United States District Court, S.D. Alabama, Southern Division
WILLIAM H. STEELE UNITED STATES DISTRICT JUDGE
FLSA action continues to be before the Court on the
parties' joint motion to approve settlement. (Doc. 52).
In its first order on the motion, (Doc. 55), the Court
required the parties to address a number of aspects of the
settlement the Court found problematic. The parties ably
responded. (Doc. 56). In its second order, the Court granted
conditional certification to a class as described therein and
appointed a settlement administrator. (Doc. 57 at 2, 9). The
Court declined to consider final settlement before potential
opt-in plaintiffs receive notice and an opportunity both to
opt in and to object to the proposed terms of the settlement.
(Id. at 2-4). The Court declined to preliminarily
approve the settlement agreement for two reasons: (1) it
provided for complete payment of attorney's fees well
before the completion of counsel's duties; and (2) it
provided for release of all wage and compensation claims
arising under local, state or federal law without any
mechanism for receiving advice of counsel. (Id. at
6-9). The Court ordered the parties to address the
attorney's fees and release issues and to submit a
revised settlement agreement, notice and consent to join
form. (Id. at 13).
revised settlement agreement adjusts the timing of the
payment of attorney's fees in accordance with the
Court's order. (Doc. 62-1 at 12). The revised notice
advises potential opt-in plaintiffs of their right to object
to the proposed settlement, also in accordance with the
Court's order. (Doc. 62-2 at 1, 3). Left for
consideration is the matter of releases.
revised settlement agreement is inconsistent in its
description of the scope of the release. Newly inserted
language limits the release to “wage and hour claims
that arise from the facts pled in the Complaint, ”
while the original language - which remains in the revised
settlement agreement - narrows the release to “wage and
compensation claims … pled in the operative
Complaint.” (Doc. 62-1 at 14). The language of the
amended notice likewise confines the universe of released
claims to those actually pleaded in the complaint. (Doc. 62-2
at 4). Moreover, the proposed order approving settlement
provides that the opt-in plaintiffs “will release only
FLSA claims for unpaid wages.” (Doc. 56-1 at 2).
Despite these mixed signals, it appears from the parties'
brief that their intent is the more expansive, “arise
from the facts pled” formulation, (Doc. 62 at 2-3), and
the Court proceeds with that understanding.
courts addressing the issue have concluded that expansive
releases are problematic in the FLSA context, due to the risk
an employer will extract a release of potentially valuable
claims in exchange for nothing more than paying the plaintiff
what it is already unconditionally required by the FLSA to
pay (or some lesser amount reflecting the uncertainty of
recovery). E.g., Moreno v. Regions Bank, 729
F.Supp.2d 1346, 1351 (M.D. Fla. 2010). While some courts
refuse to permit such a release, e.g., Id. at 1352,
this Court is willing to accept an expansive release so long
as the releasing plaintiffs understand what they are
releasing and the risks involved, supported by advice of
counsel. Luker v. Wilcox Hospital Board, 2014 WL
3518386 at *5 (S.D. Ala. 2014); Crabtree v. Volkert,
2013 WL 593500 at *5-6 (S.D. Ala. 2013). The Court so
informed the parties in its second order. (Doc. 57 at 8).
parties argue there is no basis for heightened scrutiny of a
release that, as here, extends beyond pleaded claims but does
not extend to claims unrelated to wages and compensation.
Even if there is such a basis in general, they continue,
there is no such basis in this case, because the released
claims “logically have no value” beyond that of
the FLSA claims asserted and compromised. (Doc. 62 at 3-7).
the former argument, the Court concludes that the same
“something for nothing” concern animating
judicial aversion to global releases remains present, albeit
attenuated, in the context of more limited releases.
Colon v. Garda CL Southeast, Inc., 2015 WL 13812275
at *1 n.1 (M.D. Fla. 2015). The parties cite, and the Court
has reviewed, cases that permit releases of unpleaded state
and federal wage and compensation claims without further
analysis, but none that provides a satisfactory rationale for
exempting such releases from judicial scrutiny.
the latter argument, the parties present a good description
of possible wage and compensation causes of action in the
four states covered by this lawsuit. Even the general
improbability of a valuable released claim, however, is
inadequate to demonstrate that none of the approximately one
thousand potential opt-in plaintiffs - any of whom might
assert unusual circumstances such as a side agreement with
the defendants - has such a claim.
noted, the Court will approve a release of unpleaded claims
when it is shown that the releasing plaintiff was assisted by
counsel. The parties are amenable to such a procedure. (Doc.
62 at 7). The release provision therefore is preliminarily
approved, subject to a demonstration before final approval
that all opt-in plaintiffs seeking advice of counsel
regarding the release provision have received it.
Court is now in a position to resolve the joint motion to
approve settlement. For reasons set forth above and in
previous orders, the motion is granted to
the extent it seeks preliminary approval of the proposed
settlement (including service awards and attorney's fees
and costs) and is denied to the extent it
seeks final approval, without prejudice to the parties'
ability to seek final approval following closure of the
opt-in and objection period.
additional relief sought by the joint motion, (Doc. 52 at 2),
is also granted. This action is
administratively stayed pending final
approval of the settlement and completion of the procedures
and payments described in the revised settlement agreement.
Assuming final settlement approval, the Court will retain
jurisdiction over this action during the settlement process
outlined in the revised settlement agreement, with the
parties to file a joint motion for dismissal with prejudice
within 14 days of completion of the settlement process. Other
than as stated in that agreement, the parties are responsible
for their own attorneys' fees and costs.
revised notice does not fully reflect the Court's rulings
and so must be modified accordingly. Other tweaks are
designed to clarify the notice and correct errors therein.
Before sending out the notice, the parties are
ordered to modify it as follows:
• On page 1, change “you will preserve any rights
you have under the terms of the settlement” to
“you will preserve any rights ...