United States District Court, N.D. Alabama, Northeastern Division
MADELINE HUGHES HAIKALA UNITED STATES DISTRICT JUDGE
opinion concerns a proposed FLSA settlement. In her
complaint, plaintiff Lakeshia Sheppard contends that her
former employer, defendant NPC International, Inc., violated
the Fair Labor Standards Act (FLSA), 29 U.S.C. §§
201 et seq. (Doc. 1, pp. 11-13). The parties have
agreed to settle Ms. Sheppard's FLSA claims, and they
have asked the Court to approve the proposed settlement.
(Doc. 19). The Court will approve the FLSA settlement
because the settlement is a fair and reasonable compromise of
a bona fide dispute.
Sheppard filed this lawsuit on June 16, 2016. (Doc. 1, p.
In her complaint, Ms. Sheppard states that she worked for NPC
as an hourly employee at NPC's Pizza Hut restaurant
located in Moulton, Alabama. (Doc. 1, p. 12, ¶¶
11-12). Ms. Sheppard alleges that NPC did not pay her minimum
wages or overtime wages for all of the hours that she worked.
(Doc. 1, p. 12, ¶¶ 13-18). According to Ms.
Sheppard, NPC “willfully and intentionally failed
and/or refused to pay [her] for hours worked and overtime
rates” pursuant to its obligations under the FLSA.
(Doc. 1, p. 12, ¶ 19). NPC disputes that it violated the
FLSA and denies Ms. Sheppard's allegations that it
willfully and intentionally failed to pay her minimum wages
and overtime wages. (Doc. 7, ¶¶ 1, 13-19).
parties engaged in settlement discussions to resolve this
dispute. (Doc. 19-1, p. 2). In exchange for dismissal of this
action with prejudice, NPC agreed to pay Ms. Sheppard a gross
sum of $1, 200.00. (Doc. 19-1, p. 4; see Doc. 19-2,
p. 1). The $1, 200.00 consists of $600.00 in claimed back
wages and $600.00 in liquidated damages. (Doc. 19-2, p. 1).
NPC also has agreed to pay $1, 800.00 in attorneys' fees
and costs. (Doc. 19-2, pp. 1-2). Ms. Sheppard has agreed to
release all FLSA claims she might have against NPC, including
all claims Ms. Sheppard has asserted against NPC in this
lawsuit. (Doc. 19-2, p. 2). Ms. Sheppard also has agreed to
release any claims she might have against NPC concerning the
final year of her employment with NPC or the end of her
employment with NPC. (Doc. 19-2, p. 2). As part of the
settlement agreement, Ms. Sheppard will not seek future
employment with NPC. (Doc. 19-2, p. 3). The parties represent
that they believe that their proposed settlement resolves a
bona fide dispute and avoids the cost and time associated
with litigating the issues of liability, liquidated damages,
willfulness, fees, and expenses. (Doc. 19-1, p. 7).
record, the Court considers the parties' motion to
approve the proposed settlement of Ms. Sheppard's FLSA
claims. (Doc. 19).
enacted the FLSA in 1938 with the goal of ‘protect[ing]
all covered workers from substandard wages and oppressive
working hours.'” 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) (alteration in Christopher)).
In addition to mandating a minimum wage, “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.” Id. (citing 29
U.S.C. § 207(a); see also 29 U.S.C. §
206(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)).
employee proves that her 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, reasonable attorneys' fees, 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, 324 U.S. at 707.
“Any amount due that is not in dispute must be paid
unequivocally; employers may not extract valuable concessions
in return for payment that is indisputably owed under the
FLSA.” Hogan v. Allstate Beverage Co., Inc.,
821 F.Supp.2d 1274, 1282 (M.D. Ala. 2011).
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
also should 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).
on the Court's review of the information that the parties
submitted regarding the terms of the proposed settlement
agreement (Doc. 19-1; Doc. 19-2) and the information that
counsel provided to the Court during the April 25, 2017
telephone conference, the Court finds that there is a bona
fide dispute between the parties, and the settlement terms
that the parties have negotiated are fair and reasonable.
(See Doc. 19-1; Doc. 19-2). The parties agreed to
settle Ms. Sheppard's claims in exchange for an amount in
excess of the damages that Ms. Sheppard claims. (Doc. 19-1,
p. 3). During the relevant period, Ms. Shephard worked 46.6
weeks. She claims that she worked an average of 40 minutes
off the clock each week, including an average of ten minutes
of overtime per week. (Doc. 19-1, p. 3). Therefore, Ms.
Sheppard claims that she is entitled to $505.62 in wages and
liquidated damages. (Doc. 19-1, p. 4). The settlement amount
of $1, 200.00 provides full recovery to Ms. Sheppard with the
remainder as consideration for Ms. Sheppard's agreement
to release all employment-related claims concerning her final
year of employment with NPC or the conclusion of her
employment with NPC. (Doc. 19-1, p. 4).
the Court would not be inclined to approve the broad release
language that the parties propose in paragraph 5(iii) of the
settlement agreement because such a release typically is
ill-suited to an FLSA settlement. Hogan, 821
F.Supp.2d at 1284 (stating that pervasive release language in
an FLSA settlement is “overbroad and unfair” and
should be “closely examined”). So too is the
language in paragraph 8, which ordinarily would constitute an
impermissible side deal regarding Ms. Sheppard's future
employment. Id. at 1282; see also Parker v.
Encore Rehabilitation, Inc., 2012 WL 6680311, *5-6 (S.D.
Ala. Dec. 21, 2012). Given the very unique circumstances of
this case, which counsel explained during the April 25, 2017
telephone conference, the Court approves the terms this FLSA
settlement. The Court finds that the terms of the
settlement are a fair and reasonable resolution of Ms.
Court also approves the negotiated attorneys' fee amount
of $1, 800.00. The $1, 800.00 consists of $750.00 in claimed
costs and $1, 050.00 in claimed attorneys' fees. (Doc.
19-2, pp. 1-2). The “FLSA requires judicial review of
the reasonableness of counsel's legal fees to assure both
that counsel is compensated adequately and that no conflict
of interest taints the amount the wronged employee recovers
under a settlement agreement.” Silva, 307
Fed.Appx. at 351 (citing Lynn's Food, 679 F.2d
at 1352); see also Briggins v. Elwood TRI, Inc., 3
F.Supp.3d 1277, 1291 (N.D. Ala. 2014) (noting that even where
payment of attorneys' fees does not reduce the
compensation negotiated for and payable to an FLSA plaintiff,
“the court is required to review for fairness and
approve the fee and expenses proposed to be paid by the
defendants in the settlement”) (citing Silva,
307 Fed.Appx. at 349). Based upon the information that Ms.
Sheppard's counsel provided during the telephone
conference on April 25, 2017, the Court finds that the fee
amount included in the settlement agreement adequately
compensates counsel for the time invested in the
action In addition, the negotiated fee does not
compromise Ms. Sheppard's recovery. Rather, the fee is
“separate and distinct from the settlement
agreement.” Briggins, 3 F.Supp.3d at 1291. The
Court finds the fee to be fair and reasonable.