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Diaz v. New Work City, Inc.

United States District Court, N.D. Ohio, Eastern Division

October 18, 2017




         On August 16, 2017, the parties participated in a mediation session before a private mediator jointly chosen by the parties. On August 31, 2017, the Court directed the parties to file a joint report advising the Court of the status of the case, “with particular emphasis on the efforts to mediate or settle the matter[.]” (Non-Doc. Order, dated 8-31-17.) On September 8, 2017, the parties filed their joint report, in which they reported the parties had reached a settlement on all material terms, subject to the Court's approval. (Doc. No. 24 (Joint Status Report) at 185.)

         Now before the Court is the parties' Joint Motion for Approval of Settlement, which seeks the Court's approval of a settlement agreement between plaintiffs and defendants resolving plaintiffs' claims under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201, et seq., and Ohio statutory law. (Doc. No. 25 [“Joint Mot.”].) Appended to the motion are the parties' settlement agreement, a proposed final order, a schedule of payments, proposed notices to potential opt-in plaintiffs, and a declaration from plaintiffs' counsel. The Court must now determine whether the settlement represents a fair resolution of plaintiffs' FLSA claims. For the reasons that follow, the Court finds that it does, and the settlement is approved.

         I. Background

         In this action, filed on September 19, 2016, plaintiffs, Jasmine Diaz, Jasmine Jones, and Constance Shannon, brought suit against defendants, New Work City, Inc., Gladstone Headquarters, Inc., Vicki Stanley, and Tony Motesano, on behalf themselves and others similarly situated, for the payment for wages earned but allegedly uncompensated by defendants. (Doc. No. 1 [“Compl.”].) Defendants denied that plaintiffs were entitled to any additional wages, and further denied that they violated the FLSA or Ohio law. (Doc. No. 13.)

         On February 13, 2017, plaintiffs filed a Motion for Conditional Certification, Opt-In Discovery, and Court-supervised Notice to Potential Opt-in Plaintiffs. (Doc. No. 17 [“Mot. Cond. Cert.”].) By their motion, plaintiffs sought to certify the following collective under the FLSA and class under Fed.R.Civ.P. 23:

All present and former hourly employees of Defendants who worked as STNAs (State Tested Nursing Assistants) or LPNs (Licensed Practical Nurses) or other similar job titles from three years prior to the filing of this complaint to the present.

         (See Compl. ¶¶ 37, 42.)

         On February 15, 2017, the Court conducted a telephonic case management conference with counsel for the parties, wherein the Court set dates and deadlines to govern this case, including dates and deadlines for the briefing of plaintiffs' motion for conditional certification. (Doc. No. 19.) Prior to the completion of briefing on this preliminary motion, the parties moved, on multiple occasions, to stay briefing while the parties engaged in mediation. The Court granted these motions, and stayed the briefing. (Non-document Orders, dated April 7, 2017 and May 31, 2017.) On May 31, 2017, the Court denied plaintiff's motion for conditional certification, without prejudice, as moot, in light of the parties' anticipated global settlement. (Non-document Order, dated May 31, 2017.) On October 5, 2017, the parties filed the present joint motion to approve the settlement.

         II. Applicable Law

         “Employees are guaranteed certain rights by the FLSA, and public policy requires that these rights not be compromised by settlement.” Crawford v. Lexington-Fayette Urban Cnty. Gov., Civil Action No. 06-299-JBC, 2008 WL 4724499, at *2 (E.D. Ky. Oct. 23, 2008). “The central purpose of the FLSA is to protect covered employees against labor conditions ‘detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers.'” Id. (quoting 29 U.S.C. § 202).

         The provisions of the FLSA are mandatory and, except in two narrow circumstances, are generally not subject to bargaining, waiver, or modification by contract or settlement. Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697, 706, 65 S.Ct. 895, 89 L.Ed. 1296 (1945); Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350, 1353-53 (11th Cir. 1982). The first exception involves FLSA claims that are supervised by the Secretary of Labor pursuant to 29 U.S.C. § 216(c). Lynn's Foods, Inc., 679 F.2d at 1533. The second exception, applicable here, encompasses instances in which federal district courts approve settlement of suits brought in federal district court pursuant to § 16(b) of the FLSA. Id.

         In reviewing the settlement of a federal plaintiff's FLSA claims, the district court must “‘ensure that the parties are not, via settlement of [the] claims, negotiating around the clear FLSA requirements of compensation for all hours worked, minimum wages, maximum hours, and overtime.'” Rotuna v. W. Customer Mgmt. Group LLC, No. 4:09CV1608, 2010 WL 2490989, at *5 (N.D. Ohio June 15, 2010) (quoting Collins v. Sanderson Farms, Inc., 568 F.Supp.2d 714, 719 (E.D. La. 2000) (further citation omitted)). The existence of a bona fide dispute serves as a guarantee that the parties have not manipulated the settlement process to permit the employer to avoid its obligations under the FLSA. Id. (citing Crawford, 2008 WL 4724499, at *3). The Court should also consider the following factors: the risk of fraud or collusion, the complexity, expense, and likely duration of the litigation, the amount of discovery completed, the likelihood of success on the merits, and the public interest in settlement. Crawford, 2008 WL 4724499, at *3 (citing Int'l Union, United Auto., Aerospace, and Agr. Workers of Am. v. Gen. Motors Corp., 497 F.3d 615, 631 (6th Cir. 2007)). In addition, where the settlement agreement proposes an award of attorney's fees, such fees must be reasonable. See generally Reed v. Rhodes, 179 F.3d 453, 471 (6th Cir. 1999) (citing Blum v. Stenson, 465 U.S. 886, 893, 104 S.Ct. 1541, 79 L.Ed.2d 891 (1984)).

         III. ...

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