of compensation.”46 Accordingly, “[i]f no question exists that the
plaintiffs are entitled under the statute to the compensation they seek (and therefore to liquidated
damages, as well), then any settlement of such claims would allow the employer to negotiate
around the statute’s mandatory requirements.”47
Indeed, “implementation of the FLSA is
frustrated if an employer can extract a disproportionate discount on FLSA wages in exchange for
See Smith, 2019 WL 6701311, at *7 (“If a court, such as this one, does use the two-step process, the conditional
certification is certification, and a decertification decision would be a revision of the original order.”) (quotation marks,
brackets, and citations omitted).
42
43
Thiessen, 267 F.3d at 1102 (citation omitted).
44
Dkt. 44 at 11.
45
Dkt. 21 (Amended Complaint) ¶¶ 22–23.
46
Collins, 568 F. Supp. 2d at 719 (citations omitted).
47
Id.
8
an attenuated defense to payment.”48 Thus, for a bona fide dispute to exist, there must be some
doubt concerning whether Plaintiffs may succeed on their FLSA claims.49
The parties bear the burden of demonstrating that a bona fide dispute exists, and they can
satisfy that burden by providing the court with sufficient information of the bona fide dispute’s
existence.50 Such information may include:
(1) a description of the nature of the dispute; (2) a description of the employer’s
business and the type of work performed by the employee; (3) the employer’s
reasons for disputing the employee’s right to a minimum wage or overtime; (4) the
employee’s justification for the disputed wages; and (5) if the parties dispute the
computation of wages owed, each party’s estimate of the number of hours worked
and the applicable wage.51
Here, the parties have provided sufficient information for the court to conclude that a bona
fide dispute exists. First, the nature of the dispute is straightforward: Plaintiffs allege TPUSA
required them to arrive fifteen minutes early to shifts and trainings but failed to compensate them
for that time under the FLSA’s wage provisions.52
Second, TPUSA’s primary business is
providing its clients with telephone-based customer service, and TPUSA employed Plaintiffs and
the putative class members as Customer Service Representatives whose job was to provide
telephonic customer service.53 Third, Plaintiffs contend they are entitled to damages ranging from
$1,767,151.25 to $4,748,152.60, depending on whether their damages are calculated at minimum
48
Dees v. Hydradry, Inc., 706 F. Supp. 2d 1227, 1242 (M.D. Fla. April 19, 2010).
49
See Collins, 568 F. Supp. 2d at 719–20.
50
See McCaffrey, 2011 WL 32436, at *4; see also Felix v. Thai Basil at Thornton, Inc., No. 14-cv-02567-MSK-CBS,
2015 WL 2265177, at *2 (D. Colo. May 6, 2015) (citation omitted).
51
Felix, 2015 WL 2265177, at *2 (citation omitted).
52
Dkt. 21 (Amended Complaint) ¶¶ 16–26.
53
Id. ¶¶ 4–7.
9
wage or overtime rates.54 TPUSA, however, contends it owes Plaintiffs nothing under (1) the
Klinghoffer rule or (2) the de minimis doctrine.55
The Klinghoffer rule refers to the holding in United States v. Klinghoffer Bros. Realty
Corp.56 There, the Second Circuit held that an employer complies with the FLSA’s minimum
wage requirement “so long as the total weekly wage paid by an employer meets the minimum
weekly requirements of the statutes, such minimum weekly requirement being equal to the number
of hours actually worked that week multiplied by the minimum hourly statutory requirement.”57
The de minimis rule dictates that “employees cannot recover for otherwise compensable
time if it is de minimis,”58 i.e., time that is “insubstantial and insignificant.”59 There is no specific
amount of time that qualifies as de minimis.60 Instead, this rule relies on the application of
“common sense . . . to the facts of each case”61 and the weighing of four factors: (1) “the amount
of daily time spent on the additional work,” (2) “the practical administrative difficulty of recording
the additional time,” (3) “the size of the claim in the aggregate,” and (4) “whether the claimants
performed the work on a regular basis.”62
54
Dkt. 44 at 13. The court notes that Plaintiffs did not address what their damages would be if they accounted for the
FLSA’s liquidated damages provision. See 29 U.S.C. § 216(b) (explaining that damages for violating the FLSA will
include the amounts of unpaid wages and “an additional equal amount as liquidated damages.”). If they had, their
damages would range from $3,534,302.50 to $9,496,305.20.
55
Dkt. 44 at 13–14.
56
285 F.2d 487 (2nd Cir. 1960).
57
Id. at 490.
58
Lindow v. United States, 738 F.2d 1057, 1062 (9th Cir. 1984) (citation omitted).
59
Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 693 (1946).
60
Lindow, 738 F.2d at 1062.
61
Id.
62
Reich v. Monfort, Inc., 144 F.3d 1329, 1333–34 (10th Cir. 1998) (citations omitted).
10
TPUSA’s reliance on these defenses creates a bona fide dispute.63 First, TPUSA alleges it
paid its employees an average of $12.99 per hour and therefore the total pay received by employees
during the workweek divided by the hours actually worked exceeded the minimum wage.64
Assuming these allegations are true and the Tenth Circuit adopts the Klinghoffer rule, Plaintiffs’
claim that TPUSA violated the FLSA’s minimum wage provision could fail.65
Similarly,
application of the de minimis doctrine calls into question the likelihood of success on Plaintiffs’
claim because it is unclear whether fifteen minutes aggregated over a four-week period qualifies
as de minimis.66 The court concludes a bona fide dispute exists.
III.
The Settlement Agreement Is Not Fair and Reasonable
“To be fair and reasonable, an FLSA settlement must provide adequate compensation to
the employee and must not frustrate the FLSA policy rationales.”67 The court has carefully
reviewed the Settlement Agreement and concludes it contains provisions that are inherently unfair,
unreasonable, and contradictory to the FLSA’s underlying policies.68 Below, the court addresses
63
Dkt. 35 (Answer) at 10–11.
64
Dkt. 44 at 14.
65
The parties did not cite a Tenth Circuit case applying the Klinghoffer rule, and the court has not found a Tenth
Circuit case doing so. Nevertheless, it appears likely the Tenth Circuit would follow the Klinghoffer rule. See
Campbell v. C.R. England, Inc., No. 2:13-cv-00262, 2015 WL 5773709, at *2 (D. Utah Sept. 30, 2015) (“When
calculating damages for minimum wages under the FLSA, most courts follow the so-called Klinghoffer rule, meaning
that an employer does not violate the federal minimum wage unless, when wages are averaged over an entire
workweek, the average wage is less than the federal minimum.”) (citations omitted).
Compare Lindow, 738 F.2d at 1064 (affirming the application of the de minimis doctrine to employees’ claim, even
though the employees were required to come in fifteen minutes early, “because of the administrative difficulty of
recording the time and the irregularity of the additional pre-shift work.”), with Reich, 144 F.3d at 1333–34 (affirming
the rejection of the de minimis doctrine to employee’s claim, even for a time period of approximately eleven and half
minutes each work day over two to three years, because the factors favored the employees.).
66
67
McMillian v. BP Service, LLC, No. 19-2665-DDC-TJJ, 2020 WL 969870, at *2 (D. Kan. Feb. 28, 2020) (citation
omitted).
68
See Johnson v. Citrus Cty. Assoc. for Retarded Citizens, Inc., No. 5:17-cv-216-Oc-32PRL, 2017 WL 7311891, at
*1–2 (M.D. Fla. July 12, 2017) (refusing to approve a settlement agreement with “inappropriate” provisions); see also
Barbosa, 2014 WL 5099423, at *7–8 (same).
11
those provisions and other issues it has identified with the Settlement Agreement to help guide the
parties should they reapply for approval of an amended settlement agreement.
A. A Fairness Hearing Would Be Premature
Courts typically hold fairness hearings to determine whether an FLSA settlement is fair
and reasonable “unless the parties notify the court that the opt-in plaintiffs had notice of the
settlement and an opportunity to object.”69 The court will not schedule a fairness hearing because
it will not approve the Settlement Agreement unless or until the parties provide additional
information to the court and remove certain provisions as explained below.
B. The Opt-In Procedure Is Not Consistent With the FLSA
Under the FLSA, “similarly situated” employees may opt into the action by filing with the
court their written consent “to become such a party.”70 The Settlement Agreement, however, does
not follow this opt-in procedure and therefore cannot be approved. Specifically, the Settlement
Agreement proposes sending checks to putative class members who will then consent to joining
this action by endorsing the check.71
Although this procedure satisfies the first § 216(b)
requirement that opt-in plaintiffs give written consent to joining the action, it fails to satisfy or
address the second requirement: that the written consents be filed with the court.72 If the parties
wish to reapply for approval of an amended settlement agreement, the parties may satisfy the §
216(b) filing requirement by certifying to the court a list of names of the people who cash their
checks or otherwise proposing a method that satisfies the statutory requirements.
69
Stubrud v. Daland Corp., No. 14-2252-JWL, 2015 WL 5093250, at *1 (D. Kan. Aug. 28, 2015) (citations omitted).
70
29 U.S.C. § 216(b).
71
Dkt. 44-1 (Settlement Agreement) ¶ 10(C).
72
See 29 U.S.C. § 216(b).
12
Additionally, unlike other collective actions that settle after the case has been conditionally
certified and opt-in plaintiffs have joined the action, this case has not yet been conditionally
certified, and no opt-in plaintiffs have joined. The Settlement Agreement contemplates that
putative class members opt into the action and join the settlement at the same time without an
opportunity to object to the Settlement Agreement.73 The parties explain that “[c]ombining the
notice to opt in with the settlement check will reduce the administration cost by 50% and thereby
preserve the settlement funds to benefit the class.”74 Although an important consideration, the
court requests that the parties provide additional analysis to justify their proposed procedure if they
seek approval of an amended settlement agreement. Specifically, the parties should provide
additional reasoning—supported by case law—explaining why the court should agree to the
procedure rather than follow courts that have refused.75
C. The Confidentiality Provision is Impermissible
“There is broad consensus that FLSA settlement agreements should not be kept
confidential”76 because “compelled silence unreasonably frustrates implementation of the
‘private–public’ rights granted by the FLSA and thwarts Congress’s intent to ensure widespread
compliance with the statute.”77
73
Id. ¶ 10.
74
Dkt. 44 at 9.
75
E.g., Christeson v. Amazon.com.ksdc, LLC, No. 18-2043-KHV, 2019 WL 354956, at *3–5 (D. Kan. Jan. 29, 2019)
(“When putative class members have not yet received notice of the lawsuit and an opportunity to opt in, the Court
cannot sustain a motion for final settlement approval. . . . Further, the Court’s ability to assess the appropriateness of
final certification, fairness of the settlement terms and reasonableness of the agreed fee award is undermined when
plaintiff has not provided putative class members notice and an opt-in opportunity before seeking final settlement
approval.”) (citations omitted).; Mygrant, 2019 WL 4620367, at *1–2 (allowing the parties to obtain “preliminary
approval” of a settlement agreement during the pre-notice stage of an FLSA case).
76
Stubrud, 2015 WL 5093250, at *1.
77
Dees, 706 F. Supp. 2d at 1242.
13
The Settlement Agreement includes a confidentiality provision, but the parties do not
address whether it is fair and reasonable.78 Specifically, that provision reads:
Non-disclosure and Non-publication. Plaintiffs and Class Counsel agree not to
disclose or publicize the Settlement Agreement contemplated herein, the fact of the
Settlement Agreement, its terms or contents, or the negotiations underlying the
Settlement Agreement, in any manner or form, directly or indirectly, to any person
or entity, except to Settlement Class members, and as shall be contractually or
legally required to effectuate the terms of the Settlement Agreement as set forth
herein, including, but not limited to, providing a copy of the Settlement Agreement
to the Court for approval.79
The court will not approve a settlement agreement with this provision because it
“contravenes the legislative purpose of the FLSA and undermines the Department of Labor’s
regulatory effort to notify employees of their FLSA rights.”80 Indeed, the court will not approve
a settlement agreement with a provision that prohibits Plaintiffs or their counsel from discussing
this case with TPUSA’s employees.81 Nor will the court enforce a provision that prohibits
Plaintiffs and their counsel from discussing the Settlement Agreement because it is a document
the parties have made available to the public by filing it with the court.82
Further, this
confidentiality provision is especially troubling given the allegation that TPUSA “was sued for
nearly the same wage violations in 2008.”83 Accordingly, the court will not approve the Settlement
Agreement with this or a substantially similar provision.
78
See Dkt. 44 at 14–17.
79
Dkt. 44-1 (Settlement Agreement) ¶ 18.
80
Dees 706 F. Supp. 2d at 1242.
See Stubrud, 2015 WL 5093250, at *1 (“Because the parties’ agreement contains a provision that would penalize
class members from disclosing the terms except in narrow circumstances, the court will not approve an agreement
containing this provision.”).
81
See Barbosa, 2014 WL 5099423, at *8 (“This confidentiality clause cannot be enforced. The settlement agreement
is a public document, and its terms are in the public domain.”).
82
83
Dkt. 21 (Amended Complaint) at 11 ¶ 6.
14
D. The Release Lacks Consideration
In the FLSA context, “general releases (the release is not limited to claims arising under
the FLSA) . . . are disfavored [because] ‘a pervasive release in an FLSA settlement confers an
uncompensated, unevaluated, and unfair benefit on the employer.’”84 Nevertheless, “courts will
approve broad releases accompanying FLSA settlements when the plaintiff is receiving full
compensation of his or her FLSA claim, as well as additional consideration for a general release.”85
In other words, the court will not approve an FLSA settlement containing a general release unless
it is supported by adequate additional consideration.
The Settlement Agreement contains two general releases—one for Settlement Class
members, including Plaintiffs, and another for Plaintiffs alone. Those provisions read:
Release.
Plaintiffs and every member of the Settlement Class will fully
release and discharge TPUSA, its past and present officers, directors, shareholders,
employees, agents, principals, heirs, representatives, accountants, attorneys,
auditors, consultants, and insurers, and TPUSA’s respective predecessors and
successors in interest, parents, subsidiaries, affiliates, related entities, and any of
their predecessors, successors, and assigns (all, collectively, the “Released
Parties”), as follows:
A.
Release by Settlement Class members (including Plaintiffs). Settlement
Class members shall release all claims, demands, rights, damages, liabilities, and
causes of action under federal, state, local, and/or common law that are or were
asserted in the Action, or that could have been asserted based on the factual
allegations in the Action, that arose during the Class Period, including, but not
limited to, with respect to the following claims: (a) failure to pay overtime wages;
(b) failure to pay minimum wages; and (c) all claims for liquidated damages, civil
penalties or attorney fees under the FLSA or state law (all, collectively the
“Released Claims”). This release will encompass all claims, demands, rights,
damages, liabilities, and causes of action under federal, state, local, and/or common
law up to and including the date on which the Settlement Agreement is approved
by the Court that are or were asserted in the Action, or that could have been asserted
84
Johnson, 2017 WL 7311891, at *2 (quoting Moreno v. Regions Bank, 729 F. Supp. 2d 1346, 1351–52 (M.D. Fla.
2010)); see Barbosa, 2014 WL 5099423, at * 8 (citing Gambrell v. Weber Carpet, Inc., No. 10-2131-KHV, 2012 WL
5306273, at *5 (D. Kan. Oct. 29, 2012)) (“It is inappropriate to require plaintiffs to sign overly-broad releases to
receive settlement proceeds in FLSA cases.”).
85
Johnson, 2017 WL 7311891, at *2 (emphasis added).
15
based on the factual allegations in the Action. Specifically excluded from the
Release Claims are any claims for unemployment insurance, workers’
compensation benefits, or any other claims that cannot be waived by law.
B.
Additional Release by Plaintiffs. Plaintiffs shall release, in addition to their
Released Claims, all claims, demands, rights, damages, and liabilities under federal,
state, local, and/or common laws, applicable orders, and regulations, whether
known or unknown, pending or contingent, they may have against the Released
Parties, to the maximum extent permitted by law (“Plaintiffs’ Released Claims”).
Specifically excluded from Plaintiffs’ Released Claims are any claims for
unemployment insurance, workers’ compensation benefits, or any other claims that
cannot be waived by law. . . .86
The Plaintiffs’ release in Section B is a general release that demands release of all claims
under “federal, state, local, and/or common laws, applicable orders, and regulations, whether
known or unknown, pending or contingent, they may have against the Released Parties.”87 At best,
the Settlement Class release language is imprecise. For example, it is unclear exactly what falls
within the scope of “all claims, demands, rights, damages, liabilities, and causes of action . . . that
could have been asserted based upon the factual allegations in the Action.”88 At worst, given the
nature of the relationship between TPUSA as employer and the Settlement Class members as
employees or former employees, this language may amount to a release that operates as a general
release in practice and effect. For reasons explained below, the court is concerned that this
ambiguity is designed to preserve arguments TPUSA may intend to present in other pending
actions to foreclose related but arguably different claims asserted by other former employees.
These concerns aside, it appears these releases are not supported by consideration. The
Settlement Agreement includes three forms of consideration that could arguably support the
86
Dkt. 44-1 (Settlement Agreement) ¶ 3.
87
Id. ¶ 3(B).
88
Id. ¶ 3(A).
16
general releases: (1) the Gross Settlement Amount,89 (2) the FLSA Compliance provision,90 and
(3) the Incentive Award provision.91 But each of these forms of consideration are insufficient to
justify the general releases.
To begin, the Gross Settlement Amount contemplated in the Settlement Agreement is not
fair and reasonable consideration for the general releases. This is because TPUSA is required to
pay the wages owed under the FLSA, and Plaintiffs may compromise their FLSA claims if the
compromise is fair and reasonable.92 But “concessions unrelated to the substance of the FLSA
claims have no place in FLSA settlements” and “should not be used as leverage to procure a
general release of all possible claims.”93 The compromises proposed in the Settlement Agreement
may fairly represent consideration for the reduced payment TPUSA has agreed to make—an
amount much smaller than it may have been liable for if the case proceeded to trial.94 But the
parties provide the court no basis on which to conclude the Gross Settlement Amount also provides
The parties agreed to settle Plaintiffs’ FLSA claims, in part, for a payment from TPUSA of $550,000.00 (the Gross
Settlement Amount). See Dkt. 44-1 (Settlement Agreement) ¶ 4.
89
90
Id. ¶ 6.
91
Id. ¶ 8.
92
See Moreno, 729 F. Supp. 2d at 1350–52.
93
Sanchez v. RM Wireless, Inc., No. 6:17-cv-1785-Orl-22TBS, 2018 WL 1866050, at *3 (M.D. Fla. Mar. 28, 2018)
(citations omitted).
94
It is clear Plaintiffs have come to a compromise on their FLSA claims by entering into the Settlement Agreement.
Assuming Plaintiffs are entitled to recover damages under only the FLSA’s minimum wage provision, TPUSA would
be liable for approximately $3,534,302.50, which would result in Plaintiffs and opt-in plaintiffs receiving about $72.50
each. See Dkt. 44 at 13 (alleging Plaintiffs’ damages under the FLSA’s minimum wage provision to be
$1,767,151.25); see also 29 U.S.C. § 216(b) (providing for liquidated damages equal to the unpaid wages). But the
parties agreed to settle this matter for the Gross Settlement Amount. See Dkt. 44-1 (Settlement Agreement) ¶ 4. From
the Gross Settlement Amount, the parties agreed to pay the administrative fees ($103,100), Plaintiffs’ incentive fees
($27,500), Plaintiffs’ attorney fees (an estimated $183,315), actual costs and expenses ($12,000), and the payroll taxes
due on the wage portion of the payments. Id. Plaintiffs and each opt-in plaintiff would therefore receive approximately
$4.60 under the Settlement Agreement. This may be a fair and reasonable compromise of the claim in light of
TPUSA’s defenses, but the court does not address that issue in this Order. See Moreno, 729 F. Supp. 2d at 1348
(“Problems, for example, in proving hours-worked or ‘non-exempt’ status—or the presence of some other lawful
defense to payment (if any)—may warrant a reasonable compromise, if the court approves.”).
17
consideration for the general releases Indeed, the parties do not characterize the Gross Settlement
Amount as consideration for the general releases.
Next, the FLSA Compliance provision in the Settlement Agreement is essentially
valueless. That provision reads:
FLSA Compliance. TPUSA agrees as a material term and condition of this
Settlement Agreement that it will continue to comply with the Fair Labor Standards
Act’s minimum wage and overtime requirements, and that it will compensate
employees for all hours worked during new-hire training sessions and regularly
scheduled work shifts. TPUSA certifies and represents that it has affirmatively
revoked and rescinded the Training Memorandum and does not require employees
to arrive early for new hire trainings.95
Plaintiffs are no longer TPUSA employees and therefore derive no benefit from this provision.96
Further, the court lacks information concerning the number of putative opt-in plaintiffs that
remain TPUSA employees, and therefore cannot determine what value, if any, putative opt-in
plaintiffs may gain from this provision.
More importantly, while “a non-cash, but still valuable, concession by an employee” may
qualify as consideration for a general release,97 TPUSA makes no concessions under this
provision. Instead, TPUSA agrees to “continue to comply with the Fair Labor Standards Act’s
minimum wage and overtime requirements,”98 which it is already required to do.99 And though
TPUSA represents it has revoked the Training Memorandum and does not require its employees
95
Dkt. 44-1 (Settlement Agreement) ¶ 6.
96
Dkt. 21 (Amended Complaint) ¶¶ 4–6.
97
Moreno, 729 F. Supp. 2d at 1348.
98
Dkt. 44-1 (Settlement Agreement) ¶ 6 (emphasis added).
See Moreno, 729 F. Supp. 2d at 1348–49 (“A gratuitous concession in exchange for the required payment is ‘unfair’
because (1) the FLSA obligates the employer without exception or condition to pay the full amount owed and (2) a
valuable, non-cash concession extended to the employer in exchange for otherwise ‘full compensation’ effectively
reduces the employer’s payment by an amount equal to the value of the concession (and accordingly reduces the
employer’s payment to less than ‘full compensation.’”).
99
18
to arrive early to trainings, it relies on similar representations to defend itself in this lawsuit.100
It is unclear what value, if any, TPUSA’s representations have in this settlement. Further,
TPUSA makes no promise to not later require its employees to arrive early for trainings under
the potential justification that the time is de minimis. Accordingly, this provision is not adequate
consideration for the general releases.
Lastly, the parties have classified Plaintiffs’ incentive awards, at least in part, as
consideration “for Plaintiffs’ general release of claims.”101 But the court is not convinced it is
reasonable to utilize incentive awards, which are designed to “induce individuals to become named
representatives,” as consideration for a general release. 102 Thus, if the court approves Plaintiffs’
incentive awards, it will be for “their service in prosecuting the action and for the risks they have
incurred,” not as consideration for Plaintiffs’ general release.103
In sum, the court cannot find adequate consideration for the general releases and therefore
cannot approve the Settlement Agreement on this independent ground.104 Absent additional
consideration, the release provisions must be appropriately limited.
E. The Release is Overbroad
“It is inappropriate to require plaintiffs to sign overly-broad releases to receive settlement
proceeds in FLSA cases.”105 The Settlement Agreement includes a release provision covering a
See Dkt. 44 at 13 (arguing that a bona fide dispute exists because TPUSA “represents that the Training
Memorandum was not an official company policy and was not authorized by management.”).
100
Dkt. 44-1 (Settlement Agreement) ¶ 8; see id. ¶ 4(C)(3) (explaining that the incentive awards are “in recognition
of Plaintiffs’ general release claims, contributions to the Action, and their service to the Settlement Class.”).
101
102
Robles v. Brake Masters Sys., Inc., No. CIV 10-0135 JB/WPL, 2011 WL 9717448, at *5 (D. N.M. Jan. 31, 2011)
(quoting UFCW Local 880—Retail Food Emp’rs. Joint Pension Fund v. Newmont Mining Corp., 352 F. App’x 232,
235–36 (10th Cir. 2009) (unpublished)).
103
Alvarez v. BI Inc., No. 16-2705, 2020 WL 1694294, at *12 (E.D. Pa. April 6, 2020).
104
See Johnson, 2017 WL 7311891, at *2 (citing cases that approved releases when there was consideration in addition
to the amount owed under the FLSA).
105
Barbosa, 2014 WL 5099423, at *8 (citation omitted).
19
number of parties associated with TPUSA, which the parties refer to as the Released Parties.106
“While [the court] recognize[s] that [TPUSA] want[s] finality, the exceptionally broad language
used here is not narrowly tailored to achieve this end and [will] not be approved.”107 Instead,
TPUSA may, for example, define Released Parties to include “any other person or entity associated
with TPUSA that was Settlement Class members’ ‘Employer’ as defined by the FLSA.”108
In addition, it is unclear how broadly the parties are interpreting the release and whether
the parties agree on its scope. As discussed above, the Settlement Class members’ release provides
for the release of federal and state law claims “that are or were asserted in the Action, or that could
have been asserted based on the factual allegations in the Action, that arose during the Class
Period.”109 TPUSA interprets this language to encompass any claims based on allegations that
TPUSA failed to compensate its employees for pre-training and pre-shift time,110 and Plaintiffs
have not provided their interpretation of this language. Because the Settlement Agreement is based
on a specific, limited amount of time—fifteen minutes each day for approximately four weeks—
and there has been no formal discovery except for initial disclosures, the court is concerned
putative class members may unintentionally waive claims that Plaintiffs never investigated or
litigated.111 If the parties wish to seek future approval of an amended settlement agreement, they
106
Dkt. 44-1 (Settlement Agreement) ¶ 3.
107
Sanchez, 2018 WL 1866050, at *3.
108
See id.
109
Dkt. 44-1 (Settlement Agreement) ¶ 3(A).
See Dkt. 60 at 1–3 (“Plaintiffs’ claims are expressly not limited to pre-training time, but encompass their entire
‘period of employment with TPUSA.’”); see also Dkt. 52-5 at 7–8 (arguing the release would have a dispositive effect
on TPUSA employees’ claims based on allegations that TPUSA required them to engage in pre-shift activities that
lasted between five and forty-five minutes each day during their employment).
110
Plaintiffs describes their contentions as, “Defendant did not compensate them for pre-shift work during a 4 week
new hire training session.” Dkt. 44-3 (Snow Decl.) ¶ 4. And Plaintiffs appear to limit the scope of the Settlement
Agreement as covering only the allegations concerning unpaid time during the new hire training period. See Dkt. 59
at 4 n.2 (explaining that the Settlement Agreement is limited to the allegation that TPUSA failed to pay its employees
for “arriving early during only the new hire training period.”).
111
20
are directed to provide additional information addressing the court’s concern with TPUSA’s broad
interpretation of the release. Notably, if the parties mutually intend the release to operate as
broadly as TPUSA suggests, then the court has grave concerns about the fairness and
reasonableness of the settlement.
F. The Proposed Notice Is Insufficient
This court has authority to “prescrib[e] the terms and conditions of communication from
the named plaintiffs to the potential members of the class on whose behalf the collective action
has been brought.”112 In exercising that authority, it is the court’s duty to ensure the notice
provides sufficient information to the putative class members so they may “make an informed
choice as to whether to participate in” the action.113 Generally,
[a] notice should include, at a minimum: the purpose of the notice, the nature of the
lawsuit, the proposed class composition, the legal effect of joining the lawsuit, the
fact that the court has not taken any position regarding the merits of the lawsuit,
how to join the lawsuit, the purely voluntary nature of the decision and the legal
effect of not joining the lawsuit, the prohibition against retaliation, and the relevant
contact information for inquiries.114
Exercising its authority under these standards, the court cannot approve the parties’ proposed
notice115 for the following reasons.
112
Hoffmann-La Roche, 493 U.S. at 169; see Zhongle Chen v. Kicho Corp., No. 18 CV 7413 (PMH) (LMS), 2020 WL
1900582, at *8 (S.D.N.Y. April 17, 2020) (“The content of the notice is left to the broad discretion of the district
court.”) (citation omitted); see also Self v. TPUSA, Inc., No. 2:08cv395, 2008 WL 4372928, at *2 (D. Utah Sept. 19,
2008) (“Because of the potential for abuse in class actions and FLSA collective actions, a district court has both the
duty and the broad authority to exercise control over a class action and to enter appropriate orders governing the
conduct of counsel and the parties.”) (quotation marks and citation omitted).
113
Rogers v. WEBstaurant Store, Inc., No. 4:18-cv-00074, 2018 WL 3058882, at *6 (quoting Billingsley v. Citi Trends,
Inc., 560 F. App’x. 914, 922 (11th Cir. 2014)).
114
Zhongle Chen, 2020 WL 1900582, at * 9 (quoting Hernandez v. City of New York, No. 16 Civ. 3445 (RA), 2017
WL 289816 (S.D.N.Y. June 29, 2017)).
115
See Dkt. 44-4 (Notice).
21
First, the section “How do I opt in or become a part of the Litigation and Settlement?”116
is deficient because it does not accurately explain the FLSA’s opt-in process. The recipients of
the notice are not required to opt into this action, and the notice must include language clearly
explaining that the recipient’s decision to participate in this action is purely voluntary.
Additionally, the notice must include language explaining that the opt-in plaintiffs will not join
the action unless their names are filed with the court and clarifying who is expected to fulfill this
requirement (e.g., Plaintiffs’ counsel or the opt-in plaintiff). Lastly, the notice must include a clear
statement explaining the legal effect of joining this action, i.e., that whoever opts into the action
will be bound by its outcome, including the terms of the Settlement Agreement.
Second, the section “What claims will I release if I cash the settlement check?”117 is
deficient because it does not define the scope of the release. Specifically, that section explains the
release covers “any and all claims under the [FLSA] . . . and state law claims that are or could be
based on or related to the same matters alleged in the Action.”118 But the notice does not explain
what matters have been alleged. Instead, the notice repeatedly refers to allegations that TPUSA
issued a notice requiring employees to arrive fifteen minutes early to new hire trainings and merely
states: “The Litigation alleges that TPUSA failed to pay Potential Settlement Class members for
all minimum and overtime wages.”119 This is insufficient because it does not explain what claims
putative class members would be releasing if they cash their check. Further, the notice does not
provide a fair explanation concerning the nature of the lawsuit. Accordingly, the notice must
include additional information concerning the nature of the action and Plaintiffs’ allegations so
116
Id. at 3.
117
Id.
118
Id. (emphasis added).
119
Id. at 1–2.
22
putative class members can make an informed decision about whether to join this action and what
claims they may waive if they do so.
Third, the section “What happens if I do not cash the check?”120 is deficient because it
does not clearly explain that putative class members who do not cash the check will not be bound
by the outcome of this action or the Settlement Agreement. The notice must include additional
language explaining the legal effect of not joining this action, including preservation of rights to
independently pursue claims.
Fourth, the section “How can I get additional information?”121 is deficient because it does
not inform putative class members of their right to seek legal advice from their own counsel.
Further, to avoid ambiguity, the parties should amend the last sentence in this section to provide
Plaintiffs’ counsel’s contact information instead of stating “the contact information listed
above.”122
And where the notice provides contact information for the parties’ attorneys,
“Attorneys for Plaintiffs/the Settlement Class” should be changed to “Class Counsel,” and
“Attorneys for Defendant” should be changed to “Attorneys for TPUSA.”123
Fifth, the notice fails to notify putative class members of their ability to receive a copy of
the Settlement Agreement from Plaintiffs’ counsel before joining this action. The court will not
approve a settlement unless the putative class members have the ability to receive and review the
settlement agreement from Plaintiffs’ counsel and are informed of their ability to do so.124
120
Id. at 3.
121
Id.
122
Id.
123
Id. at 2.
124
Alternatively, the notice can provide a website address where putative class members can find and review the
Settlement Agreement.
23
Sixth, the notice does not clearly state that the court has taken no position on the merits of
Plaintiffs’ allegations. Accordingly, the parties must add language to that effect.
Seventh, an FLSA lawsuit against TPUSA is currently pending in the United States District
Court for the District of Ohio (Ohio Action). Before the parties sought approval of their Settlement
Agreement, the Ohio Action’s plaintiffs sought conditional certification of their FLSA claims.125
Specifically, they sought permission to notify putative class members, which would consist only
of TPUSA employees in Ohio, of their ability to join that action.126 In response, TPUSA argued
the Ohio Action should be stayed and not be certified because the Settlement Agreement’s release
would “resolv[e] a substantial percentage of the proposed [Ohio class] members’ claims.”127 The
Ohio Court agreed with TPUSA and stayed its decision on the Ohio plaintiffs’ motion for
conditional certification pending resolution of this case. 128 Nevertheless, “Plaintiffs have offered
to amend the [notice] in this action to include a specific disclosure of the Ohio Action and to
provide the contact information of counsel in the Ohio Action so that potential class members can
make an informed decision.”129 Thus, because putative class members in Ohio have not received
notice of the Ohio Action, the notice in this case must include Plaintiffs’ proposed amendment.130
In sum, the court will not approve any notice unless the parties resolve each of the issues
described above.
125
Dkt. 52 at 5.
126
See Dkt. 52-2.
127
Dkt. 52-5 at 6.
128
Dkt. 69-1.
129
Dkt. 59 at 3–4. It does not appear that TPUSA has agreed to Plaintiffs’ proposed amendment.
130
The language for the proposed amendment can be found at Dkt. 59 at 4 n.2.
24
G. Incentive Awards
The Settlement Agreement provides that Plaintiffs may request incentive payments from
the Gross Settlement Amount without TPUSA opposing that request.131 Specifically, the requested
incentive payments include $12,500 to Cazeau, $12,500 to Stojkovic, and $2,500 to Hughes
(formerly Anderson).132 At this time, however, the court cannot approve the requested payments
because it lacks sufficient information justifying the requested awards.
The court “must examine any service award payments to determine whether they are fair
and reasonable.”133 One court has found incentive awards “are justified only when a class
representative is not forthcoming, when a class representative undertakes risk, or when the class
representative’s efforts exceed the effort of a typical class representative or individual plaintiff.”134
Another court looked to the amount of time named plaintiffs expended on the case to justify an
award.135
Plaintiffs here contend they are entitled to the requested incentive awards because of their
efforts throughout this litigation.136
To support their requested award, Plaintiffs submit
declarations from Plaintiffs’ counsel,137 Cazeau,138 and Stojkovic.139 But the declarations do not
provide sufficient information for the court to determine if the requested incentive awards are
131
Dkt. 44-1 (Settlement Agreement) ¶ 8.
132
Id.
133
Lopez v. El Mirador, Inc., No. CV 16-01257 RB-KBM, 2018 WL 582577, at *6 (D. N.M. Jan. 26, 2018) (citations
omitted).
134
Id. at *7 (citing Robles, 2011 WL 9717448, at *5) (quotation marks omitted).
135
See Barbosa v. Nat’l Beef Packing Co., LLC, No. 12-2311-KHV, 2015 WL 4920292, at *6 (D. Kan Aug. 18, 2015).
136
Dkt. 44 at 23–24.
137
Dkt. 44-3 (Snow Decl.).
138
Dkt. 44-5 (Cazeau Decl.).
139
Dkt. 44-6 (Stojkovic Decl.).
25
justified. For example, the declarations do not provide any indication concerning the number of
hours Plaintiffs spent assisting in the litigation.140 There is also no explanation why Cazeau and
Stojkovic should receive the same awards when Stojkovic traveled to California for mediation, but
Cazeau did not.141 And the details provided concerning Hughes’ involvement with the case do not
appear to justify his requested award. Accordingly, the court cannot approve the requested
incentive awards at this time.
If Plaintiffs seek incentive awards in the future, they should provide details concerning
their involvement with the case and address the following factors:
[1] the actions the class representative has taken to protect the interests of the class,
[2] the degree to which the class has benefitted from those actions, [3] the amount
of time and effort the class representative has expended in pursuing the litigation,
and [4] the risks the class representative faced in pursuing the action.142
The court is disinclined to grant incentive awards in a manner that would reduce the Gross
Settlement Amount and thus the amount available to putative class members unless there is some
showing that Plaintiffs’ efforts have been “greater than the efforts a class representative would
have incurred if his or her action were an individual action and not a class action.”143
H. Attorney Fees
“The final factor a court must inspect in scrutinizing a proposed settlement is whether the
attorney’s fees are reasonable.”144 Because the court will not approve the Settlement Agreement
for the reasons addressed above, “an analysis of the attorney’s fees and costs is premature.”145
140
See Dkt. 44-3 (Snow Decl.) ¶ 32; see also Dkt. 44-5 (Cazeau Decl.) ¶ 8; Dkt. 44-6 (Stojkovic Decl.) ¶¶ 9–10.
141
See Dkt. 44–5 (Cazeau Decl.) ¶ 8; see also Dkt. 44-6 (Stojkovic Decl.) ¶¶ 10.
142
Robles, 2011 WL 9717448, at *12 (citing Cook v. Niedert, 142 F.3d 1004, 1016 (7th Cir. 1998)).
143
Id. at *13.
144
Lopez, 2018 WL 582577, at *8 (citation omitted).
145
Id. (citation omitted).
26
Accordingly, the court declines Plaintiffs’ uncontested request for attorney fees but will consider
the request if the parties reapply for approval of an amended settlement agreement.
CONCLUSION
For the foregoing reasons, the court DENIES the parties’ Joint Motion146 without prejudice.
The court DENIES Plaintiffs and Interested Parties’ Motion for Decision147 because it is rendered
moot by this decision.
SO ORDERED this 2nd day of July 2020.
BY THE COURT:
________________________________
ROBERT J. SHELBY
United States Chief District Judge
146
Dkt. 44.
147
Dkt. 71.
27
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