Cazeau et al v. TPUSA
Filing
85
MEMORANDUM DECISION AND ORDER granting 83 Motion for Certification and Approval of Collective Action Settlement. Signed by Judge Robert J. Shelby on 4/29/21. (dla)
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 GRANTING
SECOND 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 Hughes (formerly Anderson)
initiated this Fair Labor Standards Act (FLSA) action against Defendant TPUSA, Inc., alleging it
owes unpaid wages to certain current and former employees. After over a year of litigation, the
parties attended mediation and entered into an agreement settling Plaintiffs’ FLSA claims
(Settlement Agreement). The parties filed a joint motion (First Joint Motion) to grant
conditional class certification and approve the Settlement Agreement.1 The court denied the
First Joint Motion because it determined the Settlement Agreement was not fair and reasonable.2
In its Order Denying Joint Motion for Certification and Approval of Collective Action
Settlement (Prior Order),3 the court identified several changes necessary for the parties to cure.
1
Dkt. 44 (First Joint Motion).
2
See Dkt. 78 (Prior Order).
3
Id.
1
Now before the court is the parties’ Second Joint Motion for Certification and Approval
of Collective Action Settlement (Second Joint Motion).4 For the reasons explained below, the
Second Joint Motion is GRANTED. The court grants preliminary approval to the Amended and
Restated Settlement Agreement (Amended Settlement Agreement)5 as defined and proposed,
provided the parties implement the remaining necessary changes set forth in the Prior Order.
BACKGROUND
Plaintiffs Cazeau, Stojkovic, and Hughes allege they are all previous employees of
TPUSA in Utah.6 They allege that during their employment TPUSA required its employees to
arrive fifteen minutes early to work shifts and training classes but did not compensate them for
that time.7
In the operative Amended Complaint,8 Plaintiffs assert two causes of action: (1) violation
of the FLSA, and (2) violation of the Utah Payment of Wages Act.9 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.’”10
Plaintiffs bring “this action individually and as collective and class actions on behalf of
[similarly situated employees].”11 Specifically, Plaintiffs proposed a nationwide collective
action class consisting of “[a]ll persons who are, or have been, employed by TPUSA as non-
4
Dkt. 83 (Second Joint Motion).
5
Dkt. 83-1 (Amended Settlement Agreement).
6
Dkt. 21 (Amended Complaint) ¶¶ 4–6.
7
Id. at 2–6.
8
Dkt. 21 (Amended Complaint).
9
Id. at 10–13.
10
Id. ¶ 22 (alteration in original).
11
Id. ¶ 28.
2
exempt 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.”12
Before filing its Answer denying Plaintiffs’ allegations, TPUSA successfully moved to
dismiss Plaintiffs’ Utah Payment of Wages Act claim.13 Thus, the only claim remaining in this
action is Plaintiffs’ FLSA claim.
After the court dismissed Plaintiffs’ Utah Payment of Wages Act claim, the parties
engaged in settlement discussions.14 Those discussions led to an official day-long mediation
session in Los Angeles in April 2019.15 Although the parties agreed to settle this case at
mediation, they continued to negotiate essential terms of the settlement for months after the
mediation.16 Ultimately, the parties entered into the Settlement Agreement and moved the court
to conditionally certify Plaintiffs’ collective action class and approve the Settlement
Agreement.17
After reviewing the parties’ First Joint Motion, the court denied the Motion, finding the
proposed Settlement Agreement was not fair and reasonable.18 Specifically, the court identified
several provisions in the agreement and proposed notice to putative class members that were
“inherently unfair, unreasonable, and contradictory to the FLSA’s underlying policies.”19
However, the court also concluded the collective action warranted conditional approval and the
12
Id. ¶ 28(a).
See Dkt. 34. The court dismissed Plaintiffs’ Utah Payment of Wages Act claim without prejudice, and Plaintiffs
have not replead that claim.
13
14
Dkt. 44 (First Joint Motion) at 3.
15
Id.; Dkt 44-6 (Stojkovic Decl.) ¶ 10.
16
Dkt. 44 (First Joint Motion) at 3.
17
See Dkt. 44 (First Joint Motion); see also Dkt. 44-1 (Settlement Agreement).
18
See Dkt. 78 (Prior Order).
19
Id. at 11.
3
litigation involved a bona fide dispute—both requirements for the settlement to move forward.20
Following the court’s guidance, the parties’ amended the Settlement Agreement and filed the
Second Joint Motion.21
LEGAL STANDARDS
I.
FLSA Settlement
“Congress enacted the FLSA in 1938 with the goal of protecting all covered workers
from substandard wages and oppressive working hours.”22 Indeed, the FLSA’s “prime purpose .
. . [is] to aid the unprotected, unorganized and lowest paid of the nation’s working population.”23
To that end, “Congress made the FLSA’s provisions mandatory . . . [and its] provisions are not
subject to negotiation or bargaining between employers and employees.”24 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.25
“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.”26 Accordingly, before the court can approve an
20
Id. at 6–11.
21
Dkt. 83 (Second Joint Motion).
22
Christopher v. SmithKline Beecham Corp., 567 U.S. 142, 147 (2012) (quotation marks, brackets, and citation
omitted).
23
Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 707 n.18 (1945) (citations omitted).
24
Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350, 1352 (11th Cir. 1982) (citation omitted).
25
McCaffrey v. Mortg. Sources, Corp., No. 08-2660-KHV, 2011 WL 32436, at *2 (D. Kan. Jan. 5, 2011) (citation
omitted); see Keel v. O’Reilly Auto Enters., LLC, Case 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).
26
Collins v. Sanderson Farms, Inc., 568 F. Supp. 2d 714, 719 (E.D. La. 2008) (citations omitted).
4
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 applicability.’”27 If the court finds there is a bona fide dispute, it must then determine (1)
whether the proposed settlement is “fair and reasonable to all parties concerned” and (2) whether
the proposed settlement “contain[s] a reasonable award of attorneys’ fees.”28
ANALYSIS
The court’s Prior Order concluded: (1) the proposed collective action should be
conditionally certified, (2) this litigation involves a bona fide dispute, and (3) the Settlement
Agreement was not fair and reasonable.29 The analysis and reasoning of the court’s Prior Order
is incorporated by reference and will not restated here.
In the present Motion, the parties seek certification of the collective action for purposes
of settlement and approval of the Amended Settlement Agreement. They argue the Amended
Settlement Agreement implements the changes required by the Prior Order and is now fair and
reasonable.
Having reviewed the Amended Settlement Agreement, the court finds it includes many
revisions specifically suggested by the court. These revisions were already determined to be fair
and reasonable.30 Therefore, this Order addresses only the remaining provisions and factors not
previously evaluated by the court. These include the Gross Settlement Amount, certain
27
Keel, 2018 WL 10509413, at * 2 (quoting Kraus v. PA Fit II, LLC, 155 F. Supp. 3d 516, 530 (E.D. Pa. 2016)).
28
Id. (citations omitted).
29
Dkt. 78 (Prior Order) at 6.
Dkt. 78 (Prior Order) at 11–12. (“[T]he court addresses . . . [problematic] 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.”).
30
5
provisions of the Amended Settlement Agreement and proposed notice, incentive payments,
attorney’s fees and costs, and administrator’s costs. The court will address these issues in turn.
I.
The Amended Settlement Agreement Is 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.”31 The court has carefully
reviewed the Amended Settlement Agreement and finds it to be fair and reasonable.
The court turns first to the Gross Settlement Amount.
A. The Gross Settlement Amount is reasonable.
In determining whether a FLSA settlement is fair and reasonable, “courts regularly
examine the factors that apply to proposed class action settlements under Rule 23(e)”32 and
“contextual factors pertinent to the statutory purpose of the FLSA.”33 And “[w]here . . . the
settlement resulted from arm’s length negotiations between experienced counsel after significant
discovery had occurred, the [c]ourt may presume the settlement to be fair, adequate, and
reasonable.”34
Traditionally, the Tenth Circuit has employed four factors when considering the fairness
of a proposed settlement agreement under Rule 23(e):35 (1) whether the proposed settlement was
31
McMillian v. BP Service, LLC, Case No. 19-2665-DDC-TJJ, 2020 WL 969870, at *2 (D. Kan. Feb. 28, 2020)
(citation omitted).
32
Id.
33
Whittington v. Taco Bell of America, Inc., Civil Action No. 10-cv-01884-KMT-MEH, 2013 WL 6022972, at *4 (D.
Colo. Nov. 13, 2013) (citation omitted); see Gambrell v. Weber Carpet, Inc., Civil Action No. 10-2131-KHV, 2012
WL 5306273, at *4 (D. Kan. Oct. 29, 2012) (“In determining whether the proposed settlement is fair and equitable,
the factors which courts consider in approving a class action settlement[] under Rule 23(e) . . . are instructive, but not
determinative. The Court must also consider factors relevant to the history and policy of the FLSA.”) (citations
omitted).
34
Acevedo v. Southwest Airlines Co., Civil Action No. 1:16-cv-00024-MV-LF, 2019 WL 6712298, at *2 (D. N.M.
Dec. 10, 2019) (quotation marks and citations omitted).
35
Tennille v. Western Union Co., 785 F.3d 422, 434 (10th Cir. 2015) (citation omitted); see also Jones v. Nuclear
Pharmacy, Inc., 741 F.2d 322, 324 (10th Cir. 1984).
6
fairly and honestly negotiated, (2) whether serious questions of law and fact exist which place
the ultimate outcome of the litigation in doubt, (3) whether the value of an immediate recovery
outweighs the mere possibility of future relief after protracted and expensive litigation, and (4)
the judgment of the parties that the settlement is fair and reasonable.36 These factors “are
instructive, but not determinative.”37
In 2018, Rule 23(e) was amended to include its own four-factor test for fairness of a
proposed settlement agreement.38 The 2018 Amendments have led some to question whether the
Rule 23(e)(2) factors supersede the Tenth Circuit factors, but the Tenth Circuit has in at least one
recent unpublished opinion continued to apply its own factors.39
Finally, there are also nine FLSA contextual factors the court considers, “some of which
overlap with the [Tenth Circuit] factors listed above”40 and the factors the court considered to
determine a bona fide dispute exists.41
36
Id.; see also Whittington, 2013 WL 6022972, at *4 (citations omitted).
37
Gambrell, 2012 WL 5306273, at *4 (citation omitted).
38
The Rule 23(e)(2) factors are: (A) the class representatives and class counsel have adequately represented the
class; (B) the proposal was negotiated at arm’s length; (C) the relief provided for the class is adequate, taking into
account (i) the costs, risks, and delay of trial and appeal; (ii) the effectiveness of any proposed method of
distributing relief to the class, including the method of processing class-members claims; (iii) the terms of any
proposed award of attorney’s fees, including timing of payment; and (iv) any agreement required to be identified
under Rule 23(e)(3); and (D) the proposal treats class members equitable relative to each other. Fed. R. Civ. P.
23(e)(2).
39
Elna Sefcovic, LLC v. TEP Rocky Mountain, LLC, 807 F. App’x 752 (10th Cir. 2020) (unpublished).
40
Whittington, 2013 WL 6022972, at *4.
The nine FLSA contextual factors are: (1) defendants’ business, (2) the type of work performed by plaintiffs, (3)
the facts underlying plaintiffs’ reasons for justifying their claims, (4) defendants’ reasons for disputing plaintiffs’
claims, (5) the relative strength and weaknesses of plaintiffs’ claims, (6) the relative strength and weaknesses of
defendants’ defenses, (7) whether the parties dispute the computation of wages owed, (8) each party’s estimate of the
number of hours worked and the applicable wage, and (9) the maximum amount of recovery to which plaintiffs claim
they would be entitled if they successfully proved their claims. Id. (citation omitted).
41
7
Because “a lengthy list of factors can take on an independent life, potentially distracting
attention from the central concerns that inform the settlement-review process,”42 the court will
not address each set of factors individually. Moreover, there is significant overlap between the
Tenth Circuit factors, the Rule 23(e)(2) factors, and the FLSA contextual factors. For this
reason, the court conducts its analysis using the Tenth Circuit’s factors but finds the parties’
submissions satisfy both the Rule 23(e)(2) factors and the FLSA contextual factors. Justification
for this finding can be found in the court’s analysis of the Settlement Agreement in the Prior
Order and its analysis of the Amended Settlement Agreement throughout the remainder of this
Order.43
First, it appears the parties fairly and honestly negotiated the Settlement Agreement. In
April 2019, the parties attended a day-long mediation session in Los Angeles before mediator
Louis Marlin, an experienced mediator of FLSA wage claims.44 The parties agreed to settle this
case at mediation but continued to negotiate essential terms of the settlement for months
following the mediation.45 Ultimately, they entered into the Settlement Agreement,46 and now
the Amended Settlement Agreement.47 Accordingly, this factor weighs in favor of finding the
Amended Settlement Agreement is fair and reasonable.
Fed. R. Civ. P. 23(e)(2) advisory committee’s notes to the 2018 Amendments (“The sheer number of factors can
distract both the court and the parties from the central concerns that bear on review under Rule 23(e)(2).”).
42
For example, the court’s analysis of the incentive payments, the Gross Settlement Amount, the viable defenses
raised by TPUSA, the proposed notice and method of processing class members’ claims, and the reasonableness of
attorneys’ fees, among other things, relate directly to the factors found in Rule 23(e)(2)(C).
43
44
Dkt. 44 (First Joint Motion) at 3; Dkt. 44-6 (Stojkovic Decl.) ¶ 10.
45
Dkt. 44 (First Joint Motion) at 3.
46
See Dkt. 44-1 (Settlement Agreement).
47
See Dkt. 83-1 (Amended Settlement Agreement).
8
Second, as explained in the Prior Order, TPUSA has asserted defenses to Plaintiffs’ claim
that call into question the outcome of this litigation.48 Thus, this factor also favors finding the
Settlement Agreement is fair and reasonable.
Third, the value of an immediate recovery outweighs the possibility of a greater recovery
after protracted litigation. An employer who violates the FLSA’s wage provisions is liable for
the unpaid wages and “an additional equal amount as liquidated damages.”49 Assuming
Plaintiffs are only entitled to recover minimum wage, TPUSA would be liable for approximately
$3,534,302.50,50 which would result in Plaintiffs and opt-in plaintiffs each receiving about
$72.50.51 But the parties have agreed to settle this matter for $550,000 (Gross Settlement
Amount).52 From that Gross Settlement Amount, the parties have 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.53 Plaintiffs and each opt-in plaintiff would therefore receive
approximately $4.60.54 Thus, it is clear Plaintiffs have settled for “only a small portion of the
unpaid wages Plaintiffs originally claimed.”55
Settling for a small portion of the claimed unpaid wages without accounting for the
liquidated damages may in some cases be cause for concern. It is not a concern here because
48
See Dkt. 78 (Prior Order) at 9–11; see also Dkt. 44 (First Joint Motion) at 13–14.
49
29 U.S.C. § 216(b) (emphasis added).
50
See Dkt. 44 (First Joint Motion) at 13 (explaining that Plaintiffs alleged damages, if calculated at minimum wage,
would total $1,767,151.25).
51
$3,534,302.50 divided by the putative class members (48,749) equals $72.50.
52
Dkt. 44-1 (Settlement Agreement) ¶ 4.
53
Id.
54
$550,000 minus the administrative fees, attorney fees, costs, and incentive fees, and divided by the putative class
members equals $4.60.
55
Niles v. Denny’s Inc., Case No. 6:16-cv-999-Orl-40TBS, 2017 WL 1352232, at *2 (M.D. Fla. March 22, 2017).
9
“the presence of some . . . lawful defense to payment (if any) . . . warrant[s] a reasonable
compromise.”56 As discussed in the Prior Order, if TPUSA’s defenses are successful, Plaintiffs
could recover nothing. Thus, because TPUSA has defenses that call into question Plaintiffs’
ability to succeed on its claim, the overall settlement amount of $550,000.00 is justified. Further,
“as both sides were represented by counsel and the case settled with the assistance of a mediator,
[the court] accept[s] the [p]arties’ representation that, to the extent there was a compromise, the
amounts reached represent a fair and equitable one.”57
Fourth, the judgment of the parties also favors the court finding the Amended Settlement
Agreement is fair and reasonable because each parties’ counsel agrees that the Amended
Settlement Agreement is fair and reasonable.58
In sum, the court finds the factors weigh in favor of finding the Amended Settlement
Agreement is fair and reasonable, and specifically finds that the Gross Settlement Amount
represents a fair and reasonable compromise of Plaintiff’s FLSA claim.
The court will now address specific provisions of the Amended Settlement Agreement
and proposed notice.
B. The Amended Settlement Agreement and Notice Provisions are fair
and reasonable.
In the Prior Order, the court denied the parties’ First Joint Motion because the Settlement
Agreement and proposed notice contained provisions that were “inherently unfair, unreasonable,
56
Moreno v. Regions Bank, 729 F. Supp. 2d 1346, 1348 (M.D. Fla. 2010).
57
Niles, 2017 WL 1352232, at *2; see Dkt. 44 (First Joint Motion) at 14–17.
See Does1-2 v. Déjà Vu Servs., Inc., 925 F.3d 886, 899 (6th Cir. 2019) (“And both Déjà Vu and the Dancers agreed
that the counsel representing both parties had extensive experience, which supports the district court’s finding that
counsels’ positive outlook toward the fairness of the settlement weighed in favor of approving the Settlement
Agreement.”).
58
10
and contradictory to FLSA’s underlying policies.”59 The court identified several provisions and
issues needing correction if the parties sought approval in the future. The parties have in good
faith made significant substantive revisions to address these concerns, including the following
changes to the Settlement Agreement and proposed notice:
•
Modified the opt-in procedure to include filing the written consents of opt-in plaintiffs
with the court, bringing the procedure into full compliance with the requirements of 29
U.S.C. § 216(b);
•
Modified the opt-in procedure to provide both an opt-in and objection period during
which potential class members can review the Amended Settlement Agreement before
choosing to opt in or object;
•
Removed an impermissible confidentiality provision;
•
Limited the group of released parties appropriately;
•
Narrowed the scope of the release to apply only to FLSA claims related to the
requirement to arrive early to new training meetings;
•
Removed a general release that was ambiguous and unsupported by consideration; and
•
Amended the notice to cure multiple deficiencies,60 such as: (1) accurately explaining the
voluntary nature and legal effect of opting in, (2) properly defining the scope of the
release, (3) explaining how putative class members can get additional information or seek
legal counsel, (4) providing putative class members with the ability to receive and review
59
Dkt. 78 (Prior Order) at 11.
60
See Dkt. 78 (Prior Order) at 21–24.
11
the settlement agreement, (5) clarifying the court’s neutrality about the merits of
Plaintiff’s allegations, and including disclosure of the Ohio Action.61
However, the following issue must be corrected for the court’s preliminary approval to be
effective:
•
“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).”62
The court will now discuss the incentive payments, attorneys’ fees and costs, and
administrator’s costs.
C. Incentive Payments, Attorneys’ Fees and Costs, and Administrator’s
Costs Are Reasonable
i. Plaintiffs’ Incentive Payments
The court “must examine any service award payments to determine whether they are fair
and reasonable.”63 In its Prior Order, the court requested additional information to justify the
proposed incentive awards for Cazeau, Stojkovic, and Hughes.64 Specifically, the court
61
The following excerpt from the court’s Prior Order provides further background on the Ohio Action:
An FLSA lawsuit against TPUSA is currently pending in the United States District Court for the District
of Ohio. Before the parties sought approval of the [original] Settlement Agreement, the Ohio Action’s
plaintiffs sought conditional certification of their FLSA claims. 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. In response, TPUSA argued the Ohio Action should be stayed and not be
certified because the Settlement Agreement’s release would resolve a substantial percentage of the
proposed Ohio class members’ claims. The Ohio Court agreed with TPUSA and stayed its decision on
the Ohio plaintiffs’ motion for conditional certification pending resolution of this case. 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. 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.
Id. at 24 (quotations and citations omitted).
62
Id. at 22.
63
Lopez v. El Mirador, Inc., No. CV 16-01257 RB-KBM, 2018 WL 582577, at *6 (D. N.M. Jan. 26, 2018).
64
See Dkt. 78 (Prior Order) at 25–26.
12
requested the parties address the following factors should they seek incentive awards in an
amended agreement:
(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.65
The Second Joint Motion provides additional details addressing each factor.66 First, the
Motion explains Cazeau sought competent legal counsel to pursue the Class’s interests. She
identified and contacted other Plaintiffs, helped prepare and consult for the 2019 mediation, and
helped discover facts that formed the basis of the suit, among other things. In total, she
contributed an estimated 30-35 hours.67 The Motion next details that Stojkovic provided critical
information and evidence that formed the basis for the settlement calculations. She contacted
former coworkers, consulted with Class Counsel, and took three days off work to travel to and
participate in out-of-state mediation. She contributed an estimated 55-60 hours.68 Lastly, the
Motion indicates Hughes provided additional information on TPUSA’s practices, especially
those relating to new employee training meetings. His work experience and numerous work
relationships69 allowed Class Counsel to evaluate TPUSA practices over time.70 He contributed
an estimated 20 hours.71
65
Dkt. 78 (Prior Order) at 26; see Robles v. Brake Masters Sys., Inc., No. CIV 10-0135 JB/WPL, 2011 WL 9717448,
at *12 (citing Cook v. Niedert, 142 F.3d 1004, (7th Cir. 1998)).
66
Dkt. 83 (Second Joint Motion) at 20–24.
67
Dkt. 83-4 (Cazeau Decl.) at 2.
68
Dkt. 83-5 (Stojkovic Decl.) ¶ 11.
69
Dkt. 83-6 (Hughes Decl.) ¶ 5.
70
See Dkt. 83 (Second Joint Motion) at 30.
71
Dkt. 83-6 (Hughes Decl.) ¶ 8.
13
Class Counsel points to several risks generally shared by named plaintiffs acting as class
representatives.72 For example, class representatives assume some degree of financial risk for
certain fees and costs that might be assessed against them during litigation.73 In employment
actions, named plaintiffs may risk negative recommendations from past employers when seeking
future employment, and future employers may be hesitant to hire named plaintiffs because of
their involvement in a case.74 While no evidence suggests Cazeau, Stojkovic, or Hughes
suffered any adverse consequences from pursuing this action, the court recognizes such risks do
exist.
The Amended Settlement Agreement proposes the following incentive awards: (1)
$12,500 to Cazeau, (2) $12,500 to Stojkovic, and (3) $2,500 to Hughes.75 Having reviewed the
additional information and party declarations concerning the lead Plaintiffs’ involvement in this
case, the court finds these incentive awards to be fair and reasonable.76
ii. Attorneys’ Fees
As part of its duty to scrutinize a proposed settlement, the court must determine whether
attorney’s fees are reasonable.77 The Tenth Circuit typically applies the percentage-of-the-fund
72
See Dkt. 83 (Second Joint Motion) at 27.
73
See id. (citing Wade v. Kroger Co., No. 3:01CV-699-R, 2008 WL 4999171, at *13 (W.D. Ky. Nov. 20, 2008)
(awarding incentive payment to named plaintiffs based in part on their “assumption of the risk that awardable
litigation and other costs might be assessed against them”)).
74
See Dkt. 83 (Second Joint Motion) at 27 (citing Roberts v. Texaco, Inc., 979 F. Supp. 185, 201 (S.D.N.Y 1997).
75
Dkt. 83-1 (Amended Settlement Agreement) ¶ 4.
76
Class Counsel suggests Cazeau and Stojkovic are entitled to the same incentive reward, despite the difference in
time contributed, because much of Stojkovic’s time accrued during the week of mediation when she traveled out of
state. Dkt. 83 at 23–24. The court accepts this rationale. While the court can easily weigh quantitative
measurements of Plaintiffs’ contributions, Plaintiffs and their counsel are better suited in this case to weigh the
qualitative significance of such contributions. Accordingly, the court accepts the parties’ incentive payment
calculations as fair and reasonable in light of the information provided.
77
See Lopez, 2018 WL 582577, at *6.
14
method to determine fee awards when a common fund is created for settlement.78 Ultimately,
“the percentage reflected in a common fund award must be reasonable.”79
In assessing reasonableness, the Tenth Circuit instructs courts to consider the twelve
Johnson factors:
(1) time and labor required, (2) novelty and difficulty of the question presented by
the case, (3) skill requisite to perform the legal service properly, (4) preclusion of
other employment by the attorneys due to acceptance of the case, (5) customary
fee, (6) whether the fee is fixed or contingent, (7) any time limitations imposed by
the client or circumstances, (8) amount involved and results obtained, (9)
experience, reputation and ability of the attorneys, (10) the “undesirability” of the
case, (11) nature and length of the professional relationship with the client, and (12)
awards in similar cases.80
However, “rarely are all of the Johnson factors applicable . . . in a common fund situation.”81
The Amended Settlement Agreement calculates the common fund at $550,00082 and
proposes attorneys’ fees in the amount of 33.33% (one-third) of the fund, or $183,315.83
Considering the proposed fee award in light of the relevant factors detailed below, the court
concludes that one-third of the Gross Settlement Amount, or $183,315, is reasonable. The court
uses the following relevant factors in making this determination:
Time and Labor Required. This action was filed nearly three years ago.84 After a year
of litigation and motions practice, the parties entered into extensive settlement negotiations with
78
See Gottlieb v. Barry, 43 F.3d 474, 483 (10th Cir. 1994); see also Peterson v. Mortg. Sources, Corp., No. CIV.A.
08–2660–KHV, 2011 WL 3793963, at *12 (D. Kan. Aug. 25, 2011) (“This Court has also typically applied the
percentage of the fund method when awarding fees in common fund, FLSA collective actions.”).
79
Brown v. Phillips Petrol. Co., 838 F.2d 451, 454 (10th Cir. 1988).
80
See Gottlieb, 43 F.3d at 483 (citing Johnson v. Ga. Highway Express, Inc., 488 F.2d 714, 717–19 (5th Cir. 1974)).
81
Uselton v. Commercial Lovelace Motor Freight, Inc., 9 F.3d 849, 854 (10th Cir. 1993).
82
Dkt. 83-1 (Amended Settlement Agreement) ¶ 4.
83
Id.
84
Dkt. 2 (Original Complaint).
15
TPUSA that resulted in a successful settlement.85 Class Counsel has now assisted in two joint
motions to seek certification of the class and approval of the proposed settlement. To date, Class
Counsel has spent over 470 hours prosecuting this case and additional time will be required
before it is fully resolved.86 Counsel’s time and labor supports the proposed fee award.
Preclusion of Other Employment Due to the Case. In light of the time and labor
expended on this case, the court agrees that Class Counsel’s ability to accept and work on other
employment has been impeded.87
Novelty and Difficulty of the Question Presented by the Case. Plaintiffs’ collective
action alleges that TPUSA required class members to arrive fifteen minutes early to an
unspecified number of training meetings without compensating for that time.88 But two defenses
seriously threatened the strength of that claim.89 First, that the alleged non-compensated time
was insubstantial or insignificant, where “employees cannot recover for otherwise compensable
time if it is de minimis.”90 Second, if the Tenth Circuit applied the Klinghoffer rule,91 Plaintiffs’
claim could fail because the total pay received by TPUSA employees during the work week
divided by the hours actually worked exceeded the minimum wage.
Considering the difficulty of the facts in light of the viable defenses, the court finds this
factor supports the fee award.
85
Dkt. 83 (Second Joint Motion) at 10.
86
Dkt. 83-3 (Snow Decl.) ¶ 28.
87
Dkt. 83 (Second Joint Motion) at 24.
88
Dkt. 21 (Amended Complaint) ¶¶ 18–19; Dkt. 83-1 (Amended Settlement Agreement) ¶ 2.
89
See Dkt. 78 (Prior Order) at 9–11; see also Dkt. 44 (First Joint Motion) at 13–14.
90
Lindow v. United States, 738 F.2d 1057, 1062 (9th Cir. 1984) (citation omitted).
91
Reich v. Monfort, Inc., 144 F.3d 1329, 1333–34 (10th Cir. 1998) (citations omitted).
16
Skill Required to Perform the Legal Service Properly. In addition to the challenges
just described, class actions tend to “involve a specialized area of the law which is often complex
and difficult, and where some degree of extra skill is needed to litigate the cases properly.”92
Further, FLSA collective actions are “fundamentally different” from typical Rule 23 class
actions, adding another level of complexity.93 Accordingly, the court finds this factor supports
the proposed fee award.
Experience, Reputation and Ability of the Attorneys. Mr. Snow, lead attorney for
Plaintiffs, has over seventeen years of experience litigating on behalf of employees and
employers.94 His practice has “almost entirely consisted of employment litigation and wage and
hour claims,” including “vast experience . . . in class and collective action litigation.”95 Snow’s
relevant experience supports the proposed fee award.
Customary Fee / Awards in Similar Cases. Class Counsel seeks a contingent fee of
one-third of the settlement fund, or $183,315.96 This is customary and consistent with fee
arrangements in similar cases.97
92
Farley v. Family Dollar Stores, Inc., No. 12-CV-00325-RM-MJW, 2014 WL 5488897, at *4 (D. Colo. Oct. 30,
2014).
93
See Genesis Healthcare Corp. v. Symczyk, 569 U.S. 66, 74 (2013).
94
Dkt. 83-3 (Snow Decl.) ¶ 2–3.
95
Id.
96
Class Counsel provides a helpful lodestar calculation of $140,104 to assist the court in cross checking the fee
amount. An award of $183,315 amounts to a 1.31 multiplier, which is comparatively modest. See In re Qwest
Commc’ns Int’l, Sec. Litig., 625 F. Supp. 2d 1143, 1151 (D. Colo. 2009) (“[C]ounsel who create a common fund for
the benefit of a class are rewarded with fees that often are at least two times the reasonable lodestar figure, and in
some cases reach as high as five to ten times the lodestar figure.”).
97
See e.g., Uselton, 9 F.3d at 854 (approving fee award of 29% of the common fund); Owner–Operator Indep.
Drivers Ass'n, Inc. v. C.R. England, Inc., No. 2:02-CV-950, 2014 WL 3943994, at *2 (D. Utah June 19, 2014)
(approving a fee award that represented 33.3% of a settlement fund); Lucken Family Ltd. P'ship, LLP v. Ultra
Resources, Inc., 2010 WL 5387559, *5–6 (D. Colo. Dec. 22, 2010) (“The customary fee award to class counsel in a
common fund settlement is approximately one third of the total economic benefit bestowed on the class.”); In re
Safety Components, Inc. Sec. Litig., 166 F. Supp. 2d 72, 101 (D.N.J. 2001) (collecting cases approving fee requests
of between 27.5% and 33.8% of the common fund, and ranging from $1.46 to $37.1 million).
17
Fixed or Contingent Fee / “Undesirability” of the Case. Given the contingent nature
of the representation, Class Counsel risked receiving no compensation for over 470 hours of
work in the event of a loss.98 Here, Plaintiffs also claim to have incurred $11, 573.34 in
litigation expenses.99 These litigation costs similarly would have gone unreimbursed.100 Thus,
the contingent nature of Class Counsel’s representation supports the requested fee award.
Moreover, the significant time commitment and financial investment coupled with risk of
no payment enhances the undesirability of this case.101
Amount Involved and Results Obtained. Class Counsel obtained a settlement amount
of $550,000, providing $4.60 for each opt-in plaintiff, in a case where the Defendant’s liability
could have been as high as $3,534,302.50.102 With an estimated 20% opt-in rate, each opt-in
plaintiff will receive a payment of approximately $22.99 instead of the $72.50 they would
receive if Plaintiffs were to succeed on their claims.103 However, as discussed previously, “the
presence of [lawful defenses] to payment . . . warrant a reasonable compromise.”104
Accordingly, this factor supports the fee award.
iii. Costs and Expenses
The FLSA provides for recovery of “a reasonable attorney’s fee . . . and costs of the
action.”105 Class Counsel asks to be reimbursed from the Gross Settlement Amount for out-of-
98
Dkt. 83 (Second Joint Motion) at 25.
99
Id.
100
Id.
101
See id. at 26; see also In re Shell Oil Refinery, 155 F.R.D. 552, 572 (E.D. La. 1993).
102
Dkt. 78 (Prior Order) at 17 n.94.
103
Dkt. 83 (Second Joint Motion) at 13.
104
Moreno, 729 F. Supp. at 1348.
29 U.S.C. § 216(b); see Tuten v. United Airlines, Inc., 41 F. Supp. 3d 1003, 1009 (D. Colo. 2014) (“[A]n attorney
who creates or preserves a common fund for the benefit of the class is entitled to receive reimbursement of all
reasonable costs incurred.” (internal quotation marks omitted)).
105
18
pocket litigation costs in the amount of $11,573.34.106 This reimbursement is agreed to in the
Amended Settlement Agreement107 and disclosed to putative class members in the notice.108 It
represents just over 2% of the settlement fund. For these reasons, the court finds this request
reasonable.
iv. Administrator’s Costs
The Amended Settlement Agreement proposes administrator’s costs estimated at
$103,500 to be paid from the Gross Settlement Amount. This amounts to nearly 19% of the
settlement fund.109 The administrator’s cost covers the preparation of the opt-in website, the
mailing of notice postcards and settlement checks, and the tax reporting of such payments for
48,749 potential settlement class members.110 The parties received multiple bids before selecting
Simpluris, Inc. as the Class Administrator and worked with Simpluris to minimize costs.111
Given the large size of the potential settlement class and the parties’ efforts to minimize costs,
the proposed Class Administrator’s costs are reasonable.112
D. Fairness Hearing and Final Approval of the Settlement Agreement
Unlike Rule 23 class action settlements, fairness hearings are not required for approval of
collective action settlements under the FLSA.113 However, many courts have determined that
“fairness hearings should be held unless the parties notify the court that the opt-in plaintiffs had
106
Dkt. 83-3 (Snow Decl.) ¶ 31; Dkt. 83 at 13.
107
Dkt. 83-1 (Amended Settlement Agreement) ¶¶ 5, 15 (litigations costs capped at $12,000).
108
Dkt. 83-1 (Amended Settlement Agreement) at 17.
109
$103,500 divided by $550,000 equals 18.82%.
110
Dkt. 83 (Second Joint Motion) at 31.
111
Id.
112
See, e.g., Campbell v. C.R. England, Inc., 2015 WL 5773709, at *8 (D. Utah Sept. 30, 2015) (approving
administrator’s costs of $60,000 for a class size of 10,000 individuals); Whittington, 2013 WL 6022972, at *6
(approving administrative fees of $85,000 for a class size of 475 individuals).
113
See 29 U.S.C. § 216(b).
19
notice of the settlement and an opportunity to object.”114 The court will reserve the question of
whether a fairness hearing and/or formal motions practice is necessary to convert to final
approval until submission of the class and any objections received.
CONCLUSION
For the foregoing reasons, the court GRANTS the parties’ Second Joint Motion115 and
hereby ORDERS that:
1. The instant FLSA collective action settlement is conditionally certified for purposes
of settlement;
2. The Amended Settlement Agreement is given PRELIMINARY APPROVAL as fair
and reasonable;
3. The parties are directed to implement the administration of the settlement as set forth
in the Amended Settlement Agreement; and
4. Pursuant to the Amended Settlement Agreement, the names and written consents of
individuals who opt-in to the action and all timely objections shall be electronically
filed with the court no later than three (3) business days from the end of the objection
period.116
IT IS FURTHER ORDERED that the parties amend the notice to include language
“explaining that 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
114
Stubrud v. Daland Corp., No. 14-2252-JWL, 2015 WL 5093250, at *1 (D. Kan. Aug. 28, 2015) (citations
omitted).
115
Dkt. 83 (Second Joint Motion).
116
Dkt. 83-1 (Amended Settlement Agreement) ¶ 10.
20
opt-in plaintiff).”117 The parties must file this amended notice of settlement with the court no
later than seven (7) days from this order.
SO ORDERED this 29th day of April 2021.
BY THE COURT:
________________________________
ROBERT J. SHELBY
United States Chief District Judge
117
Dkt. 78 (Prior Order) at 22.
21
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