United States District Court, S.D. Alabama, Southern Division
ORDER APPROVING SETTLEMENT AGREEMENT
K. DuBOSE, CHIEF UNITED STATES DISTRICT JUDGE.
action is before the Court on the parties' Joint Motion
to Approve of Settlement Agreement (doc. 23). Upon
consideration, and for the reasons set forth herein, the
Joint Motion is GRANTED, and the settlement is APPROVED.
Andre Buchanan was employed at Bahama Bob's Beachside
Café at Gulf Shores, Alabama as a dishwasher and
busser. In late September 2016, he filed this action against
Defendants Bahama Bob's Beachside Café, Inc.,
Stephen W. Spellman, Jr., Frank B. Merrill, Jr., and Robert
L. Murphy for violations of the Fair Labor Standards Act, 29
U.S.C. § 201, et seq., (FLSA) (doc. 1).
Plaintiff alleges that he was a “non-exempt”,
hourly employee and was paid $8.00 per hour from July 14,
2015 through June 8, 2016 and $9.00 per hour from June 9,
2016 through September 10, 2016. Plaintiff alleges that when
he worked more than forty hours per week, he was paid his
regular hourly rate of pay plus $1.00, instead of the one and
one-half times his regular hourly rate required by the FLSA.
Plaintiff brings two counts against the Defendants: Count I
for failure to pay the required hourly minimum wage and Count
II for failure to pay overtime compensation. See 29
U.S.C. § 206, § 207. Plaintiff seeks his unpaid
compensation, liquidated damages, attorney's fees, costs
and other compensation.
admit that Bahama Bob's Beachside Café, Inc.
employed Plaintiff for the time period alleged, that he was a
non-exempt employee, and that they are incorporators or
officers of the corporation (doc. 4). Defendants also admit
that this Court has jurisdiction. However, they deny the
majority of the remaining allegations regarding the FLSA
claims, including any claim that they acted willfully within
the meaning of 29 U.S.C. § 216(b). They also set forth
eleven affirmative defenses, including the defense that
Defendants were acting in good faith and had reasonable
grounds to believe that their actions did not violate the
parties engaged in discovery as required by the Court's
Preliminary Scheduling Order for FLSA Cases (doc. 6).
Plaintiff answered the Court's interrogatories (doc. 10).
Defendants provided the Verified Summary of the hours
Plaintiff worked and his pay and documents in support (doc.
18, 19). Plaintiff and counsel discussed his overtime claim
and formulated proposed settlement figures (doc. 23). The
parties engaged in settlement negotiations based on their
respective independent calculations and analysis. They
participated in a settlement conference on January 31, 2017
and reached a resolution of Plaintiff's claims (do. 21).
parties then filed the Joint Motion wherein they set forth
the terms of the Settlement and move the Court to approve the
Settlement Agreement (doc. 23). The parties did not file a
separate written settlement agreement.
reaching their decision to settle, the parties recognized
that there would be additional expense in time and money
should the litigation continue and that they would face the
uncertainty and risks of litigation, including the risk that
Plaintiff may not recover and the risk of a verdict on the
merits against the Defendants. They also acknowledged the
difficulties and delays inherent in litigation. Therefore,
settlement was a mutually appealing resolution (doc. 23).
assert that because of these risks, and because both parties
negotiated the Settlement Agreement in good faith and at
arms-length while represented by competent and experienced
counsel, the settlement is mutually satisfactory and a fair
and reasonable resolution of a bona fide dispute under the
FLSA. In support, Plaintiff states that he is satisfied that
he will be reasonably compensated. Further, Plaintiff's
counsel represents that Plaintiff understands the Agreement,
has consulted with counsel as to the terms, and knowingly and
voluntarily entered into the Agreement.
In Lynn's Food Stores, the Court of Appeals for
the Eleventh Circuit recognized that [t]here are only two
ways in which back wage claims arising under the FLSA can be
settled or compromised by employees. First, under section
216(c), the Secretary of Labor is authorized to supervise
payment to employees of unpaid wages owed to them. . . .
The only other route for compromise of FLSA claims is
provided in the context of suits brought directly by
employees against their employer under section 216(b) to
recover back wages for FLSA violations. When employees bring
a private 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.
679 F.2d 1350, 1352-1353 (11th Cir. 1982); (footnotes
Eleventh Circuit further explained that
[o]ther than a section 216(c) payment supervised by the
Department of Labor, there is only one context in which
compromises of FLSA back wage or liquidated damage claims may
be allowed: a stipulated judgment entered by a court which
has determined that a settlement proposed by an employer and
employees, in a suit brought by the employees under the FLSA,
is a fair and reasonable resolution of a bona fide dispute
over FLSA provisions.
679 F.2d at 1355.
pursuant to the FLSA, the Court must determine whether the
settlement is a “fair and reasonable resolution of a
bona fide dispute” of FLSA provisions, and if so,
approve the parties' Settlement Agreement. 679 F.2d at
1355; Silva v. Miller, 307 Fed.Appx. 349, 351 (11th
Cir. 2009); Stalnaker v. Novar Corp., 293 F.Supp.2d
1260, 1263 (N.D. Ala. 2003). If the Plaintiff has compromised
his FLSA dispute on issues of coverage or the amount due for
back wages, he may do so only with the Court's approval
of the Settlement Agreement. The rationale is that
[s]ettlements may be permissible in the context of a suit
brought by employees under the FLSA for back wages because
initiation of the action by the employees provides some
assurance of an adversarial context. The employees are likely
to be represented by an attorney who can protect their rights
under the statute. Thus, when the parties submit a settlement
to the court for approval, the settlement is more likely to
reflect a reasonable compromise of disputed issues than a
mere waiver of statutory rights brought about by an
employer's overreaching. If a settlement in an employee
FLSA suit does reflect a reasonable compromise over issues,
such as FLSA coverage or computation of ...