United States District Court, E.D. Arkansas, Western Division
CITIA WELLS, individually and on behalf of others similarly situated PLAINTIFF
PALCO, INC., et al. DEFENDANTS
Kristine G. Baker United States District Judge
Citia Wells, individually and on behalf of others similarly
situated, filed this action against Palco, Inc.
(“Palco”), Alicia A. Paladino, and Larry A.
Paladino alleging violations of the overtime requirements of
the Fair Labor Standards Act (“FLSA”), codified
at 29 U.S.C. § 201, et seq. Before the Court is
Ms. Wells' unopposed motion to approve FLSA settlement
and supporting memorandum (Dkt. No. 34). The parties now
request that the Court approve the settlement. Attached to
the motion as Exhibit 1 is a stipulation of settlement
agreement and release (“Settlement Agreement”)
(Dkt. No. 34, Exhibit 1).
August 3, 2017, the Court entered an Order granting the
parties' joint motion for approval of stipulation on
conditional class certification as to defendant Palco (Dkt.
No. 22). In the Order, this Court directed Palco to provide
to Ms. Wells the potential class members' contact
information within 10 business days (Id., at 1).
This Court also granted Ms. Wells 60 days from the date of
receipt of the potential class members' contact
information to distribute the notice and file all consent
forms (Id.). On September 19, 2017, Ms. Wells sent a
notice of this civil action and consent forms to 78 persons
who were deemed the collective class as certified by this
Court's Order from August 3, 2017 (Dkt. No. 34, at 3).
After the deadline for returning the consent forms, and with
agreement from defendants regarding several who returned
their consent forms after the return deadline, there were 21
persons who timely returned their consent forms, creating a
class of 22 members participating in this settlement
(“Collective Class Members”) (Id.).
agreements resolving FLSA claims are typically subject to
court approval. See Dillworth v. Case Farms Processing,
Inc., No. 5:08-cv-1694, 2010 WL 776933 at *2 (N.D. Ohio
Mar. 8, 2010) (citing 29 U.S.C. §216(b)). Before
approving a settlement, the Court must ensure that the
parties are not negotiating around the FLSA's
requirements and that the settlement represents a fair and
reasonable resolution of a bona fide dispute. See
Id. at *5; see also Int'l Union, United Auto.,
Aerospace, & Agric. Implement Workers of Am. v. Gen.
Motors Corp., 497 F.3d 615, 631 (6th Cir. 2007).
Wells asserts that, for FLSA settlement agreements, a
district court should approve a fair and reasonable
settlement if it was reached as an arm's length
resolution of contested litigation to resolve a bona fide
dispute. See Lynn's Food Stores, Inc. v. United
States, 679 F.2d 1350, 1352-54 (11th Cir. 1982).
Eighth Circuit Court of Appeals has not directly addressed
the factors to be considered in deciding motions for approval
of FLSA settlements. However, other courts have examined such
settlements. “When employees bring a private action for
back wages under the FLSA, and present to the district court
a proposed settlement, the district court may enter a
stipulated judgment after scrutinizing the settlement for
fairness.” Lynn's Food, 679 F.2d at 1353.
After Lynn's Food was decided, other courts to
examine this issue have divided the “fairness”
determination into two steps:
First, the court should consider whether the compromise is
fair and reasonable to the employee (factors
“internal” to the compromise). If the compromise
is reasonable to the employee, the court should inquire
whether the compromise otherwise impermissibly frustrates
implementation of the FLSA (factors “external” to
the compromise). The court should approve the compromise only
if the compromise is reasonable to the employee and furthers
implementation of the FLSA in the workplace.
Dees v. Hydradry, Inc., 706 F.Supp.2d 1227, 1240-41
(M.D. Fla. 2010); see also Anthony v. Concrete Supply
Co., Inc., No. 3:16-cv-70-TCB, 2017 WL 5639933, at *1
(N.D.Ga. August 23, 2017) (applying the Dees
approach). This Court has previously applied the
Dees approach when analyzing settlement agreements
under FLSA. See Younger v. Centers for Youth and
Families, Inc., No. 4:16-cv-00170-KGB, 2017 WL
1652561 (E.D. Ark. April 27, 2017); Cruthis v.
Vision's, No. 4:12-cv-00244-KGB, 2014 WL 4092325
(E.D. Ark. August 19, 2014).
reviewed the Settlement Agreement, the Court determines that
the Settlement Agreement both provides Collective Class
Members a reasonable recovery and furthers the implementation
of the FLSA in the workplace. Therefore, the Court grants Ms.
Wells' unopposed motion to approve FLSA settlement and
supporting memorandum (Dkt. No. 34).
Wells attached a proposed settlement notice as Exhibit B to
the Settlement Agreement filed for the Court's
consideration (Dkt. No. 34, Exhibit B). The settlement notice
fully and accurately informs Collective Class Members of all
material elements of the litigation and the proposed
Settlement Agreement. The settlement notice also advises
Collective Class Members of their payment under the
Settlement Agreement and that their claims will be dismissed
with prejudice if they accept payment by negotiating either
of the settlement checks provided to them (Id., at
2). The settlement notice informs Collective Class Members
that, if they do not wish to participate in the settlement,
and want to pursue their claims on their own, they can do so
by not negotiating any of their settlement checks
parties propose to disseminate the settlement notice to all
Collective Class Members via first class mail to the last
known addresses of all Collective Class Members along with
their respective payments via checks as set forth in the
Settlement Agreement. The Court finds that the form and
method of disseminating the notice and payment to Collective
Class Members, as provided in the Settlement Agreement, is
the best notice practicable under the circumstances and
satisfies the requirements of applicable federal and state
stated in the Settlement Agreement, within 45 calendar days
after entry of this Order, counsel for Collective Class
Members shall mail such notice and payments by first class
mail to the last known addresses of each Collective Class
Member (Dkt. No. 34, ¶ 5.1). Defendants shall provide
payment to counsel for Collective Class Members prior to this
action is dismissed with prejudice and without costs to any
party, except to the extent otherwise expressly provided in
the Settlement Agreement. The Court approves Collective Class
Member counsel's application for an award of
attorneys' fees and reimbursement of costs in the amounts
set forth in the Settlement Agreement (Dkt. No. 34, at 11
-15). Further, the Court approves of the enhancement award to
Ms. Wells, the named plaintiff, as set forth in the proposed