Nickell, Eugene et al v. PGA Inc.

Filing 160

ORDER re 157 Joint Motion for Preliminary Approval of Settlement Agreement filed by Erik Sinclair, Eric Schilling, David Krall, Blaine Krohn, Eugene Nickell. Responses due by November 1, 2019. Signed by District Judge William M. Conley on 10/18/2019. (voc)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
ERIC SCHILLING, BLAINE KROHN,
and ERIK SINCLAIR, on behalf of
themselves and others similarly situated,
Plaintiffs,

ORDER

v.
16-cv-202-wmc

PGA INC.,
Defendant.

After granting judgment in defendant PGA Inc.’s favor, plaintiffs appealed. On
appeal, the parties apparently reached a settlement of the remaining collective action and
class claims, prompting the Seventh Circuit to remand the case for the limited purpose of
this court conducting settlement approval. (Dkt. #156.) Before the court is the parties’
joint motion for preliminary approval of their settlement agreement. (Dkt. #157.) Having
reviewed the parties’ agreement, the court notes one significant concern, which the parties
will need to address before the court can grant preliminary approval.
This case involves both an FLSA collective action and a Rule 23 class. Of the
approximately 100 employees involved, only 12 employees affirmatively have opted into
the collective action, while 38 affirmatively opted out of the Rule 23 class. Material to the
court’s concern, the settlement agreement contains three release provisions: (1) a very
broad, general release for the three named plaintiffs; (2) a release by collective action
members of “all wage and hour claims alleged in Plaintiffs’ Complaint, including claims
arising pursuant to” the FLSA and Wisconsin law and regulations; and (3) a release by
Rule 23 class members of “all wage and hour claims alleged in Plaintiffs’ Complaint,
including wage and hour claims arising out of laws or regulations by the State of

Wisconsin.” (Settlement Agreement (dkt. #17-1) 2-3.)
While the Rule 23 class action members release does not expressly list any FLSA
claim they may have, the broad language releasing “all wage and hour claims alleged in
Plaintiffs’ Complaint” would appear to encompass any FLSA claims. Moreover, in the
proposed notice describing what collective action and class members release, there is no
distinction between the FLSA collective action members and the Rule 23 class members.
(Proposed Notice (dkt. #157-1) 19.)
In choosing not to opt into the FLSA collection action, however, the individuals
who are only in the Rule 23 class expressly preserved their individual FLSA claims. Indeed,
the FLSA Collective Action Notice approved by this court and distributed to the
prospective members, states:
If you choose not to join this lawsuit, you will not be affected
by any judgment or settlement of the Fair Labor Standards Acts
claims in this case, whether favorable or unfavorable to the
class. You will not be entitled to share any amounts recovered
by the class. You will be free to file your ow lawsuit, if you
wish to do so.
(FLSA Collective Action Notice (dkt. #23-2) 4 (emphasis added.) Consistent with that
notice, the individuals who did not opt into the FLSA collective action are not participating
in the settlement of these claims, nor can counsel waive any claims retained by those
individuals. Accordingly, any FLSA claims they might have should not be released by the
settlement.1 The court cannot approve a settlement which purports to release those claims

To the extent that any of the individuals who opted into the FLSA collective action also opted
out of the Rule 23 class, then requiring those individuals to release the average rate claim that only
arises under Wisconsin state law would also be problematic. The court assumes that this result is
unlikely, but the parties should clarify if any individuals fall within this camp in their response to
this order.
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2

for the individuals who did not opt in to the FLSA collective action. See Sherburn v. Duluth
Trading Co., LLC, No. 11-cv-438, slip op. at *4-6 (W.D. Wis. Aug. 16, 2012) (dkt. #38).
Given the difference in the language used in the release provisions in the parties’
settlement, the parties may not have intended to release the FLSA claims of those
individuals who are only in the Rule 23 class. If not, the parties should have no problem
with amending the release language in the settlement agreement and in the proposed notice
to reflect clearly that individuals who did not opt into the FLSA collective action and are
only members of the Rule 23 class do not release their FLSA claims, and providing the
amended agreement for the court’s approval. If the parties intended for those individuals
also to release their FLSA claims, however, they will need to submit supplemental briefing
providing support for such a broad release. Either response is due on or before November
1, 2019.
Entered this 18th day of October, 2019.
BY THE COURT:

/s/
__________________________________
WILLIAM M. CONLEY
District Judge

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