Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-almd-2_09-cv-01143/USCOURTS-almd-2_09-cv-01143-0/pdf.json

Nature of Suit Code: 480
Nature of Suit: Consumer Credit
Cause of Action: 29:201 Fair Labor Standards Act

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IN THE DISTRICT COURT OF THE UNITED STATES FOR THE

MIDDLE DISTRICT OF ALABAMA, NORTHERN DIVISION

KATIE COLE, LEAH DAWSON, )

and KRISTY HOWARD, )

individually and on behalf )

of all others similarly )

situated, )

)

Plaintiffs, )

) CIVIL ACTION NO.

v. ) 2:09cv1143-MHT

) (WO) 

USA TRAVEL CENTERS, LLC )

and RAY McCULLOUGH, )

)

Defendants. )

OPINION

This case is currently before the court on the joint

motions of plaintiffs Katie Cole, Leah Dawson, and Kristy

Howard and defendants USA Travel Centers, LLC and Ray

McCullough to approve a settlement of the plaintiffs’

claims under the Fair Labor Standards Act (FLSA), 29

U.S.C. §§ 201-219. In addition to the three named

plaintiffs, 13 others have consented to the terms of the

proposed settlement: Tameka Yvette Bullock, Brittany

Catrett, Amy Griggs, Ethel Pearl Hall, Kimberlee G. Hall,

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Haley Hawsey, Brenda L. Johnson, Susie Knight, Jimmy E.

McCormick, Ernestine J. Moisan, Sandra F. Moore, Willie

Earl Skipper, and Beverly Tillery. Based on the

representations made during a hearing on March 9, 2011,

and for the reasons that follow, the motions will be

granted and the settlement will be approved.

Because the FLSA was enacted to protect workers from

the poor wages and long hours that can result from great

inequalities in bargaining power between employers and

employees, the FLSA's provisions are mandatory and,

except in two narrow circumstances, are generally not

subject to bargaining, waiver, or modification by

contract or settlement. Brooklyn Savings Bank v. O'Neil,

324 U.S. 697, 706 (1945). The first exception is that

the Secretary of Labor may supervise the payment of back

wages to employees; employees who accept such payments

waive their rights to bring suits for liquidated damages,

provided the employer pays the back amount in full. 29

U.S.C. § 216(c); Lynn's Food Stores, Inc. v. United

States, 679 F.2d 1350, 1352-53 (11th Cir. 1982).

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The second route to settlement, and the one that is

applicable here, occurs when an employee brings a private

action for back wages under 29 U.S.C. § 216(b); the

employee and employer present a proposed settlement to

the district court, and the district court reviews the

settlement and enters an appropriate judgment. Lynn's

Food Stores, 679 F.2d at 1354. The Eleventh Circuit

Court of Appeals has explained the rationale for court

approval of such settlements:

“Settlements may be permissible in the

context of a suit brought by employees

under the FLSA for back wages because

initiation of the action by the

employees provides some assurance of an

adversarial context. The employees are

likely to be represented by an attorney

who can protect their rights under the

statute. Thus, when the parties submit

a settlement to the court for approval,

the settlement is more likely to reflect

a reasonable compromise of disputed

issues than a mere waiver of statutory

rights brought about by an employer's

overreaching.”

Id.

In reviewing a settlement of an FLSA private claim,

a court must “scrutiniz[e] the settlement for fairness,”

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1. In Lynn's Food Stores, the appellate court

disallowed a compromise because it was not brought in the

context of an employee lawsuit, but rather was an attempt

by an employer to “settle” back pay claims because of a

pending investigation by the Secretary of Labor. The

“compromise” was unfair and reflected the extreme

inequalities of bargaining position against which the

FLSA was designed to protect.

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id. at 1353, and determine that the settlement is a “fair

and reasonable resolution of a bona fide dispute over

FLSA provisions,” id. at 1355. “If a settlement in an

employee FLSA suit does reflect a reasonable compromise

over issues, such as FLSA coverage or computation of back

wages, that are actually in dispute[,] the district court

[may] approve the settlement in order to promote the

policy of encouraging settlement of litigation.” Id. at

1354.1

In this case, there are bona-fide disputes over FLSA

provisions, namely FLSA coverage and the amount of

backpay. Further, after hearing from two out of the

three named plaintiffs and nine out of the 13 other

recipients who have consented to the terms of the

proposed settlement and after reviewing the settlement

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2. The court did not hear from plaintiff Howard or

from the following recipients: Griggs, McCormick, Moore,

and Skipper. However, these persons received written

notice of the settlement hearing. Further, subsequent to

the settlement hearing, they filed affidavits explaining

that they consent to the proposed settlement.

Accordingly, they will be bound by the settlement’s

terms.

In addition to these persons, two others, Angela

Adams and Kim Robinson, have filed consents to join the

lawsuit. However, they did not attend the settlement

hearing, nor did they provide affidavits explaining that

they consented to the proposed settlement. Accordingly,

the parties agree that the terms of the settlement will

not encompass their claims and will therefore in no way

compromise any claims that these individuals may have

under the FLSA.

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agreement, the court concludes that the settlement is a

fair and reasonable resolution of these bona-fide

disputes.2

 

Pursuant to the settlement, USA Travel Centers will

tender a cash payment in the amount of $ 15,000 and the

court will enter a consent judgment against USA Travel

Centers in the amount of $ 54,000, with the result that

the total value of the settlement will equal $ 69,000.

With respect to the initial payment of $ 15,000,

$ 6,000 will be deducted for attorney’s fees and $ 350

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will be deducted for costs, leaving a cash balance of

$ 8,650. From this amount, payments totaling $ 4,415.24

will be made to those recipients who did not receive

those back wages that the Department of Labor determined

were owed to them pursuant to its 2009 investigation of

the defendants. The remaining balance of $ 4,234.76 will

be equitably distributed among the recipients as follows.

First, plaintiffs’ counsel will determine how much each

recipient is owed under the FLSA’s three-year statute of

limitations. Second, counsel will divide this amount by

the total amount owed to all of the recipients, with the

result that, for each recipient, counsel will calculate

a percentage of the total amount that is owed to that

recipient. Third, for each recipient, this percentage

will be multiplied by the remaining cash balance in order

to arrive at an equitable distribution. 

Upon enforcement of the $ 54,000 consent judgment,

$ 21,600 will be deducted for attorney’s fees and the

remaining balance will likewise be equitably distributed

among the recipients.

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Pursuant to the settlement, the case is to be

dismissed in all other respects. 

An appropriate judgment will be entered.

DONE, this the 10th day of May, 2011.

 /s/ Myron H. Thompson 

UNITED STATES DISTRICT JUDGE

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