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Padilla v. Redmont Properties, LLC

United States District Court, N.D. Alabama, Southern Division

November 30, 2018




         This opinion concerns a proposed FLSA settlement. Plaintiff Carlos Padilla brought this lawsuit against defendants Redmont Properties, LLC; Redmont Properties E.G., LLC; Redmont Properties of Homewood, LLC; RM Management, LLC; and Fred G. Nunnelly, III on behalf of himself and other similarly situated individuals. (Doc. 1). Mr. Padilla originally asserted a claim for violation of the Fair Labor Standards Act's overtime provision, 29 U.S.C. § 207(a)(1), against the defendants. (Doc. 1, p. 8). Mr. Padilla later amended his complaint to add claims for race discrimination under Title VII and 42 U.S.C. § 1981 and to add two similarly situated individuals, Jorge Ortiz and Demetrio Padilla, as plaintiffs. (Doc. 28-3).

         The parties have agreed to settle the plaintiffs' FLSA claims for unpaid overtime wages, and they have asked the Court to review the terms of the proposed settlement. (Doc. 32). The three settlement agreements are identical in their terms, except for the specific sums the defendants will pay to each plaintiff. For the reasons stated below, the Court approves the parties' proposed FLSA settlements because they are fair and reasonable compromises of a bona fide dispute.

         I. BACKGROUND

         The plaintiffs are residents of Birmingham who performed maintenance and repair work on residential properties owned and managed by the defendants in Jefferson County, Alabama. (Doc. 28-3, ¶¶ 12, 18-19; Doc. 11, ¶ 16). Carlos Padilla has worked on the defendants' properties since 2001. (Doc. 32-1, p. 8, ¶ 2). Jorge Ortiz and Demetrio Padilla have worked on the defendants' properties since 2002. (Doc. 32-2, p. 8, ¶ 2; Doc. 32-3, p. 8, ¶ 2). The plaintiffs allege that they regularly spent more than 40 hours each week painting and performing maintenance for the defendants. (Doc. 28-3, ¶¶ 12, 20). Carlos Padilla contends that, during the years 2016 and 2017, he often worked more than double the standard forty-hour workweek maintaining the defendants' properties. (Doc. 28-3, ¶¶ 28-29). Although the defendants were aware that the plaintiffs routinely worked more than 40 hours per week, the defendants did not compensate the plaintiffs at the required time-and-a-half rate for overtime hours. (Doc. 28-3, ¶¶ 22-25).

         The defendants argue that they have no obligation to the plaintiffs under the FLSA because the plaintiffs are independent contractors who are exempt from the FLSA's wage requirements. (Doc. 11, ¶¶ 17, 19; Doc. 32, ¶ 4). The defendants also contest the numbers of hours that the plaintiffs contend they worked during 2016 and 2017. (Doc. 32, ¶ 4).

         With the assistance of a mediator, the parties negotiated a settlement of the plaintiffs' FLSA claims. (Doc. 32, ¶ 2). In exchange for dismissal of the FSLA claims with prejudice, the defendants have agreed to settle each FLSA claim as follows: Carlos Padilla will receive $65, 660.78 (Doc. 32-1, p. 1); Jorge Ortiz will receive $60, 911.85 (Doc. 32-2, p. 1); and Demetrio Padilla will receive $9, 956.59 (Doc. 32-3, p. 1). Additionally, defendants will pay a total attorney's fee of $8, 000.00. (Doc. 32-1, p. 2; Doc. 32-2, p. 2; Doc. 32-3, p. 2).

         On this record, the Court considers the parties' motion to approve the proposed settlement of the plaintiff' FLSA claims.


         “Congress enacted the FLSA in 1938 with the goal of [protecting] 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 1½ times the employees' regular wages.” Christopher v. SmithKline Beecham Corp., 567 U.S. 142, 147 (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) (quoting Overnight Motor Trans. Co. v. Missel, 316 U.S. 572, 578 (1942)). 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 Savs. Bank v. O'Neil, 324 U.S. 697, 706 (1945)).

         If an employee proves that her 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. 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).

         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 1352; 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 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 the settlement. Lynn's Food, 679 F.2d at 1354; see also Silva, 307 Fed.Appx. at 351 (emphasizing that a proposed settlement must be fair and reasonable).

         The Court finds that there is a bona fide dispute in this matter that supports the parties' proposed FLSA settlement. The plaintiffs maintain that the defendants failed to compensate them as required by the FLSA. (Doc. 28-3, p. 4). The defendants contend that they had no obligation to the plaintiffs under the FLSA because the plaintiffs were independent contractors, not employees. (Doc. 24, ¶ 19). This bona fide dispute supports the parties' proposed settlement.

         The Court finds that the method used to calculate the plaintiffs' disputed wages is fair and reasonable. The settlement proceeds of $65, 660.78 for Carlos Padilla, $60, 911.85 for Jorge Ortiz, and $9, 956.69 for Demetrio Padilla represent a fair and reasonable compromise based on the existing evidence regarding unpaid wages. (Doc. 32-1, p. 1; Doc. 32-2, p. 1; Doc. 32-3, p.1). The plaintiffs, in signed declarations, state that they reviewed their existing time records with the assistance of plaintiff s counsel before agreeing to these settlements. (Doc. 32-1, p. 8, ¶ 5; Doc. 32-2, p. 8, ¶ 6; Doc. 32-3, p. 8, ¶ 6). Based on a review of their time records, the plaintiffs stipulate that the sums to be paid under the settlement agreements represent “100% of their claimed and disputed ...

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