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Gagliastre v. Capt. George's of South Carolina, LP

United States District Court, E.D. Virginia, Norfolk Division

May 29, 2019

CHRIS GAGLIASTRE, et al., Plaintiffs,
v.
CAPT. GEORGE'S SEAFOOD RESTAURANT, LP, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          Raymond A. Jackson, Judge

         This matter is before the Court for consideration of Plaintiffs' Motion for Approval of a Fair Labor Standards Act ("FLSA") Settlement, and Plaintiffs' Motion for Award of Attorney's Fees and Expenses. On March 4, 2019, the Court held a Settlement Fairness Hearing. ECF No. 257. For the reasons stated below, the Motion for Approval of FLSA Settlement is GRANTED, and Plaintiffs' Motion for Approval of Attorney's Fees and Expenses is GRANTED.

         I. FACTUAL AND PROCEDURAL HISTORY

         This action is an FLSA case filed pursuant to 29 U.S.C. § 216(b) to recover compensatory and liquidated damages, attorney fees, and other relief. Plaintiffs assert that Defendants violated the FLSA and bring this case on behalf of themselves and all other employees similarly situated.

         On December 13, 2018, both parties participated in a mediation in Norfolk, VA with retired Judge F. Bradford Stillman. After an all-day mediation, the parties were able to come to a settlement agreement that resolves the disputed issues before this Court as well as the disputed issues before the District Court of South Carolina. See ECF No. 250-1. On January 9, 2019, the parties filed a Joint Notice of Settlement before the Court. ECF No. 243. On February 4, 2019, Plaintiffs filed the instant Motion for Settlement Approval and a Motion for Attorney's Fees and Expenses. ECF Nos. 249, 251. On March 4, 2019, the Court held a Fairness Hearing for Settlement Approval. ECF No. 257.

         II. LEGAL STANDARDS

         An FLSA settlement agreement and dismissal of FLSA action requires court approval after the Court has reviewed the settlement for fairness and reasonableness. 29 U.S.C. § 216(b); Taylor v. Progress Energy, Inc., 493 F.3d 454, 460 (4th Cir. 2007); Lynn's Food Stores, Inc. v. U.S. By & Through U.S. Dep't of Labor, Employment Standards Admin., Wage & Hour Div., 679 F.2d 1350, 1353 (11th Cir. 1982); Baker v. Dolgencorp, Inc., 818 F.Supp.2d 940, 941 (E.D. Va. 2011). There is a "strong presumption in favor of finding a settlement fair" that the court should keep in mind in when determining whether a settlement is fair, adequate and reasonable. LaFleur v. Dollar Tree Stores, Inc., 189 F.Supp.3d 588, 593 (E.D. Va. 2016).

         In evaluating a FLSA settlement agreement, the Court must determine three things: (1) that the FLSA issues are actually in dispute; (2) that the settlement is a reasonable compromise over the issues; and (3) if there is a clause on attorneys' fees then the award must reasonable and independently assessed. See Silva v. Miller, 307 Fed.Appx. 349, 351 (11th Cir.2009) (citations omitted). Generally, "where there is an 'assurance of an adversarial context' and the employee is 'represented by an attorney who can protect [his] rights under the statute,' the settlement will be approved. Duprey v. Scotts Co. L.L.C., 30 F.Supp.3d 404, 408 (D. Md. 2014) (quoting Lynn's Food Stores, 679 F.3d at 1354).

         As to the first prong, "courts examine the pleadings in the case, along with the representations and recitals in the proposed settlement agreement." Id. The Court must find that the employees seek to enforce their FLSA rights and that the parties demonstrate an actual disagreement as to the factual allegations that undergird the action. See Lynn's Food Stores, 679 F.2d. at 1354.

         Regarding the reasonable compromise factor, courts weigh a number of factors, including:

(1) the extent of discovery that has taken place;
(2) the stage of the proceedings, including the complexity, expense and likely duration of the litigation;
(3) the absence of fraud or collusion in the settlement;
(4) the experience of counsel who have represented the plaintiffs;
(5) the probability of plaintiffs' success on the merits[;] and [(6)] the amount of the settlement in relation to the potential recovery.

LaFleur, 189 F.Supp.3d at 593 (citing Flinn v. FMC Corp., 528 F.2d 1169, 1173 (4th Cir. 1975)).

         Finally, while the FLSA requires the defendant to pay plaintiffs attorneys' fees if the plaintiff is successful, 29 U.S.C. § 216(b), a settlement means that judgment is not entered in favor of either party, so attorneys' fees are not required. Dees v. Hydradry, Inc., 706 F.Supp.2d 1227, 1243 (M.D. Fla. 2010). However, if the settlement agreement does consider awarding attorneys' fees, the Court must still determine if the attorneys' fees are reasonable and that they were "independently assessed, regardless of whether there is any suggestion that a conflict of interest taints the amount the wronged employee recovers under a settlement agreement." Id.

         In determining the fairness and reasonableness of a FLSA settlement agreement, the Court may confirm the agreement, preliminarily grant the agreement but order parties to strike portions that it deems unfair or unreasonable, or deny the agreement if there are too many issues with the agreement. See, e.g., Lomascolo, 2009 WL 9094955, at *l (granting settlement approval); Stephens v. MAC Bus. Sols., Inc., No. 15-3057, 2016 WL 3977473, at *3 (D. Md. July 25, 2016) (approving settlement but ordering parties to submit a new agreement that removes the unreasonable ...


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