United States District Court, W.D. Arkansas, Fayetteville Division
SHAY FERGUSON and JOSHUA COLEMAN, individually and on behalf of all others similarly situated PLAINTIFFS
ARKANSAS SUPPORT NETWORK, INC. DEFENDANT
OPINION AND ORDER
HOLMES, III CHIEF U.S. DISTRICT JUDGE
the Court is the parties' joint motion (Doc. 53) to
approve the settlement agreement and dismiss and a brief in
support. The parties have also submitted by email a proposed
confidential settlement agreement for the Court's review.
The motion will be granted.
filed this lawsuit on December 12, 2017, claiming that
Defendant failed to pay minimum and overtime wages in
violation of section 216(b) of the Fair Labor Standards Act
(“FLSA”). On May 9, 2018, 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. 20). The parties now seek
Court approval of their settlement agreement and a dismissal
of all claims. The Court has reviewed the joint motion and
confidential settlement agreement and will now approve the
settlement agreement and grant the motion to dismiss.
are only two ways in which wage claims under the FLSA can be
settled or compromised by employees. First, under section
216(c), the Secretary of Labor is authorized to supervise
payment to employees of unpaid wages owed to them.”
Lynn's Food Stores, Inc. v. United States, 679
F.2d 1350, 1352-53 (11th Cir. 1982). Second, “[w]hen
employees bring private actions 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.” Id. at 1353; Beauford v.
ActionLink, 781 F.3d 396, 405 (8th Cir. 2015). The
parties here propose a stipulated judgement. The parties have
set out in their settlement agreement the amounts due to each
opt-in Plaintiff for unpaid wages and the amounts of
liquidated damages agreed upon. Defendant will also continue
making payments of back wages to Arkansas Support Network
employees pursuant to an existing agreement with the U.S.
Department of Labor. The parties have further agreed as to
the amount of attorneys' fees that Defendant will pay
Plaintiffs' counsel. The parties have agreed that
Plaintiffs will voluntarily waive all wage or overtime
related claims for compensation, including FLSA and Arkansas
Minimum Wage Act claims.
agreements conditioned on confidentiality run counter to the
policy of public access to judicial documents. There is a
presumption of public access to judicial documents. Thus, in
order for the Court to approve a confidential settlement
agreement, the parties must demonstrate a need for
confidentiality that outweighs the strong presumption to
public access. Wolinsky v. Scholastic Inc., 900
F.Supp.2d 332, 337 (S.D.N.Y. 2012). The Court finds that
Defendant in this case has demonstrated such necessity to
overcome the presumption of public access for the reasons
communicated to the Court and included in the settlement
agreement. The Court is also satisfied that maintaining the
confidentiality of the settlement agreement will not prevent
other potential plaintiffs from receiving notice of a
potential claim against Defendant for unpaid wages because
all potential plaintiffs have received two notices of a
the Court will analyze the parties' joint settlement. A
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, 679
F.2d at 1353 n.8. The Court finds a bona fide dispute exists.
Plaintiffs argued in their motion for partial summary
judgment that Defendant willfully violated the FLSA, rather
than acting in good faith based on a reasonable
interpretation of the FLSA. However, Defendant argues in
opposition that its violation was not willful, but rather was
based on the belief that the Department of Labor's Final
Rule precluding application of the companionship services
exemption to home health workers would be appealed and
overturned. The Court determined that their was a bona fide
dispute regarding the willfulness of Defendant's action
denying summary judgment on that issue. Because a bona fide
dispute exists as to whether Plaintiffs are entitled to
minimum wage and overtime for their work, the Court must
evaluate whether the settlement is fair.
factors a court should consider in evaluating the fairness of
a settlement depend on the unique circumstances of each case.
Lewis-Ramsey v. Evangelical Lutheran Good Samaritan
Soc'y, 3:16-cv-00026, 2017 WL 821656 *5 (S.D. Iowa,
Jan.10, 2017). Among the factors courts have considered are:
(1) the amount of overtime to which class members may be
entitled; (2) how close to full compensation of class
members' claims the proposed settlement provides; (3)
whether the proposed settlement includes or excludes
liquidated damages and/or attorney's fees and expenses;
(4) the likely complexity, expense, and duration of the
litigation if the settlement is not approved; and (5) what
additional claims class members must release in order to
receive compensation under the proposed settlement agreement.
See Lewis-Ramsey, 2017 WL 821656 at *4; Loseke
v. Depalma Hotel Corp., 4:13-cv-3191, 2014 WL 3700904
(D. Neb. July 24, 2014).
reviewing these factors in relation to the joint motion and
settlement agreement, the Court finds that the agreement is
fair and reasonable. The agreement appears to adequately
compensate Plaintiffs for the amount of overtime pay which
they allege was wrongfully withheld. The agreement also
includes liquidated damages, even though the validity of
liquidated damages is contested by the parties. Plaintiffs
waive only wage or overtime related claims and avoid an
expensive and time-consuming trial that would likely reach a
similar result to the settlement agreement.
the parties provide billing records for the proposed
attorneys' fees, costs, and expenses. A reasonable rate
is requested, and in light of the relief this settlement
affords to each Plaintiff, the Court finds that this
requested fee is reasonable. This 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 considering 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 confidential settlement
agreement is approved in its entirety as fair and reasonable.
FURTHER ORDERED that the parties' joint motion to dismiss
(Doc. 53) is GRANTED and this ...