Underwood v. KC Transport, Inc. et al

Filing 60

MEMORANDUM OPINION AND ORDER granting 57 JOINT MOTION for approval of a settlement agreement and for dismissal of this action with prejudice; and directing that this matter be stricken from the docket. Signed by Clerk of Court on 3/11/2019. (cc: counsel of record) (taq)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF WEST VIRGINIA
AT CHARLESTON
ANGELA UNDERWOOD, individually and
on behalf of others similarly situated,
Plaintiff,
v.

Civil Action No. 2:17-cv-02522

KC TRANSPORT, INC.,
d/b/a KC TRANSPORT OF WEST VIRGINIA, INC.,
a West Virginia Corporation,
and KENNY COMPTON,
a West Virginia resident,
Defendants.

MEMORANDUM OPINION AND ORDER
Pending is the parties’ joint motion, filed January
18, 2019, for approval of a settlement agreement and dismissal
of this action with prejudice.

I.

Background

Plaintiff Angela Underwood initiated this action in
this court on April 26, 2017, charging defendant KC Transport,
Inc. with alleged violations of the Fair Labor Standards Act
(“FLSA”), 29 U.S.C. § 201 et seq.

The plaintiff, a former

employee of KC Transport, claimed that KC Transport owed her and
all other similarly situated individuals unpaid overtime wages.

This action has never been certified, either conditionally or
finally, pursuant to 29 U.S.C. 216(b).1
After both parties fully briefed their cross-motions
for summary judgment, the parties informed the court that they
had reached a settlement through mediation.

The parties later

filed the pending motion, seeking approval of a settlement that
would dismiss with prejudice plaintiff’s claims.

Attached to

the motion is an unexecuted “Mediated Partial Settlement
Agreement.”2
The settlement between the parties here is intended to
settle not only the claims raised in this case but also an agediscrimination dispute between the parties in state court.
Joint Mot., ECF No. 57, at 3.

See

The Settlement Agreement

describes a universal settlement for both claims in the amount
of $10,000.

Settlement Agreement, ECF No. 57-1.

The parties

later informed the court, by filing a supplemental joint motion
on February 26, 2019, that $5,000 was the amount allocated to
1

There is a general consensus that an FLSA action becomes moot
once the named plaintiffs settle their claims because they lack
a personal interest in representing potential opt-in plaintiffs.
See Genesis HealthCare Corp. v. Symczyk, 569 U.S. 66, 73 (2013);
Faubel v. Grogg’s Heating & Air Conditioning, Inc., No. 2:17-cv02410, 2018 WL 2339081, at *2 (S.D.W. Va. May 22, 2018)
(providing a thorough evaluation of the effect of settlement of
a collective action by the named plaintiff on potential opt-in
plaintiffs).
2 The parties assert that the agreement has been executed by all
parties. Joint Mot., ECF No. 57, at 2.
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settle the FLSA matter.
2.

Supplemental Joint Mot., ECF No. 58, at

While the Settlement Agreement filed with the court on

January 18, 2019 contained a confidentiality provision, which is
inconsistent with FLSA jurisprudence, the parties filed, on
March 8, 2019, a stipulation that any confidentiality provision,
or reference thereto, relating to the above-styled civil action,
including the filed Settlement Agreement, shall be deemed
stricken.

ECF No. 59.

All payments have already been made to

the plaintiff and her counsel.

II.

Joint Mot., ECF No. 57, at 2.

Standard of Review

“The FLSA establishes federal minimum-wage, maximumhour, and overtime guarantees that cannot be modified by
contract.”

Genesis HealthCare, 569 U.S. at 69.

Doing so would

thwart the purpose of the Act, which is “to protect all covered
workers from substandard wages and oppressive working hours,
‘labor conditions [that are] detrimental to the maintenance of
the minimum standard of living necessary for health, efficiency,
and general well-being of workers.’”

Barrentine v. Arkansas-

Best Freight Sys., 450 U.S. 728, 739 (1981) (alteration in
original) (quoting 42 U.S.C. § 202(a)).

Consequently, FLSA

claims for back wages can be settled in only two ways, only one
of which is relevant here: “When employees bring a private
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action for back wages under the FLSA, and present to the
district court a proposed settlement, the district court may
enter a stipulated judgment after scrutinizing the settlement
for fairness.”

Lynn's Food Stores, Inc. v. United States, 679

F.2d 1350, 1352-53 (11th Cir. 1982) (citing Schulte, Inc. v.
Gangi, 328 U.S. 108 (1946), and Jarrard v. Southeastern
Shipbuilding Corp., 163 F.2d 960, 961 (5th Cir. 1947)).
Because the Court of Appeals for the Fourth Circuit
has not yet had occasion to endorse a standard for approving
FLSA settlements, “district courts in this circuit typically
employ the considerations set forth by the Eleventh Circuit in
Lynn's Food Stores.”

Kim v. Confidential Studio Inc., No. PWG-

15-410, 2017 WL 3592455 at *2 (D. Md. Aug. 21, 2017) (citing
cases).

As succinctly stated by the district court in

Confidential Studio,
[t]he settlement must “reflect[ ] a fair and
reasonable resolution of a bona fide dispute over FLSA
provisions,” which includes findings with regard to
(1) whether there are FLSA issues actually in dispute,
(2) the fairness and reasonableness of the settlement
in light of the relevant factors from [Federal Rule of
Civil Procedure] 23, and (3) the reasonableness of the
attorneys' fees, if included in the agreement.
Id. (second alteration in original) (citing cases and quoting
Lynn's Food Stores, 679 F.2d at 1355).

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III. Discussion

First, the FLSA issue here is actually in dispute.
The plaintiff alleges that she is a non-exempt employee,
entitled to unpaid overtime wages she earned while working more
than forty hours per week; defendants disagree.
Next, the court turns to the relevant factors from
Rule 23’s assessment for fairness and reasonableness.

Those

factors are as follows:
(1) The extent of discovery that has taken place; (2)
the stage of the proceedings, including the
complexity, expense and likely duration of the
litigation; (3) the absence of fraud or collusion in
the settlement; (4) the experience of counsel who have
represented the plaintiffs; (5) the probability of
plaintiffs’ success on the merits; and (6) the amount
of the settlement in relation to the potential
recovery.
Patel v. Barot, 15 F. Supp. 3d 648, 656 (E.D. Va. 2014); see
also Flinn v. FMC Corp., 528 F.2d 1169, 1173 (4th Cir. 1975).
The parties have had the opportunity to conduct and
complete discovery in this matter, and both parties have fully
briefed the cross-motions for summary judgment.

Counsel for the

parties, who purport to be “capable attorneys who have the
necessary experience to protect the rights of the Parties in
this matter,” believe that the settlement is fair, Joint Mot.,

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ECF No. 57, at 3, and there is no evidence or suggestion that
fraud or collusion impacted the settlement.
Further, in reviewing the documents filed with the
court over the course of this litigation, it is apparent that
defendants have a strong defense to Ms. Underwood’s FLSA claims.
The plaintiff is a truck driver who hauled coal for KC Transport
within the State of West Virginia but which coal was destined
for interstate travel.

The FLSA overtime requirement does not

apply to “any employee with respect to whom the Secretary of
Transportation has power to establish qualifications and maximum
hours of service pursuant to the provisions of section 31502 of
Title 49.”

29 U.S.C. § 213(b).

The Secretary of Transportation

controls the requirements for employees whose activities affect
the safety of operation of motor vehicles for private motor
carriers who engage in interstate commerce.

See Troutt v.

Stavola Bros., Inc., 107 F.3d 1104, 1106-07 (4th Cir. 1997).
Here, the defendants persuasively contend that the FLSA does not
apply to Ms. Underwood as she falls under the motor carrier
exemption.
In view of the strength of the defendants’ interstate
commerce defense, there is serious doubt that plaintiff has a
viable FLSA claim.

The court deems the settlement amount,

though it is somewhat diminutive for a plaintiff seeking
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approximately twenty hours of weekly overtime wages over the
six-month period of her employment, to be fair and reasonable.
Finally, the award of attorneys’ fees is reasonable.
As this court has explained,
the FLSA contemplates that “the wronged employee
should receive his full wages . . . without incurring
any expense for legal fees or costs.” Maddrix v.
Dize, 153 F.2d 274, 275-76 (4th Cir. 1946).
Therefore, the reviewing court must assess the
reasonableness of the attorney’s fees to be awarded
“to assure both that counsel is compensated adequately
and that no conflict of interest taints the amount the
wronged employee recovers under a settlement
agreement.” Silva v. Miller, 307 F. App'x 349, 351
(11th Cir. 2009) (unpublished opinion); see also
Poulin v. Gen. Dynamic Shared Res., Inc., 3:09-cv00058, 2010 U.S. Dist. LEXIS 47511, at *3-4 (W.D. Va.
May 5, 2010).
Bryant v. Lab. Corp. of Am. Holdings, No. 2:11-cv-00604, 2012
U.S. Dist. LEXIS 101713, at *3-4 (S.D. W. Va. July 23, 2012).
Counsel for the plaintiff will receive $2,500, which constitutes
50% of the total FLSA settlement amount.

Plaintiff’s counsel

asserts that this amount represents a reduced reimbursement for
fees and costs, despite the fact that the percentage is high.
Supplemental Joint Mot., ECF No. 58, at 2.

Indeed, in light of

counsel’s preparing the complaint, conducting discovery, and
briefing the motions for summary judgment, it is apparent that
the fee is a modest one.

Under all the circumstances, the

attorney’s fee is a fair and reasonable one.

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IV.

Conclusion

It is, accordingly, ORDERED that the parties’ joint
motion for approval of the settlement agreement and for
dismissal of this action with prejudice be, and hereby is,
granted and that this matter be stricken from the docket.
The Clerk is directed to transmit copies of this
memorandum opinion and order to all counsel of record.
ENTER: March 11, 2019

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