UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF INDIANA

ANDY BEACHY, )

)

Plaintiff, )

)

v. ) CAUSE NO.: 3:15-CV-184-TLS

)

RELIANCE CONSTRUCTION, INC. and )

LEVI BEACHY, )

)

Defendants. )

OPINION AND ORDER

This matter is before the Court on a joint motion by the Plaintiff, Andy Beachy, and the

Defendants, Reliance Construction, Inc., and Levi Beachy. On November 3, 2015, the parties

filed a Joint Motion to Approve Confidential Settlement and Dismiss Lawsuit With Prejudice

[ECF No. 16], and a Joint Motion to File and Maintain Confidential Settlement and Release

Agreement Under Seal [ECF No. 14].

BACKGROUND

On April 28, 2015, the Plaintiff filed a complaint [ECF No. 1] against the Defendants

under the Fair Labor Standards Act (“FLSA”) seeking to recover overtime wages that the

Plaintiff alleged were owed to him. On June 19, 2015, the Defendants filed an answer [ECF No.

9] contesting that the Plaintiff was owed any overtime wages. The Plaintiff alleged that the

Defendants violated the FLSA when they paid him at the regular rate of pay for all hours worked,

even though the Plaintiff regularly worked in excess of forty hours per week.

The Court has reviewed the Confidential Settlement and Release Agreement [ECF No.

15], which was filed under seal for this Court’s in camera review. The Settlement Agreement sets
forth the parties’ agreements with respect their claims against each other.

ANALYSIS

Stipulated settlements in an FLSA case for the recovery of unpaid overtime compensation

must be approved by the Court in the absence of direct supervision by the Secretary of Labor. See

29 U.S.C. § 216(c). The governing provision provides:

The Secretary is authorized to supervise the payment of the unpaid minimum

wages or the unpaid overtime compensation owing to any employee or employees

under section 206 or section 207 of this title, and the agreement of any employee

to accept such payment shall upon payment in full constitute a waiver by such

employee of any right he may have under subsection (b) of this section to such

unpaid minimum wages or unpaid overtime compensation and an additional equal

amount as liquidated damages.

Id. “[T]he Fair Labor Standards Act is designed to prevent consenting adults from transacting

about minimum wages and overtime pay.” Walton v. United Consumers Club, Inc., 786 F.2d 303,

306 (7th Cir. 1986). But “[s]ection 16(c) creates the possibility of a settlement, supervised by the

Secretary to prevent subversion, yet effective to keep out of court disputes that can be

compromised honestly.” Id. Because the Secretary has not supervised this settlement, the Court

must approve it.

“To determine the fairness of a settlement under the FLSA, the court must consider

whether the agreement reflects a reasonable compromise of disputed issues rather than a mere

waiver of statutory rights brought about by an employer’s overreaching.” Burkholder v. City of

Fort Wayne, 750 F. Supp. 2d 990, 994–95 (N.D. Ind. 2010) (citations, brackets, and quotation

marks omitted). The reviewing Court normally approves a settlement where it is based on

“contentious arm’s-length negotiations, which were undertaken in good faith by counsel” and

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where “serious questions of law and fact exist such that the value of an immediate recovery

outweighs the mere possibility of further relief after protracted and expensive litigation.” Id.

(quoting Reyes v. Buddha–Bar NYC, No. 08 CV 2494(DF), 2009 WL 5841177, at *3 (S.D.N.Y.

May 28, 2009)) (additional citation and quotation marks omitted). 

The Plaintiff alleges that the Defendants failed to comply with the overtime provision

when they required the Plaintiff, as a nonexempt employee, to work in excess of forty hours per

week. The Defendants have denied any wrongdoing. Serious questions of law exist surrounding

whether the Plaintiff qualifies as an employee or an independent contractor during the time he

provided services to the Defendants. In light of these issues, the value of an immediate recovery

outweighs the mere possibility of further relief after litigating the matter further at the trial court

level. The litigation has not yet reached the expensive realm of dispositive motions or trial, and

the parties indicated they would incur further expense and risk on appeal.

Additionally, the parties are represented by counsel, who have negotiated in good faith

and at arm’s length.

Finding that the settlement is fair and reasonable, and “reflects a reasonable compromise

of disputed issues,” Burkholder, 750 F. Supp. 2d at 995, the Court approves the Confidential

Settlement and Release Agreement.

The Court also finds that the agreement’s confidentiality is a material term in the parties’

Confidential Settlement and Release Agreement, which the parties would have otherwise

executed as a private, confidential settlement agreement.

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CONCLUSION

For the reasons stated above, the Court GRANTS the parties’ Joint Motion [ECF No. 16]

and approves the Confidential Settlement and Release Agreement [ECF No. 15]. The Court also

GRANTS the Joint Motion to File and Maintain Confidential Settlement and Release Agreement

Under Seal.

SO ORDERED on November 6, 2015.

 s/ Theresa L. Springmann 

THERESA L. SPRINGMANN

UNITED STATES DISTRICT COURT

FORT WAYNE DIVISION

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