United States District Court, W.D. Arkansas, Fort Smith Division
MARK JORDAN and BRANDON WATKINS, each individually and on behalf of all others similarly situated PLAINTIFFS
RHD, JR., INC., d/b/a MAYFLOWER RV SALES & SERVICE; and ROBERT H. DUDLEY, JR. DEFENDANTS
OPINION AND ORDER
HOLMES, III CHIEF U.S. DISTRICT JUDGE.
the Court is the parties' joint motion (Doc. 38) to
approve their settlement agreement and dismiss, filed
pursuant to Federal Rule of Civil Procedure 41(a)(2).
Additionally, the parties submitted for in camera review a
brief in support of the motion (Doc. 39), the proposed
settlement agreement (Doc. 39-2), damages calculations by
both parties (Docs. 39-1, 39-5), an invoice for work
performed by Plaintiffs' counsel (Doc. 39-3), and an
affidavit of attorney Josh Sanford (Doc. 39-4). The Court has
reviewed the joint motion, the proposed settlement agreement,
and the additional documents submitted for in camera review,
and will now approve the settlement agreement and grant the
motion to dismiss.
filed this lawsuit on September 12, 2016, claiming that
Defendants failed to pay minimum or overtime wages in
violation of the Fair Labor Standards Act
(“FLSA”), 29 U.S.C. §§ 207 and 216(b),
and the Arkansas Minimum Wage Act (“AMWA”),
A.C.A. § 11-4-211. On February 17, 2017, the Court
conditionally certified the case as a collective action
pursuant to 29 U.S.C. § 216(b) and authorized notice to
be sent to potential opt-in plaintiffs. (Doc. 23). The matter
is currently set for trial the week of August 14, 2017.
is unclear in the Eighth Circuit as to whether judicial
approval of a proposed private release of FLSA claims is in
all cases required before dismissal. See King v. Raineri
Constr., LLC, 2015 WL 631253, *1 (E.D. Mo. Feb. 12,
2015) (collecting cases). However, it is clear that there are
only two ways in which wage claims under the FLSA can be
waived: first, the Secretary of Labor is authorized to
supervise payment to employees of unpaid wages owed to them,
and second, when (as here) an employee brings a private
action for back wages under the FLSA, the Court may enter a
stipulated judgment after scrutinizing the settlement for
fairness. 29 U.S.C. § 216(c); Beauford v.
ActionLink, 781 F.3d 396, 405 (8th Cir. 2015);
Copeland v. ABB, Inc. 521 F.3d 1010, 1014 (8th Cir.
2008). The parties here do not propose a stipulated
judgement, but they have set out in their settlement
agreement the amounts due to each opt-in Plaintiff for unpaid
wages and amount of liquidated damages agreed upon. The
parties have also agreed as to the amount of attorneys'
fees that Defendants will pay Plaintiffs' counsel. The
parties have agreed that Plaintiffs will voluntarily waive
all claims for compensation, including FLSA claims.
district court may only approve a settlement agreement and
enter a stipulated judgment that includes a waiver of FLSA
claims after it determines that the litigation involves a
bona fide dispute and that the proposed settlement is fair
and equitable to all parties. Lynn's Food Stores,
Inc. v. United States, 769 F.3d 1350, 1353 n.8 (11th
Cir. 1982). Because the complaint displays a bona fide
dispute exists as to whether Plaintiffs are entitled to a
minimum wage and overtime for their work as mechanics for
Defendants, the Court must evaluate whether the settlement is
fair. In determining whether a settlement is fair and
reasonable under the FLSA, factors this Court considers are
the stage of the litigation and the amount of discovery
exchanged, the experience of counsel, the probability of
success on the merits, any “overreaching” by the
employer in the settlement negotiations, and whether the
settlement was the product of arm's length negotiations
between the parties based on the merits of the case.
Carrillo v. Dandan Inc., 51 F.Supp.3d 124, 132-33
(D. D.C. 2014) (taking into account the “totality of
the circumstances” to determine the fairness of an FLSA
reviewing these factors in relation to the joint motion and
settlement agreement, the Court finds that the parties'
agreement is fair and reasonable. At this late stage in the
litigation, the parties have engaged in extensive document
and deposition discovery. Both Plaintiff and defense counsel
have substantial experience in this field and have appeared
before this Court for FLSA and AMWA claims on numerous
occasions. While defense counsel plans to present
evidence at trial that Plaintiffs were exempt from coverage
as mechanics engaged primarily in servicing automobiles or as
outside sales employees, as well as evidence that could limit
the damages potential, the agreed upon settlement amounts
show that the parties agree Plaintiffs are likely to be
successful on the merits. Plaintiffs have provided the Court
with substantial documentation as to how they calculated
their damages, and the settlement agreement allows for the
recovery of more than 95% of each Plaintiff's claim for
unpaid wages, including liquidated damages. Based on the high
yield of recovery when compared to the damages calculation
for each Plaintiff, the Court determines that the settlement
agreement is the product of arm's length negotiations
between the parties based on the case's merits and that
there has been no “overreaching” by the employer
during the negotiations.
the parties have provided in camera an affidavit and
time-logs for the proposed attorneys' fees. The affidavit
and logs reveal that a reasonable rate is requested, and in
light of the relief this settlement affords to each
Plaintiff, the Court finds that this requested fee of $11,
785.00 is reasonable. This amount is 29% of what
Plaintiff's counsel represents in the invoice as the
total balance due to them for this case. Furthermore, based
on the more than 95% yield for Plaintiffs on their damages
calculations, the Court determines that the attorneys'
fee will not be recovered at the expense of the
Plaintiffs' wage claims.
settlement appears to be the result of an arms-length
negotiation between the parties based on the merits of the
case. It is informed by the facts revealed during discovery;
it provides a substantial recovery to Plaintiffs when
considered in light of the existing bona fide disputes, the
merits of their case, and the likelihood of their success;
and it contains no hallmarks of collusion.
THEREFORE ORDERED that the proposed settlement agreement is
approved in its entirety as fair and reasonable.
FURTHER ORDERED that the parties' joint motion to dismiss
(Doc. 38) is GRANTED and, in light of the settlement
agreement, this case is DISMISSED WITH PREJUDICE.
 While the parties submitted these
documents for in camera review, the Court has filed them