United States District Court, N.D. Alabama, Southern Division
SONIA ARANDA, individually and on behalf of all others similarly situated, Plaintiff,
R.E.D.A., INC. et al, Defendants.
MADELINE HUGHES HAIKALA UNITED STATES DISTRICT JUDGE
Aranda brought this action against her former employer and
its owners to recover overtime wages allegedly due under the
Fair Labor Standards Act, 29 U.S.C. § 201 et
seq. (Doc. 1). The Court stayed proceedings at the
parties' request to allow the parties to discuss
settlement. (Doc. 11). The parties have proposed a settlement
agreement for this Court to approve pursuant to
Lynn's Food Stores, Inc. v. United States, 679
F.2d 1350 (11th Cir.1982). (Docs. 13, 13-1). As discussed in
greater detail below, because the parties' agreement
represents a fair and reasonable resolution of a bona fide
dispute under the FLSA, the Court approves the parties'
Rick and Fatema Zuaiter are the owners of defendants
R.E.D.A., Inc. and Demaz Inc., through which Mr. and Ms.
Zuaiter own and operate an IHOP restaurant in Hoover, Alabama
and an IHOP restaurant in Pelham, Alabama. (Doc. 1, p. 4,
¶ 12; Doc. 1-1, pp. 1-2, ¶¶ 3-4). Ms. Aranda
worked as a line cook at Mr. and Ms. Zuaiter's IHOP
restaurants in Hoover and Pelham from January 2014 through
January 2017. (Doc. 1, p. 2, ¶¶ 3-4; Doc. 1-1, pp.
1-2, ¶ 3). Ms. Aranda alleges that during this time
period, Mr. and Ms. Zuaiter did not pay her at the overtime
rate for hours which exceeded forty per week. (Doc. 1, pp.
5-7, ¶¶ 17-20; Doc. 1-1, p. 3, ¶ 7). Ms. Arana
alleges that Mr. and Ms. Zuaiter devised a documented scheme
in which the owners would pay her at her regular wage for
overtime hours worked. (Doc. 1, p. 6, ¶ 19).
defendants dispute Ms. Aranda's allegations. The
defendants challenge the hours Ms. Aranda claims she worked,
the theory that R.E.D.A., Inc. and Demaz Inc. were joint
employers of Ms. Aranda, the extent to which Mr. and Ms.
Zuaiter are proper defendants, and the degree to which the
defendants complied with the FLSA. (Doc. 13, pp. 3, 6).
resolve her FLSA claims against the defendants, Ms. Aranda
has agreed to dismiss her claims in exchange for the
defendants' payment of $4, 890.16 in unpaid overtime
wages and liquidated damages. (Doc. 13-1, p. 3, ¶ 2).
This amount represents “100% of her claimed and
disputed unpaid overtime wages over the three year period
prior to the date she filed her Complaint plus an additional
equal amount for claimed liquidated damages.” (Doc. 13,
pp. 2-3, ¶ 4). The defendants have also agreed to pay
counsel for Ms. Aranda $12, 313.25 in attorney's fees and
costs. (Doc. 13-1, p. 3, ¶ 2). This amount “not
only equals 100% of the fees and costs incurred by Plaintiff
to date, but also includes an additional amount of projected
fees and costs to complete the settlement process.”
(Doc. 13, p. 3, ¶ 4 (citing Doc. 13-1, pp. 3, 5,
¶¶ 2, 11)). Payment is due within fourteen days of
the finalization of the settlement agreement and Ms.
Aranda's delivery of certain tax documents to counsel for
the defendants. (Doc. 13-1, p. 4, ¶ 4).
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., 567 U.S. 142, 147 (2012) (quoting
Barrentine v. Arkansas-Best Freight Sys., Inc., 450
U.S. 728, 739 (1981) (noting that 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”) (emphasis in original) (alterations and
quotation marks omitted)); see also 29 U.S.C. §
202(a) (indicating congressional intent to eliminate labor
conditions “detrimental to the maintenance of the minim
standard of living necessary for health, efficiency, and
general well-being of workers”). In the context of
overtime, for example, 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. 29
U.S.C. § 207(a).
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, 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 Savs. 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 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 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
there is a bona fide dispute concerning, among other things,
the nature of the reduction in Ms. Aranda's overtime wage
and the extent to which the defendants willfully violated the
FLSA such that a three-year statute of limitations would
apply in this case. Ms. Aranda has calculated that the
defendants owe her $4, 890.16 in unpaid overtime wages and
liquidated damages for the period from January 2014 to
January 2017. (Doc. 13-1, pp. 8-9, ¶¶ 4-6). The
defendants have agreed to pay this amount in full. (Doc. 13,
pp. 2-3, ¶ 4). Accordingly, the settlement amount
represents a fair and reasonable settlement of Ms.
defendants have agreed separately to pay Ms. Aranda's
attorney's fees and costs of $12, 313.25. (Doc. 13-1, p.
3, ¶ 2). The Court reviews “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).
Although the attorney's fees and costs exceed Ms.
Aranda's settlement proceeds, Ms. Aranda received her
entire disputed amount plus an equal amount in liquidated
damages. (Doc. 13, pp. 2-3, ¶ 4). The defendants have
stipulated that the fee amount is reasonable. (Doc. 13, p. 3,
¶ 4). Under these circumstances, the Court finds that
the attorney's fees and costs are fair, reasonable, and
independent of Ms. Aranda's settlement amount.
ensure that the defendants are not using an FLSA claim
“to leverage a release from liability unconnected to
the FLSA[, ]” the Court has reviewed the release
provision in the settlement agreement. Moreno v. Regions
Bank, 729 F.Supp.2d 1346, 1351 (M.D. Fla. 2010); see
also Hogan, 821 F.Supp.2d at 1282 (stating that an
employer may not require valuable concessions for wages due
under the FLSA). Under the release provision, Ms. Aranda
waive, release, and forever resolve all claims, demands or
causes of action against Defendants, known or unknown, which
Plaintiff ever had, now has or which Plaintiff's heirs,
executors, administrators, successors or assigns may have
prior to the date this Agreement is signed by Plaintiff, due
to any claim arising under the FLSA, including but not
limited to: (a) those arising from, relating to, or in
connection with any acts or omissions related to any matter
at any time prior to and including the date of
Plaintiff's execution of this Agreement, and (b) those as
stated in or arising out of ...