UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

DANIEL BROWN,

NATHANEAL BLACKBURN, Case No. 14-14158

and TIMOTHY MINER,

on behalf of themselves Paul D. Borman

and all others similarly situated, United States District Judge

Plaintiffs,

v. Mona K. Majzoub

United States Magistrate Judge

AK LAWNCARE, INC., and

ADAM KAROUB,

Defendants.

___________________________/

OPINION AND ORDER GRANTING RENEWED JOINT MOTION

FOR APPROVAL OF SETTLEMENT (ECF NO. 38)

Before the Court is the parties’ Renewed Joint Motion for Approval of Settlement in

this Fair Labor Standards Act putative collective action. (ECF No. 38.) The Court has

determined that oral argument is not necessary for proper resolution of this motion and will

resolve the matter on the parties’ written submissions. E.D. Mich. L. R. 7.1(f)(2). 

I. BACKGROUND

Plaintiffs, manual laborers who provided lawn maintenance and snow removal

services for the Defendants, filed this putative collective action on October 28, 2014,

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claiming that Defendants violated the Fair Labor Standards Act (“FLSA”), 29 U.S.C.

§ 201 et seq., by failing to pay them, and similarly situated individuals, one and onehalf times their regular rates of pay for hours worked over 40 per week. (ECF No. 1,

Complaint ¶¶ 1-3.) On October 14, 2015, this Court entered an Order conditionally

certifying the action as a collective action under the FLSA, 29 U.S.C. § 216(b). (ECF

No. 23, Opinion and Order Granting Conditional Certification and Requiring

Submission of Revised Proposed Notice.) On March 16, 2016, after receiving

Plaintiffs’ revised proposed notices, the Court issued an Order approving the notice

of lawsuit with opportunity to join in and permitting dissemination of the notice. 

(ECF No. 30, Order Approving the Notice of Lawsuit With Opportunity to Join In.) 

On June 2, 2016, Plaintiffs filed a Notice of Filing of Consents, informing the Court

that only three individuals had elected to opt-in to the putative collective action. (ECF

No. 31, Plaintiffs’ June 2, 2016 Notice of Filing of Consents.)

On November 16, 2016, there having been no activity in the case since the June

2, 2016 Filing of Consents, the Court issued a Notice to Appear for a status conference

on December 12, 2016. At that status conference, Plaintiffs’ counsel informed the

Court that Plaintiffs were still waiting to receive time records from the Defendants for

the three named Plaintiffs and the three opt-ins so that they could begin to assess the

damages. The Court gave the parties 60 days to sort out the time records and

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scheduled another status conference for February 14, 2017. At the February 14, 2017

status conference, it appeared that little progress had made with regard to the time

records and the Court instructed the Plaintiff to prioritize this matter, to be diligent

about resolving this three-year old case, and to report back to the Court within 60 days

with evidence of their efforts or face dismissal of this action for failure to prosecute. 

(ECF No. 34, Order Regarding the Court’s Instructions to the Parties at the February

14, 2017 Status Conference.)

The parties have now agreed to a resolution of Plaintiffs’ claims and seek Court

approval of their proposed Settlement Agreement. (ECF No. 38-2, Settlement

Agreement and Release.) Because the Plaintiffs’ claims presented a bona fide legal

dispute regarding compensation for their overtime work, and because the proposed

Settlement Agreement represents a fair and reasonable resolution of those claims, the

Court GRANTS the joint motion for approval of settlement.

II. LEGAL STANDARD

“The FLSA was enacted for the purpose of protecting workers from

substandard wages and oppressive working hours.” Lynn’s Food Stores, Inc. v. United

States, 679 F.2d 1350, 1352 (11th Cir. 1982)). “Recognizing that there are often great

inequalities in bargaining power between employers and employees, Congress made

the FLSA’s provisions mandatory; thus, the provisions are not subject to negotiation

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or bargaining between employers and employees.” Id. Thus, “an employee may not

waive or otherwise settle a FLSA claim for unpaid wages for less than the full

statutory damages unless the settlement is supervised by the Secretary of Labor or

made pursuant to a judicially supervised stipulated settlement.” Wolinsky v.

Scholastic Inc., 900 F. Supp. 2d 332, 335 (S.D.N.Y. 2012). 

Settlements of FLSA claims that are reached in the context of litigation, where

“[t]he employees are likely to be represented by an attorney who can protect their

rights under the statute,” are proper subjects for judicial review and possible approval

because they are “more likely to reflect a reasonable compromise of disputed issues

than a mere waiver of statutory rights brought about by an employer’s overreaching.” 

Lynn’s, 679 F.2d at 1354. “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. (alterations

added).

“In reviewing a settlement of an FLSA private claim, a court must scrutinize the

proposed settlement for fairness, and determine whether the settlement is a fair and

reasonable resolution of a bona fide dispute over FLSA provisions.” Williams v. K&K

Assisted Living LLC, No. 15-cv-11565, 2016 WL 319596, at *1 (E.D. Mich. Jan. 27,

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2016) (internal quotation marks and citations omitted). In determining whether a

proposed settlement is fair and reasonable, the court considers several factors:

(1) the plaintiff’s range of possible recovery; (2) the extent to which the

settlement will enable the parties to avoid anticipated burdens and

expenses in establishing their respective claims and defenses; (3) the

seriousness of the litigation risks faced by the parties; (4) whether the

settlement agreement is the product of arm’s-length bargaining between

experienced counsel; (5) and the possibility of fraud or collusion.

Wolinsky, 900 F. Supp. 2d at 335 (internal quotation marks and citations omitted). See

also Williams v. Alimar Security, Inc., No. 13-cv-12732, 2017 WL 427727, at *2-3

(E.D. Mich. Feb. 1, 2017) (citing Wolinsky and analyzing these same factors to

conclude that proposed FLSA settlement agreement was fair and reasonable). “A

district court may choose to consider only factors that are relevant to the settlement

at hand.” Snook v. Valley OB-Gyn Clinic, P.C., No. 14-cv-12302, 2015 WL 144400,

at *1 (E.D. Mich. Jan. 12, 2015). “Where a proposed settlement of FLSA claims

includes the payment of attorneys’ fees, the must also assess the reasonableness of the

fee award.” Wolinsky, 900 F. Supp. 2d at 336.

III. ANALYSIS

In this case, there was a bona fide FLSA dispute over whether Plaintiffs’ were

entitled to the overtime compensation they seek. If this case were to proceed to trial,

Defendants would take the position that Plaintiffs were paid for all of the hours they

actually worked and would dispute Plaintiffs’ estimates of their hours. Additionally,

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in response to the 64 opt-in notices that were purportedly mailed, only three

employees opted to join the putative collective action and two of those three were

unable to demonstrate any overtime hours. (ECF No. 38, Mot. at 1, PgID 292, Ex.

2, Attorney Time Records and Costs, PgID 319.) 

The parties have agreed to a total settlement amount of $30,000.00, payable to

Plaintiffs’ counsel in three equal monthly installments commencing on the first day

of the month immediately following the Court’s approval of the Settlement

Agreement. (ECF No. 38, Ex. 1, Settlement Agreement ¶ 2.) From this amount,

Plaintiffs’ counsel will recover $11,755.39 in attorneys’ fees and $611.52 in costs. 

The net settlement proceeds to the Plaintiffs of $17,633.09 represents the following

for each of the three named Plaintiffs and opt-in Thompson, distributed based upon

the total number of hours worked by each: Daniel Brown: $11,859.74; Timothy

Miner: $4,127.98; Nathaniel Blackburn: $1,481.56; and Frank Thompson: $163.81. 

The parties represent that the total amount of actual damages that Plaintiffs could have

recovered at trial based on their testimony would have been $24,220.00 and that the

maximum amount of liquidated damages which might have been recovered if

Plaintiffs had been able to establish the full measure of their actual damages would

have been $24,220.00, for a total possible best case recovery of $48,440.00. Thus,

the $30,000.00 recovery represents approximately 60% of the total amount of

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damages Plaintiffs could have recovered at trial had they prevailed on every issue. 

Given that Defendants robustly denied the correctness of the number of overtime

hours reported by the Plaintiffs, and were prepared to dispute these characterizations

at trial, the recovery bears a reasonable relation to Plaintiffs’ real potential recovery

and eliminates completely the cost burdens and potential unfavorable results of a trial. 

As both parties were represented by experienced employment law counsel, and the

Court has no grounds to suspect fraud or collusion, the settlement of Plaintiffs’ claims

appears fair and reasonable and promotes the policy of encouraging settlement of

litigation.

Finally, the Court must assess the reasonableness of Plaintiffs’ counsel’s

requested attorney fee award. Plaintiffs attach the relevant attorney billing records,

which document that Plaintiffs’ attorneys have incurred $15,172.50 in fees for the

work they have performed on this case, not including preparation of the approval

motion and other related settlement work. (ECF No. 38, Mot. at 4, PgID 295; Ex. 2,

Attorney Time Records and Costs.) The parties represent in their joint motion that the

retainer agreement executed by the named Plaintiffs called for reimbursement of costs

and an attorneys’ fee of “40% of the net recovery” in the event that resolution

occurred more than 15 months after the date of filing the Complaint. (ECF No. 38,

Mot. at 4, PgID 295.) The parties further define the “net settlement” as the amount

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remaining after deduction of attorney fees and costs. (ECF No. 38, Mot. at 3, PgID

294.) Although this characterization of the fee arrangement causes some confusion,

the math suggests that the attorney fee award of $11,755.39 actually represents 40%

of the “total settlement amount minus costs ($611.52),” i.e. $30,000.00 - $611.52 =

$29,388.48, and $29,388.48 x .40 = $11,755.39. Although the parties have not

produced the relevant retainer agreement, the parties have agreed to the breakdown

of the settlement amount in submitting their joint request for approval, and the Court

assumes that the attorneys’ fee award is consistent with the terms of the retainer

agreement. The attorneys’ fee award is less than the $15,172.50 actually incurred by

Plaintiffs’ counsel. See Williams, 2016 WL 319596, at *2 (noting that courts in this

district have approved FLSA settlements where the attorneys’ fees were “slightly

greater” than the plaintiff’s recovery). 

The Court finds that Plaintiffs’ counsel’s attorney fee award representing

approximately 40% of the total settlement amount, a formula that was disclosed to the

named Plaintiffs in the retainer agreement they executed, is reasonable for the work

performed and the result obtained. 

IV. CONCLUSION

For the foregoing reasons, the Court GRANTS the Renewed Joint Motion for

Approval of Settlement and APPROVES the Settlement Agreement as a fair and

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reasonable resolution of a bona fide FLSA dispute. 

According to the parties’ request, the Court will enter an Order of Dismissal of

this action WITH PREJUDICE upon Plaintiffs’ counsel’s notice to the Court of

receipt of the settlement funds, which shall occur on or before August 28, 2017, per

the terms of paragraph 2 of the Settlement Agreement. (Settlement Agreement, ¶ 2,

PgID 306.)

IT IS SO ORDERED.

s/Paul D. Borman 

PAUL D. BORMAN

UNITED STATES DISTRICT JUDGE

Dated: May 11, 2017

CERTIFICATE OF SERVICE

The undersigned certifies that a copy of the foregoing order was served upon each

attorney or party of record herein by electronic means or first class U.S. mail on May

11, 2017.

s/Deborah Tofil 

Case Manager

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