United States Court of Appeals

For the Eighth Circuit

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No. 18-2255

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Paulette Barbee, Administrator of the Estate of Kimberly Hope Gillock

lllllllllllllllllllllPlaintiff - Appellant

v.

Big River Steel, LLC

lllllllllllllllllllllDefendant - Appellee

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Appeal from United States District Court

for the Eastern District of Arkansas - Jonesboro Division

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Submitted: April 19, 2019

Filed: June 20, 2019

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Before SHEPHERD, MELLOY, and GRASZ, Circuit Judges.

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GRASZ, Circuit Judge.

Paulette Barbee, Administrator of the Estate of Kimberly Hope Gillock

(formerly known as Kim Pierce), appeals the district court’s order modifying the

attorney fees in the parties’ settlement agreement. Because the district court lacked

authority to review the settled attorney fees, we vacate that portion of its judgment.
I. Background

Kim Pierce filed a proposed class action against Big River Steel, LLC (“Big

River Steel”) for unpaid overtime wages. She asserted claims under both the Fair

Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201–219, and the Arkansas Minimum

Wage Act, Ark. Code Ann. §§ 11-4-201 to -222.

Pierce and Big River Steel reached a settlement and filed a joint status report

notifying the court they had settled and would soon file a voluntary dismissal. The

court ordered the partiesto submit the settlementfor approval, including the proposed

agreement and any attorney billing records. The parties complied.

After reviewing the parties’ settlement agreement, the district court

disapproved of both the settlement of the wage claims and the settled amount of

attorney fees for independent reasons. Pierce passed away shortly thereafter, and the

court stayed the case until it could substitute her estate for her as a party.

Barbee, as the estate’s administrator, and Big River Steel submitted a new

agreement addressing only the district court’s concerns on the wage settlement. The

district court then approved of the new wage settlement, again disapproved of the

amount of attorney fees, and entered a judgment with the full wage settlement amount

and a reduced attorney fee amount. Barbee appeals, and Big River Steel does not

contest the appeal.

II. Analysis

Barbee argues on appeal that any required review of the settlement agreement

did not extend to settled attorney fees. We recently addressed the standard of review

for settled attorney fees under the assumption that district courts have authority to

review them. See Melgar v. OK Foods, 902 F.3d 775, 779 (8th Cir. 2018). Barbee

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asks a question we left open in Melgar: whether the authority to review FLSA

settlements, or at least review settled attorney fees, exists at all.

There is a circuit split on whether to extend older Supreme Court cases so as

to require judicial approval of all FLSA settlements. A pair of cases from the 1940s

require judicial approval for some releases of FLSA claims, but those cases left open

the question of whether the FLSA requires judicial approval to settle bona fide

disputes over hours worked or wages owed. See D.A. Schulte, Inc., v. Gangi, 328

U.S. 108, 114 & n.10 (1946); Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 703–04,

714 (1945). The Fifth Circuit would not extend Gangi and O’Neil to require judicial

approval of all FLSA settlements, but the Second and Eleventh Circuits disagree. 

Compare Martin v. Spring Break ’83 Prods., LLC, 688 F.3d 247, 255 (5th Cir. 2012)

(enforcing a settlement of bona fide FLSA disputes over hours worked or wages owed

without judicial or Department of Labor approval), with Cheeks v. Freeport Pancake

House, Inc., 796 F.3d 199, 206 (2d Cir. 2015) (holding parties cannot settle FLSA

claims without approval from the district court or the Department of Labor), and

Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350, 1352–53 (11th Cir. 1982)

(same). See also Martinez v. Bohls Bearing Equip. Co., 361 F. Supp. 2d 608, 618–31

(W.D. Tex. 2005) (extensively reviewing the history behind this statutory

interpretation dispute).

We have never taken a side on thisissue. We have noted the Eleventh Circuit’s

opinion, see Beauford v. ActionLink, LLC, 781 F.3d 396, 405–06 (8th Cir. 2015);

Copeland v. ABB, Inc., 521 F.3d 1010, 1014 (8th Cir. 2008), but we have never had

occasion to interpret whether 29 U.S.C. § 216 requires judicial approval of all FLSA

settlements.

Because we agree with Barbee that any authority for judicial approval of FLSA

settlements in 29 U.S.C. § 216 does not extend to review of settled attorney fees, we

need not decide our view on the circuit split today. This is a question of law, and we

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review the issue de novo. Melgar, 902 F.3d at 778. The statute speaks of allowing

fees “in addition to any judgment awarded,” treating the merits of an FLSA claim and

the attorney fees as distinct. See 29 U.S.C. § 216(b). As a result, any court judgment

on the settled merits would necessarily be separate from any court review of the

settled attorney fees. Thisreading of the statute is consistent with the rationale of the

circuits that require approval for all FLSA settlements because such approval serves

the “FLSA’s underlying purpose” of protecting workers’ rights. Cheeks, 796 F.3d at

206. When the parties negotiate the reasonable fee amount separately and without

regard to the plaintiff’s FLSA claim, the amount the employer paysto the employees’

counsel has no bearing on whether the employer has adequately paid its employees

in a settlement. See Bench v. Cheyenne Logistics, LLC, No. 4:14CV1327, 2016 WL

2997591, at *3 (E.D. Mo. May 25, 2016) (“The Court’s review of a proposed FLSA

settlement is properly limited only to those terms precisely addressing the

compromised monetary amounts to resolve pending wage and overtime claims.”

(quoting King v. Raineri Constr., LLC, No. 4:14CV1828, 2015 WL 631253, at *4

(E.D. Mo. Feb. 12, 2015))). Thus, regardless of whether we read the statute as

requiring approval for FLSA settlements, we do not read it as requiring approval of

settled attorney fees.

Since we conclude 29 U.S.C. § 216 does not require approval of settled

attorney fees, the district court erred below. “In ordinary litigation, that is, lawsuits

between private parties, courtsrecognize thatsettlement of the dispute issolely in the

hands of the parties.” Gardiner v. A.H. Robins Co., 747 F.2d 1180, 1189 (8th Cir.

1984). When all parties to a case sign a dismissal, that dismissal is effective unless

federal law provides otherwise. Fed. R. Civ. P. 41(a)(1)(A)(ii). This right to

dismissal is an “unconditional right.” Gardiner, 747 F.2d at 1190. We also value this

right in the attorney fee context because it prevents unnecessary litigation. See

Hensley v. Eckerhart, 461 U.S. 424, 437 (1983) (“Ideally, of course, litigants will

settle the amount of a fee.”). Here, the district court agreed the parties’ proposed

wage settlement satisfied Barbee’s claims. Regardless of whether that assertion of

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authority was proper, the district court’s authority did not extend beyond concluding

the merits settlement was satisfactory. The parties were entitled to settle the attorney

fee issue, and no law gave the district court authority to interfere with that

unconditional right.

1

Accordingly, we vacate the portion of the district court’s judgment below that

addressed settled attorney fees. We decline Barbee’s request to remand for entry of

judgment on the full fee amount because the district court lacks authority under Fed.

R. Civ. P. 41 to take any action on the settled attorney fees.

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1We note that if FLSA settlements are subject to judicial review, the court

would retain the authority to ensure the attorney fees were in fact negotiated

separately and without regard to the plaintiff’s FLSA claim, and there was no conflict

of interest between the attorney and his or her client.

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