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Brown v. Ak Lawncare, Inc.

United States District Court, E.D. Michigan, Southern Division

May 11, 2017

DANIEL BROWN, NATHANEAL BLACKBURN, and TIMOTHY MINER, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
AK LAWNCARE, INC., and ADAM KAROUB, Defendants.

          Mona K. Majzoub United States Magistrate Judge.

          OPINION AND ORDER GRANTING RENEWED JOINT MOTION FOR APPROVAL OF SETTLEMENT (ECF NO. 38)

          PAUL D. BORMAN UNITED STATES DISTRICT JUDGE.

         Before the Court is the parties' Renewed Joint Motion for Approval of Settlement in this Fair Labor Standards Act putative collective action. (ECF No. 38.) The Court has determined that oral argument is not necessary for proper resolution of this motion and will resolve the matter on the parties' written submissions. E.D. Mich. L. R. 7.1(f)(2).

         I. BACKGROUND

         Plaintiffs, manual laborers who provided lawn maintenance and snow removal services for the Defendants, filed this putative collective action on October 28, 2014, claiming that Defendants violated the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., by failing to pay them, and similarly situated individuals, one and one-half times their regular rates of pay for hours worked over 40 per week. (ECF No. 1, Complaint ¶¶ 1-3.) On October 14, 2015, this Court entered an Order conditionally certifying the action as a collective action under the FLSA, 29 U.S.C. § 216(b). (ECF No. 23, Opinion and Order Granting Conditional Certification and Requiring Submission of Revised Proposed Notice.) On March 16, 2016, after receiving Plaintiffs' revised proposed notices, the Court issued an Order approving the notice of lawsuit with opportunity to join in and permitting dissemination of the notice. (ECF No. 30, Order Approving the Notice of Lawsuit With Opportunity to Join In.) On June 2, 2016, Plaintiffs filed a Notice of Filing of Consents, informing the Court that only three individuals had elected to opt-in to the putative collective action. (ECF No. 31, Plaintiffs' June 2, 2016 Notice of Filing of Consents.)

         On November 16, 2016, there having been no activity in the case since the June 2, 2016 Filing of Consents, the Court issued a Notice to Appear for a status conference on December 12, 2016. At that status conference, Plaintiffs' counsel informed the Court that Plaintiffs were still waiting to receive time records from the Defendants for the three named Plaintiffs and the three opt-ins so that they could begin to assess the damages. The Court gave the parties 60 days to sort out the time records and scheduled another status conference for February 14, 2017. At the February 14, 2017 status conference, it appeared that little progress had made with regard to the time records and the Court instructed the Plaintiff to prioritize this matter, to be diligent about resolving this three-year old case, and to report back to the Court within 60 days with evidence of their efforts or face dismissal of this action for failure to prosecute. (ECF No. 34, Order Regarding the Court's Instructions to the Parties at the February 14, 2017 Status Conference.)

         The parties have now agreed to a resolution of Plaintiffs' claims and seek Court approval of their proposed Settlement Agreement. (ECF No. 38-2, Settlement Agreement and Release.) Because the Plaintiffs' claims presented a bona fide legal dispute regarding compensation for their overtime work, and because the proposed Settlement Agreement represents a fair and reasonable resolution of those claims, the Court GRANTS the joint motion for approval of settlement.

         II. LEGAL STANDARD

         “The FLSA was enacted for the purpose of protecting workers from substandard wages and oppressive working hours.” Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350, 1352 (11th Cir. 1982)). “Recognizing that there are often great inequalities in bargaining power between employers and employees, Congress made the FLSA's provisions mandatory; thus, the provisions are not subject to negotiation or bargaining between employers and employees.” Id. Thus, “an employee may not waive or otherwise settle a FLSA claim for unpaid wages for less than the full statutory damages unless the settlement is supervised by the Secretary of Labor or made pursuant to a judicially supervised stipulated settlement.” Wolinsky v. Scholastic Inc., 900 F.Supp.2d 332, 335 (S.D.N.Y. 2012).

         Settlements of FLSA claims that are reached in the context of litigation, where “[t]he employees are likely to be represented by an attorney who can protect their rights under the statute, ” are proper subjects for judicial review and possible approval because they are “more likely to reflect a reasonable compromise of disputed issues than a mere waiver of statutory rights brought about by an employer's overreaching.” Lynn's, 679 F.2d at 1354. “If a settlement in an employee FLSA suit does reflect a reasonable compromise over issues, such as FLSA coverage or computation of back wages, that are actually in dispute . . . the district court [may] approve the settlement in order to promote the policy of encouraging settlement of litigation.” Id. (alterations added).

         “In reviewing a settlement of an FLSA private claim, a court must scrutinize the proposed settlement for fairness, and determine whether the settlement is a fair and reasonable resolution of a bona fide dispute over FLSA provisions.” Williams v. K&K Assisted Living LLC, No. 15-cv-11565, 2016 WL 319596, at *1 (E.D. Mich. Jan. 27, 2016) (internal quotation marks and citations omitted). In determining whether a proposed settlement is fair and reasonable, the court considers several factors:

(1) the plaintiff's range of possible recovery; (2) the extent to which the settlement will enable the parties to avoid anticipated burdens and expenses in establishing their respective claims and defenses; (3) the seriousness of the litigation risks faced by the parties; (4) whether the settlement agreement is the product of arm's-length bargaining between experienced counsel; (5) and the possibility of fraud or collusion.

Wolinsky, 900 F.Supp.2d at 335 (internal quotation marks and citations omitted). See also Williams v. Alimar Security, Inc., No. 13-cv-12732, 2017 WL 427727, at *2-3 (E.D. Mich. Feb. 1, 2017) (citing Wolinsky and analyzing these same factors to conclude that proposed FLSA settlement agreement was fair and reasonable). “A district court may choose to consider only factors that are relevant to the settlement at hand.” Snook v. Valley OB-Gyn Clinic, P.C., No. 14-cv-12302, 2015 WL 144400, at *1 (E.D. Mich. Jan. 12, 2015). “Where a proposed settlement of FLSA claims includes the payment of attorneys' fees, the must also assess the reasonableness of the fee award.” Wolinsky, 900 F.Supp.2d at 336.

         III. ...


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