United States District Court, E.D. Michigan, Southern Division
Steven Whalen Mag. Judge.
OPINION AND ORDER APPROVING SETTLEMENT AGREEMENT
E. LEVY UNITED STATES DISTRICT JUDGE.
filed this suit on October 29, 2018, alleging that Defendants
violated the Fair Labor Standards Act (FLSA), 29 U.S.C.
§201, et seq, by improperly deducting
eight-hour sleeping periods from Plaintiff's
twenty-four-hour shifts. (ECF No. 1.) Plaintiff seeks
recovery of unpaid minimum wage and overtime compensation.
Id. On December 11, 2019, the parties filed a joint
Motion for Approval of Settlement. (ECF No. 16.) According to
the Settlement Agreement, the parties agree to a settlement
amount of $45, 000.00. (Id. at PageID.55.)
Plaintiff's counsel will receive $18, 000 in attorney
fees and $498.35 in costs, leaving Plaintiff with a net
settlement of $26, 501.65. Id.
approval of settlement agreements in FLSA cases is necessary
for an agreement to be enforceable. Cheeks v. Freeport
Pancake House, Inc., 796 F.3d 199, 206 (2d Cir. 2015);
Smolinski v. Ruben & Michelle Enters. Inc., Case
No. 16-cv-13612, 2017 WL 835592, at *1 (E.D. Mich. Mar. 3,
2017). This requires the court to determine whether the
settlement is a “fair and reasonable resolution of a
bona fide dispute over FLSA provisions.” Lynn's
Food Stores, Inc. v. United States, 679 F.2d 1350, 1355
(11th Cir. 1982).
there is not a prescribed process for making this
determination, courts generally consider the following
factors in non-collective FLSA cases:
(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; and (5) the
possibility of fraud or collusion.
See Williams v. Alimar Sec., Inc., No. 13-12732,
2017 WL 427727, at *1 (E.D. Mich. Feb. 1, 2017) (citing
Wolinsky v. Scholastic, Inc., 900 F.Supp.2d 332, 335
(S.D.N.Y. 2012)) (internal quotation marks and citation
omitted). When the settlement agreement includes the payment
of attorney fees, the court must also assess the
reasonableness of that amount before approving the
settlement. Wolinsky, 900 F.Supp.2d at 336.
reviewing Plaintiff's complaint, the settlement
agreement, and Plaintiff's counsel's billing, the
Court approves the settlement.
case, Plaintiff could have recovered a maximum of $68, 217.71
in actual damages, assuming each unpaid hour was compensable.
(ECF No. 16, PageID.59.) When added to Plaintiff's
maximum liquidated damages of $68, 217, 71, Plaintiff's
recovery ceiling is $136, 435.42. Id. The proposed
settlement amount of $45, 000 is thirty-three percent of
Plaintiff's recovery ceiling.
proposed settlement will allow the parties to avoid the
burden and expenses of trial.
parties face serious litigation risks. Defendants'
documentation supports actual damages of only $4, 862.49.
Id. Given the uncertainty of trial and
Defendants' trial plan of contesting all liability (ECF
No. 16, PageID.54), Plaintiff could ultimately recover far
less than the settlement amount. On ...