United States District Court, N.D. Alabama, Southern Division
MADELINE HUGHES HAIKALA, District Judge.
Plaintiff Thomas Brian Jordan worked for defendant Helix Systems, Inc. in the field of information technology. Mr. Jordan filed this lawsuit on May 30, 2014, claiming that Helix failed to pay him overtime in violation of the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq. The parties have agreed to settle Mr. Jordan's FLSA claims, and they have asked the Court to review the terms of the proposed settlement. The Court approves the settlement because it is a fair and reasonable compromise of a bona fide dispute.
I. Factual and Procedural Background
Mr. Jordan alleges that Helix violated the FLSA by failing to pay him overtime. (Doc. 1). Mr. Jordan claims that Helix did not pay him an overtime premium for hours worked in excess of 40 hours while he worked in the position of I.T. Support. (Doc. 1, ¶ 9). Additionally, Mr. Jordan asserts that while he worked as I.T. Manager, Helix misclassified him under 29 U.S.C. § 213(a)(17), a provision of the FLSA that exempts certain computer employees from the overtime provisions of the FLSA. (Doc. 1, ¶ 46).
Helix filed its answer to Mr. Jordan's complaint on July 16, 2014. (Doc. 8). In its answer, Helix denied Mr. Jordan's claims and asserted that it properly classified Mr. Jordan as an exempt employee under § 213(a)(17). (Doc. 8).
After engaging in settlement discussions and negotiations, the parties filed a joint motion for court approval of their proposed FLSA settlement. (Doc. 11). The settlement provides that Helix will pay Mr. Jordan $20, 358.00. (Doc. 11-1, ¶ 2). That amount consists of $7, 250, minus tax withholdings, for claimed and disputed unpaid overtime wages; $7, 250 for claimed and disputed liquidated damages; and $5, 858 for claimed attorney's fees and costs. (Doc. 11-1, ¶ 2).
A. The Fair Labor Standards Act
"Congress enacted the FLSA in 1938 with the goal of protect[ing] all covered workers from substandard wages and oppressive working hours.' Among other requirements, the FLSA obligates employers to compensate employees for hours in excess of 40 per week at a rate of 1 ½ times the employees' regular wages." Christopher v. SmithKline Beecham Corp., 132 S.Ct. 2156, 2162 (2012) (quoting Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 739 (1981)); see also 29 U.S.C. §§ 202, 207(a). Congress designed the FLSA "to ensure that each employee covered by the Act would receive [a] fair day's pay for a fair day's work' and would be protected from the evil of overwork' as well as underpay.'" Barrentine, 450 U.S. at 739 (emphasis in original). In doing so, Congress sought to protect "the public's independent interest in assuring that employees' wages are fair and thus do not endanger the national health and well-being.'" Stalnaker v. Novar Corp., 293 F.Supp.2d 1260, 1264 (M.D. Ala. 2003) (quoting Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697, 706 (1945)).
If an employee proves that his employer violated the FLSA, then the employer must remit to the employee all unpaid wages or compensation, liquidated damages in an amount equal to the unpaid wages, a reasonable attorney's fee, and costs. 29 U.S.C. § 216(b). "FLSA provisions are mandatory; the provisions are not subject to negotiation or bargaining between employer and employee.'" Silva v. Miller, 307 Fed.Appx. 349, 351 (11th Cir. 2009) (quoting Lynn's Food Stores, Inc. v. U.S. ex. Rel. U.S. Dep't of Labor, 679 F.2d 1350, 1352 (11th Cir. 1982)); see also Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697, 707 (1945). "Any amount due that is not in dispute must be paid unequivocally; employers may not extract valuable concessions in return for payment that is indisputedly owed under the FLSA." Hogan v. Allstate Beverage Co., Inc., 821 F.Supp.2d 1274, 1282 (M.D. Ala. 2011).
Consequently, parties may settle an FLSA claim for unpaid wages only if there is a bona fide dispute relating to a material issue concerning the claim. To compromise a claim for unpaid wages, the parties must "present to the district court a proposed settlement, [and] the district court may enter a stipulated judgment after scrutinizing the settlement for fairness." Lynn's Food, 679 F.2d at 1353; see also Hogan, 821 F.Supp.2d at 1281-82. "[T]he parties requesting review of an FLSA compromise must provide enough information for the court to examine the bona fides of the dispute." Dees v. Hydradry, Inc., 706 F.Supp.2d 1227, 1241 (M.D. Fla. 2010). The information that the parties provide should also enable the Court "to ensure that employees have received all uncontested wages due and that they have received a fair deal regarding any additional amount that remains in controversy." Hogan, 821 F.Supp.2d at 1282. "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, " then a court may approve a settlement. Lynn's Food, 679 F.2d at 1354; see also Silva, 307 Fed.Appx. at 351 (proposed settlement must be fair and reasonable).
B. The Settlement Agreement is a Fair and Reasonable Resolution of a Bona Fide Dispute.
The parties' settlement represents the resolution of a bona fide dispute between the parties. The parties disagree about whether Mr. Jordan was exempt from overtime payments under the FLSA's ...