Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alsd-1_15-cv-00325/USCOURTS-alsd-1_15-cv-00325-0/pdf.json

Nature of Suit Code: 710
Nature of Suit: Fair Labor Standards Act
Cause of Action: 28:1331 Fed. Question: Fair Labor Standards

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IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

JENNIFER GROSS, )

 )

Plaintiff, )

)

v. ) CIVIL ACTION 15-0325-WS-B

 )

STATEWIDE HEALTHCARE )

SERVICES, INC., et al., )

 )

Defendants. )

ORDER

This matter comes before the Court on the parties’ Joint Motion to Approve Settlement 

Agreement Pursuant to the Fair Labor Standards Act (doc. 20).

I. Procedural History.

Plaintiff, Jennifer Gross, brought this action against Statewide Healthcare Services, Inc. 

and Oxford Health Care Services, Inc., alleging violations of the Fair Labor Standards Act, 29 

U.S.C. §§ 201 et seq. (“FLSA”). According to the well-pleaded allegations of the Complaint, 

Gross worked for defendants from January 2012 until March 2015 as a Certified Nursing 

Assistant / Home Health Aid. The Complaint alleges that Gross’s job duties consisted in large 

part of performing general housework such as washing clothes, cooking meals, and running 

errands for patients and their families, with only 30-40% of her work time devoted to patient 

care, such that she was properly classified as nonexempt under the FLSA. Gross pleads that 

defendants routinely required her to work in excess of 40 hours per week, but compensated her 

only at her straight-time rate of $8.25/hour, even for hours worked in excess of 40 in a given 

week.

Based on these factual allegations, Gross’s Complaint claimed that defendants had 

violated the overtime pay requirements of the FLSA, and demanded unpaid overtime 

compensation, plus fees and costs. (See doc. 1, at 5.) For their part, defendants denied any 

FLSA liability to Gross based on their contention that she “performed FLSA-exempt work as a

home care provider for the vast majority of her employment.” (Doc. 14, at 2.) In so doing, 

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defendants appear to claim that Gross was exempt from the FLSA’s overtime pay requirements 

pursuant to 29 U.S.C. § 213(a)(15).1

Despite their substantial legal and factual disputes, the parties, by and through their 

respective counsel of record, engaged in early settlement discussions informed by plaintiff’s 

responses to court interrogatories (doc. 16) and defendants’ Verified Summary of Plaintiff’s 

Hours Worked and Wages for 2013-2015 (doc. 17). The result of these discussions was that the 

parties, with the advice and counsel of their attorneys, have reached a compromise settlement of 

this dispute. On that basis, and as required by applicable law, the parties now seek judicial 

approval of their proposed settlement.

II. Analysis.

A. Statutory Requirement of Judicial Approval of FLSA Settlements.

In the overwhelming majority of civil actions brought in federal court, settlements are not 

subject to judicial oversight, scrutiny or approval. However, FLSA settlements must be handled 

differently. See, e.g., Moreno v. Regions Bank, 729 F. Supp.2d 1346, 1348 (M.D. Fla. 2010) 

(“Settlement of an action under the FLSA stands distinctly outside the practice common to, and 

accepted in, other civil actions.”). This is because “Congress made the FLSA’s provisions 

mandatory; thus, the provisions are not subject to negotiation or bargaining between employers 

and employees.” Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350, 1352 (11th Cir. 

1982). “Despite this general rule, an employer and an employee may settle a private FLSA suit 

under the supervision of the district court” where there is a “bona fide dispute over FLSA 

coverage.” Hogan v. Allstate Beverage Co., 821 F. Supp.2d 1274, 1281 (M.D. Ala. 2011). The 

 1 That section creates an exemption for “any employee employed in domestic 

service employment to provide companionship services for individuals who (because of age or 

infirmity) are unable to care for themselves (as such terms are defined and delimited by 

regulations of the Secretary).” 29 U.S.C. § 213(a)(15). Department of Labor regulations define 

the term “companionship services” as meaning “the provision of fellowship and protection for an 

elderly person or person with an illness, injury, or disability who requires assistance in caring for 

himself or herself,” but excludes “domestic services performed primarily for the benefit of other 

members of the household.” 29 C.F.R. § 552.6(a), (c). Defendants’ legal position is potentially 

hampered by a new DOL regulation whose effective date was January 1, 2015 (two months 

before Gross’s employment concluded), and which specifies that “[t]hird party employers of 

employees engaged in companionship services within the meaning of § 552.6 may not avail 

themselves of the minimum wage and overtime exemption provided by section 13(a)(15) of the 

Act.” 29 C.F.R. § 552.109.

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mechanics of such a settlement are that “[w]hen 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.

Where, as here, a district court is asked to approve an FLSA settlement between private 

litigants, the court’s responsibility is to ascertain whether the parties’ negotiated resolution 

comports with the statute’s terms. See, e.g., Nall v. Mal-Motels, Inc., 723 F.3d 1304, 1307-08 

(11th Cir. 2013) (“[t]he purposes of the FLSA are undermined whenever an employer is allowed 

to escape liability for violations of the statute”); Miles v. Ruby Tuesday, Inc., 799 F. Supp.2d 

618, 622-23 (E.D. Va. 2011) (“the reason judicial approval is required for FLSA settlements is to 

ensure that a settlement of an FLSA claim does not undermine the statute’s terms or purposes”). 

A settlement may be approved upon confirmation that “employees have received all uncontested 

wages due and that they have received a fair deal regarding any additional amount that remains 

in controversy.” Hogan, 821 F. Supp.2d at 1282. Thus, the touchstone of the inquiry is whether 

the proposed settlement “constitutes a fair and reasonable compromise of a bona fide FLSA 

dispute.” Crabtree v. Volkert, Inc., 2013 WL 593500, *3 (S.D. Ala. Feb. 14, 2013).

The caveat to such judicial oversight is that “[i]n reviewing FLSA settlements under 

Lynn’s Food, courts should be mindful of the strong presumption in favor of finding a settlement 

fair.” Parker v. Chuck Stevens Chevrolet of Atmore, Inc., 2013 WL 3818886, *2 (S.D. Ala. July 

23, 2013) (citations and internal quotation marks omitted); see also Wingrove v. D.A. 

Technologies, Inc., 2011 WL 7307626, *2 (N.D. Ga. Feb. 11, 2011) (recognizing “strong 

presumption” that FLSA settlements are fair and reasonable). Such deference is warranted 

because “the Court is generally not in as good a position as the parties to determine the 

reasonableness of an FLSA settlement” and “[i]f the parties are represented by competent 

counsel in an adversary context, the settlement they reach will, almost by definition, be 

reasonable.” Bonetti v. Embarq Management Co., 715 F. Supp.2d 1222, 1227 (M.D. Fla. 2009).

B. Fairness/Reasonableness of Settlement.

The parties’ filings reflect that this action does, indeed, involve a bona fide FLSA dispute 

as to whether Gross was entitled to FLSA overtime compensation. In particular, the parties 

appear to have good-faith factual and legal disagreements as to whether the nature of Gross’s 

duties rendered her eligible for the FLSA companionship exemption or not. All information 

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before the Court at this time supports a determination that the validity of Gross’s FLSA claim 

was actually, reasonably in dispute, thereby giving rise to the possibility of a Lynn’s Food

compromise of those disputed claims.

Against this backdrop of litigation uncertainty, the parties negotiated a settlement to 

resolve Gross’s FLSA claim in its entirety. The Settlement Agreement and General Release 

(doc. 20, Exh. A) confirms that defendant Statewide Healthcare Services, Inc. has agreed to pay 

Gross, and Gross has agreed to accept, the sum of $2,300 in unpaid wages and liquidated 

damages. This sum appears to constitute all or substantially all of the premium pay that Gross 

claims she is owed.2 Additionally, defendants have agreed to make a separate settlement 

payment to plaintiff in the amount of $2,200 for attorney’s fees and costs.

In conducting the mandatory Lynn’s Food fairness review of the proposed settlement, the 

Court finds that numerous factors favor approval here. First, by all appearances, there is a bona 

fide dispute between the parties as to whether Gross would be entitled to recover unpaid 

overtime compensation at all as to the vast majority of her hours worked in excess of 40 in a 

week. Given the factual and legal uncertainty as to whether she was covered by the 

companionship exemption during her employment for defendants, the parties’ announced 

settlement is a fair and reasonable compromise of a bona fide FLSA coverage dispute. Second, 

the court file reflects that this settlement was the product of arm’s-length, good-faith 

negotiations, with each side represented by counsel and exchanging information to facilitate the 

informed evaluation of settlement proposals. Third, as noted, the backpay amount being paid to 

Gross would compensate her fully for all unpaid overtime wages that Statewide’s records of 

hours worked show she would be entitled to receive if she were to prevail on her FLSA claim. 

Fourth, while attorney’s fee settlements in FLSA cases may be problematic for a Lynn’s Food

 2 In particular, Statewide’s Verified Summary of Plaintiff’s Hours Worked and 

Wages reflects that (i) Gross worked no hours in excess of 40 in any workweek in 2013; (ii) 

Gross worked a total of 534.75 hours in excess of 40 in particular workweeks in 2014; and (iii) 

Gross worked a total of 6 hours in excess of 40 in particular workweeks in 2015. Thus, by 

defendants’ records, the total number of hours for which Gross claims to have been underpaid 

(receiving only her $8.25/hr straight-time rate rather than her $12.38/hr overtime premium pay 

rate) is 540.75. Multiplying that total number of overtime hours by the $4.13 overtime pay 

differential would yield a backpay sum of $2,233.30, or some $66.70 less than the agreed-upon 

settlement amount.

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analysis where the attorney’s fee payment adversely impacts the plaintiff’s recovery, there is no 

indication and no reason to believe that such is the case here. Again, with plaintiff receiving 100 

cents on the dollar for the overtime pay she would be owed under Statewide’s hours-worked 

records if she prevailed at trial, it seems inconceivable that this amount could have been 

ratcheted downward to help fund the separate attorney’s fee payment.

In short, and with due regard for the strong presumption in favor of finding FLSA 

settlements reasonable when negotiated by competent counsel in an adversary context, the Court 

concludes that the proposed settlement represents a fair deal to resolve and settle FLSA claims 

that are the subject of a bona fide controversy.

III. Conclusion.

For all the foregoing reasons, it is ordered that the parties’ Joint Motion to Approve 

Settlement Agreement (doc. 20) is granted. The settlement of plaintiff’s FLSA claim is 

approved as fair and reasonable pursuant to the analysis required by the Eleventh Circuit in 

Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350 (11th Cir. 1982). In accordance with 

the requirements of Lynn’s Food, a stipulated final judgment will be entered.

3

DONE and ORDERED this 10th day of May, 2016.

s/ WILLIAM H. STEELE 

CHIEF UNITED STATES DISTRICT JUDGE

 3 Accompanying the Joint Motion is a proposed “Order Granting Joint Motion for 

Approval Settlement and for Order of Partial Dismissal.” (See doc. 20, at 6.) The Court declines 

to enter that proposed order for at least two reasons. First, the parties’ request for an “Order of 

Partial Dismissal” is puzzling and appears inaccurate. The only claim interposed by Gross in this 

litigation is an FLSA cause of action; therefore, no claims would survive the compromise 

settlement of her FLSA theory of liability. There is simply nothing left of the case, so the 

dismissal cannot be “partial.” Besides, the present request for “Order of Partial Dismissal” is 

irreconcilable with the parties’ previous representation to the Court that they “have reached a 

settlement of all claims.” (Doc. 18.) The Court therefore assumes that the reference to an 

“Order of Partial Dismissal” was erroneous and inadvertent, and that the parties are not 

requesting that any portion of the Complaint be left intact. Second, the proposed order would 

have this Court simply dismiss plaintiff’s FLSA claims; however, the Eleventh Circuit has 

emphasized that settlement of FLSA claims under Lynn’s Food must be effectuated via 

stipulated final judgment. See, e.g., Nall, 723 F.3d at 1308 (“The agreement between Nall and 

Malik was not made under the supervision of the Secretary of Labor, so it is valid only if the 

district court entered a ‘stipulated judgment’ approving it.”) (emphasis added).

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