United States District Court, N.D. Alabama, Southern Division
MEMORANDUM OPINION 
H. ENGLAND, III UNITED STATES MAGISTRATE JUDGE
Patricia Fogg and Richard Boyle and Defendant Bruce McCormick
(who appears pro se) have jointly requested approval
of their settlement agreement (attached to this memorandum
opinion as Exhibit A), which represents the resolution of a
disputed matter under the Fair Labor Standards Act, 29 U.S.C.
§ 201, et seq.
(“FLSA”). (Doc. 46). For the reasons set forth
below, the court approves the parties' settlement.
April 29, 2016, Plaintiffs filed this action, alleging they
were deprived of overtime compensation and retaliated against
in violation of the FLSA by Defendants Bruce McCormick and
Over the Mountain Sedan, LLC. (Doc. 1). Specifically, the
plaintiffs contend (1) the defendants, both of whom they
alleged were employers under the FLSA, misclassified them as
independent contractors rather than employees and, as such,
they were not paid overtime despite working more than forty
hours per week; and (2) with respect to Boyle, that the
defendants retaliated against Boyle for informing them he
should be treated as an employee rather than an independent
contractor by terminating his employment. (See id).
On May 18, 2016, the plaintiffs amended their complaint,
alleging that Fogg's employment had since been terminated
in retaliation for filing the lawsuit. (Doc. 8). The
defendants answered both complaints. (Docs. 8 & 13).
Plaintiffs have dismissed their claims against Defendant Over
the Mountain Sedan, LLC, (docs. 44 & 45), leaving
McCormick as the lone remaining defendant. The parties have
engaged in written discovery, (see doc. 29 at ¶
2), and mediation, and reached a settlement on October 5,
2017. The terms of the settlement are contained in a document
submitted directly to the undersigned (the
“Agreement”), which is attached to this
memorandum opinion and made part of the record. (See
Exhibit A). The undersigned has reviewed the Agreement.
the Agreement, McCormick has agreed to pay Fogg and Boyle
$350.00 per month for a period of eighteen months, for a
total of $6, 300.00 due to each. (Exh. A at 9). McCormick has
also agreed to pay plaintiffs' counsel $9, 000.00, broken
down into $8, 600.00 in attorneys' fees and $400.00 in
costs. (Id. at 8-10). The parties stipulate and
agree the terms set forth in the Agreement constitute a fair
and reasonable resolution of a bona fide dispute.
(Id. at 10).
employee proves his employer violated the FLSA, 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.
Dep't of Labor, 679 F.2d 1350, 1352 (11th Cir.
1982)). “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).
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.
Lynn's Food Stores, Inc. v. United States, 679
F.2d 1350, 1355 (11th Cir. 1982), the Eleventh Circuit stated
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. The primary focus of a court's inquiry in
determining whether to approve an FLSA settlement is to
ensure that an employer does not take advantage of its
employees in settling their claim for wages and other damages
due under the statute. Collins v. Sanderson Farms,
Inc., 568 F.Supp. 714, 719 (E.D. La. 2008).
preliminary matter, the undersigned must deal with a
confidentiality provision contained in the agreement. The
provision states: “Plaintiffs understand that
confidentiality is a material inducement to this settlement.
Defendant McCormick acknowledges that the Court may strike
this provision.” (Exh. A at 10). Perhaps due to this
provision, the parties submitted the settlement agreement to
the chambers e-mail of the undersigned, rather than filing it
on the docket. “Absent some compelling reason, the
sealing from public scrutiny of FLSA agreements between
employees and employers would thwart the public's
independent interest in assuring that employees' wages
are fair and thus do not endanger ‘the national health
and well-being.'” Hogan v. Allstate Beverage
Co., 821 F.Supp.2d 1274, 1283 (M.D. Ala. 2011) (quoting
Brooklyn Savings Bank v. O'Neil, 324 U.S. 697,
708 (1945)). While an FLSA confidentiality provision is not
per se unenforceable, a party seeking to include one
must show compelling reasons why it should be upheld.
Briggins v. Elwood TRI, Inc., 3 F.Supp.3d 1277, 1280
(N.D. Ala. 2014). When offered the opportunity to justify the
inclusion of the provision, neither party offered such a
compelling reason, and the undersigned discerns no
justification consistent with the goals of the FLSA for the
confidentiality provision. Therefore, the confidentiality
provision is stricken.
to the remainder of the settlement agreement, the
parties' dispute as to the merits of the case is
legitimate. Specifically, Plaintiffs allege Defendant
violated the FLSA by classifying them as independent
contractors and failing to pay them overtime over a more than
two-year period, when each worked over forty hours per week
in some weeks; Defendant denies this. (Exh. A at 6-7). The
settlement is appropriate for the disputed overtime wages.
Plaintiffs have had the benefit of examining Defendant's
payroll records, internal correspondence, and schedules to
estimate the total number of overtime hours they worked
without receiving a time-and-a-half premium. (Exh. A at 6-8).
Plaintiffs state they have compromised their disputed claims
due to concerns about Defendant's financial posture and
ability to pay; conversely, Defendant (though denying
liability) states the settlement is in excess of what
Plaintiffs would receive if they were successful at trial, in
terms of both unpaid wages and liquidated damages. (Exh. A at
8). The parties also note the inherent risks of continued
litigation. (Id.). Due to these circumstances,
particularly Defendant's potential inability to pay a
judgment even if Plaintiffs were successful at trial, the
undersigned finds the compromise of Plaintiffs' claims is
the attorney's fee was agreed upon separately, without
regard to the amount paid to the plaintiff, then
‘unless the settlement does not appear reasonable on
its face or there is reason to believe that the plaintiffs
recovery was adversely affected by the amount of fees paid to
his attorney, the Court will approve the settlement without
separately considering the reasonableness of the fee to be
paid to plaintiffs counsel.'” Davis v. The
Filta Group, Inc., 2010 WL 3958701, *2 (M.D. Fla. Sept.
20, 2010) (quoting Bonetti v. Embarq Mgmt. Co., 2009
WL 2371407, *5 (M.D. Fla. Aug. 4, 2009)). The parties report
the matter of attorneys' fees was negotiated at arm's
length and was based on the work performed by Plaintiffs'
counsel and likely hourly rates awardable, and the
undersigned concludes Plaintiffs' recoveries were not
affected by the amount of the attorneys' fee. (Exh. A at
9). Therefore, the undersigned finds the attorneys' fees
court finds plaintiffs' FLSA claims represent a bona fide
dispute over FLSA provisions and the parties' settlement
is a fair and reasonable resolution of these bona fide
disputes. Therefore, the parties' second motion for
settlement approval, (doc. 46), is GRANTED,
and the settlement is APPROVED with the