United States District Court, W.D. Arkansas, Hot Springs Division
CHEVON THOMPSON, Individually and Behalf of all Others Similarly Situated PLAINTIFF
SPA CITY STEAKS, INC. d/b/a COLTON'S STEAKHOUSE AND GRILL DEFENDANT
O. HICKEY CHIEF UNITED STATES DISTRICT JUDGE
the Court is the parties' Joint Motion to Dismiss with
Prejudice and For Approval of Settlement Agreement. (ECF No.
80). The Court finds the matter ripe for consideration. For
the reasons discussed below, the Court finds that the instant
motion should be granted.
30, 2017, Plaintiff Chevon Thompson filed this suit
individually and behalf of all others similarly situated,
alleging that Defendant willfully violated the Fair Labor
Standards Act (“FLSA”), 29 U.S.C. § 201 et
seq., and the Arkansas Minimum Wage Act (AMWA), Ark.
Code Ann. §11-4-201, et seq., by failing to pay her
minimum wage and overtime compensation as required by the
FLSA and AMWA. On November 17, 2017, the Court entered an
order granting conditional collective-action certification
related to Plaintiff's claims of unpaid minimum wage and
overtime against Defendant, under section 216(b) of the FLSA,
and approving notice to be sent to putative collective-action
members. Notice was sent to all putative collective-action
members and seventeen individuals filed written consent
notices to opt into this action.
October 22, 2019, the parties reached a settlement, as
captured in a proposed Settlement Agreement and Release of
Claims attached to the instant motion. (ECF No. 80-1). The
parties believe that the settlement agreement requires the
Court's approval because it involves FLSA claims.
Accordingly, the parties filed the instant motion, asking the
Court to approve their settlement and dismiss this case.
parties' settlement agreement proposes to resolve the
FLSA claims of a conditionally certified collective action.
The Court notes that “[t]he law 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.” Jordan v. RHD, Jr., Inc.,
No. 2:16-cv-2227-PKH, 2017 WL 3499938, at *1 (W.D. Ark. July
24, 2017); see also Stainbrook v. Minn. Dep't of Pub.
Safety, 239 F.Supp.3d 1123, 1127 (D. Minn. 2017)
(questioning whether judicial approval of a proposed FLSA
settlement is necessary in the absence of a final certified
collective action). However, wage claims under the FLSA can
only be waived in two ways: (1) the Secretary of Labor is
authorized to supervise payment to employees of unpaid wages
owed to them; and (2) when, as in this case, an employee
brings a private action for back wages under the FLSA, a
court may enter a stipulated judgment after scrutinizing the
settlement for fairness. 29 U.S.C. § 216(c); Beauford
v. ActionLink, LLC, 781 F.3d 396, 405 (8th Cir. 2015);
see also Cruthis v. Vision's, No.
4:12-cv-0244-KGB, 2014 WL 4092325, at *1 (E.D. Ark. Aug. 19,
2014) (“Settlement agreements resolving FLSA claims
typically are subject to court approval.”).
approving an FLSA 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.”
Younger v. Ctrs. for Youth & Families, Inc., No.
4:16-cv-0170-KGB, 2017 WL 1652561, at *1 (E.D. Ark. Apr. 27,
2017). A review of the pleadings in this case shows that a
bona fide dispute exists as to whether Plaintiffs were
entitled to minimum wage and overtime pay pursuant to the
FLSA, and if so, the amount of unpaid wages Plaintiffs are
entitled to; as to whether Defendant willfully violated the
FLSA; and as to the number of and accuracy of hours
purportedly worked by each Plaintiff. Because a bona fide
dispute exists, the Court must now scrutinize the settlement
not appear that the Eighth Circuit has directly addressed the
factors for use in deciding whether to approve FLSA
settlements. Id. As a result, Arkansas federal
courts have utilized at least two different standards for
scrutinizing FLSA settlements. Compare Id.
(approving FLSA settlement after considering whether the
settlement is fair and reasonable to the employee and whether
the settlement otherwise impermissibly frustrates
implementation of the FLSA), with Jordan, 2017 WL
3499938, at *1 (approving FLSA settlement after considering
the totality of the circumstances, including several express
factors). Although the analysis under these different
approaches likely contains some overlap, in the absence of a
binding standard for scrutinizing FLSA settlements, the Court
joins with other courts in the Western District of Arkansas
by utilizing a totality-of-the-circumstances approach. In
doing so, the Court will determine whether the parties'
settlement is fair and reasonable under the FLSA by
scrutinizing the totality of the circumstances, considering
factors such as: (1) the stage of the litigation and the
amount of discovery exchanged; (2) the experience of counsel;
(3) the probability of success on the merits; (4) any
“overreaching” by the employer in settlement
negotiations; and (5) whether the settlement was the product
of arms' length negotiations between the parties, based
on the merits of the case. See Jordan, 2017 WL
3499938, at *1.
parties' settlement agreement sets out the amount due to
each Plaintiff for unpaid wages. The parties have also agreed
on the amount of attorneys' fees and costs that Defendant
will pay Plaintiffs' counsel under the settlement. The
parties have further agreed that Plaintiffs will voluntarily
waive all claims for compensation against Defendant,
including FLSA claims.
reviewing the above-listed factors in relation to the joint
motion and the settlement agreement, the Court finds that, at
this late stage in the litigation, the parties have engaged
in extensive document and deposition discovery. The parties
have also engaged in several discovery disputes. Thus, the
Court is satisfied that the parties' settlement is
informed by substantive discovery.
parties represent that the amount to be paid to each
Plaintiff under the settlement is reasonable given the
inherent risks, costs, and uncertainties of further
litigation and the likelihood of an appeal. Upon review of
the instant motion and its accompanying exhibit, the Court is
satisfied that Plaintiffs are receiving fair compensation
under the settlement agreement and that any disparities in
settlement amounts do not give rise to concern that any
Plaintiff is recovering at the expense of the others. The
Court is likewise convinced that the settlement reflects the
case's merits and Plaintiffs' likelihood of success
Court is also satisfied that the settlement is the result of
arms-length negotiation between the parties. The parties
participated in multiple settlement conferences with United
States Magistrate Judge Barry A. Bryant and subsequently
continued to engage in informal settlement discussions with
Judge Bryant's assistance. The parties represent that
these settlement discussions led to the parties reaching a
settlement. Accordingly, the Court finds that the
parties' settlement contains no hallmarks of collusion
and that there was no “overreaching” by Defendant
during the negotiations.
reasons discussed above, the Court finds that the
parties' proposed settlement agreement should be approved
in its entirety as fair and reasonable. Accordingly, the
parties' Joint Motion to Dismiss with Prejudice and For
Approval of Settlement Agreement (ECF No. 80) should be and
hereby is GRANTED. Plaintiffs' claims
against Defendant are hereby DISMISSED WITH
PREJUDICE. The Court shall retain jurisdiction over
the terms of the settlement agreement.