Taylor v. Dolgencorp, Inc. et al
Filing
91
OPINION. Signed by Judge James P. Jones on April 28, 2011. (aec)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF VIRGINIA
ABINGDON DIVISION
JOHN TAYLOR,
Plaintiff,
v.
DOLGENCORP, INC.,
Defendant.
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Case No. 1:09CV00002 (LEAD)
OPINION
By: James P. Jones
United States District Judge
C. Lance Gould, Beasley, Allen, Crow, Methvin, Portis & Miles, P.C.,
Montgomery, Alabama, for Plaintiffs, and Joel S. Allen, Morgan, Lewis & Bockius
LLP, Dallas, Texas, for Defendant.
In this Opinion, I set forth the basis for approval of the parties= settlements of
overtime claims under the provisions of the Fair Labor Standards Act (AFLSA@), 29
U.S.C.A. '' 201-219 (West 1998 & Supp. 2010).
The parties have filed a Joint Motion for Order Approving Individual
Settlements in 16 related FLSA cases. In accord with the directions of the court,
the parties have submitted for each case a copy of the individual Settlement
Agreement, which states the amount of money to be paid in settlement as to that
plaintiff. These individual settlement amounts vary.
In addition, there has been disclosed the maximum amounts of each
plaintiff=s monetary claim—from the point of view of each side—which amounts
also vary among the plaintiffs.
For each individual plaintiff, the plaintiffs=
attorneys have submitted their requested attorneys= fees and expenses and the basis
therefor. 1
The plaintiffs are current or former employees of the defendant, Dolgencorp,
Inc., the operator of Dollar General retail discount stores.2 They are some of the
many individual employees across the country 3 who have sued Dollar General
seeking overtime pay on the ground that they did not fall within the executive
exemption of the FLSA. Under that exemption, overtime pay is not required for
Aany employee employed in a bona fide executive . . . capacity.@ 29 U.S.C.A. '
213(a)(1).
While there are differing regulations of the Department of Labor interpreting
this exemption, depending upon whether the subject employment occurred before
1
The individual plaintiffs and case numbers are John Taylor, 1:09CV00002; Eve
Prater, 1:09CV00003; Penny Ahlberg, 1:09CV00004; John Shannon, 1:09CV00005;
Bobbie Holden, 1:09CV00006; Cynthia Murphy, 1:09CV00007; Stella Shepherd,
1:09CV00009; Ernest Tate, 1:09CV00010; Bobby Tipton, 1:09CV00011; Collin Childers,
1:09CV00012; Catherine Perkins, 1:09CV00013; Teresa Hale, 1:09CV00014; Brenda
Roe, 1:09CV00015; Teresa Whomble, 1:09CV00016; Robin Pruitt, 1:09CV00017; and
Michael Jones, 1:09CV00018. All of the plaintiffs are represented by the same counsel.
2
For convenience, the defendant will be referred to as ADollar General.@
3
The individual cases were originally filed in 2006 in the United States District
Court for the Northern District of Alabama and thereafter transferred to various districts
around the country. It is represented that there are approximately 800 such cases
pending.
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or after 2004, compare 29 C.F.R. ' 541.119(a) (pre-2004) with 29 C.F.R. '
541.100(a) (2004), it appears that in each of the present cases the central factual
issue is whether the primary duty of the employee was management. The plaintiffs
claim that their primary duty was not management and were thus denied overtime
pay for hours worked in excess of 40 hours in any workweek. Dollar General
contends to the contrary.
While the parties have agreed to settle, any such settlement under the FLSA
must be approved by the court, Aafter scrutinizing the settlement for fairness.@
Lynn=s Food Stores, Inc. v. United States, 679 F.2d 1350, 1353 (11th Cir. 1982).
The settlement ought to be approved if it Areflect[s] a reasonable compromise over
issues, such as FLSA coverage or computation of back wages, that are actually in
dispute.@ Id. at 1354.
I have carefully considered the information supplied to me by the parties.
Based on that information, I will approve the settlement in each individual case.
While the settlement amounts to be paid to each plaintiff are significantly less
than the amount of back wages and liquidated damages claimed, there is a
significant dispute as to the application of the executive exemption in each case. In
the only case in which I have had an opportunity to rule on summary judgment, I
found that the plaintiff=s factual claims, if believed by a jury, might reasonably
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result in a verdict for the plaintiff. Hale v. Dolgencorp, Inc., No. 1:09CV00014, at
*7 (W.D. Va. June 23, 2010). Since then, however, a decision by the United States
Court of Appeals for the Fourth Circuit on similar facts has substantially undercut
my decision.
In re Family Dollar FLSA Litigation, No. 09-2029, 2011 WL
989558, at *8 (4th Cir. Mar. 22, 2011), reh=g denied (Apr. 20, 2011) (holding that
even though discount store manager spent most of her time on nonmanagerial tasks,
because she remained responsible for addressing managerial issues that might arise
even while performing nonmanagerial tasks, she was not misclassified under the
executive exemption).
In addition to the uncertainty of any ultimate victory by the plaintiffs on the
merits, the amounts of damages are in dispute. Dollar General contends that even
if the plaintiffs were successful, the calculation of backpay would be limited by the
so-called Afluctuating workweek@ method, used when there is no employment
agreement as to the specific number of hours to be worked each week, and the
number of hours worked per week fluctuates. By this method, the base hourly rate
is to be determined by dividing the fixed weekly salary by the number of hours
worked in any given week.
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By contrast, the plaintiffs claim backpay based on an assumed hourly rate
determined by dividing the weekly salary by 45 hours, even when the actual
number of hours worked for any given week exceeded 45.
These conflicting methods of calculation of backpay make a significant
difference as to the amount of any recovery. A recent Fourth Circuit decision
favors Dollar General=s proposed method.
Desmond v. PNGI Charles Town
Gaming, L.L.C., 630 F.3d 351, 357 (4th Cir. 2011).
Dollar General also disputes the ability of the plaintiffs to extend the period
of possible recovery from two to three years by proof of a willful violation. See
McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133 (1988) (holding that willful
violation of FLSA requires showing that employer either knew or showed reckless
disregard of whether its conduct was prohibited).
Dollar General also contends
that it could prove that it acted in good faith and had reasonable grounds for
believing that its classification of the plaintiffs as exempt was not in violation of the
FLSA, thus obviating any award of liquidated damages. See 29 U.S.C.A. ' 260.
While the settlement amounts are less than could possibly be obtained by the
plaintiffs, under all of the circumstances I find that they are fair and reasonable
compromises of disputed claims. See Alleyne v. Time Moving & Storage Inc., 264
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F.R.D. 41, 57-58 (E.D.N.Y. 2010) (approving FLSA overtime claims where
settlements were only 13% of best possible recovery).
The law requires the employer to pay a reasonable attorneys= fee to any
successful FLSA claimant. 29 U.S.C.A. ' 216(a). In order to finally approve the
settlements here, I thus must also consider the reasonableness of the attorneys= fees
and expenses, which, pursuant to the Settlement Agreements, are to be paid from
the individual settlement amounts.
Based on my review, I find the amounts
reasonable in light of the settlement amounts and the time records submitted.4
While the parties have agreed to the confidentiality of their settlements, as I
have previously ruled, I will not indefinitely seal the Settlement Agreements and
supporting material, although I will permit these documents to be sealed for two
years, in order to facilitate the individual negotiations of other pending cases. See
Murphy v. Dolgencorp, Inc., Nos. 1:09CV00007, 1:09CV00014, 2010 WL
4261310, at *1 (W.D. Va. Oct. 28, 2010).
For all of these reasons, I will enter separate orders approving the settlements
and dismiss the cases with prejudice.
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While the material before me does not affirmatively show that the amount of the
proposed attorneys= fees and expenses to be deducted from each settlement amount have
been disclosed to the individual plaintiff, I assume that this is the case.
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DATED: April 28, 2011
/s/ JAMES P. JONES
United States District Judge
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