Source: http://ks.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20180731_0001110.DKS.htm/qx
Timestamp: 2019-04-25 18:08:55+00:00

Document:
Plaintiff Ashley Foster, individually and on behalf of other similarly situated persons, filed this lawsuit against defendant Robert Brogden's Olathe Buick GMC, Inc. She alleges that defendant violated the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq. and the Kansas Wage Payment Act (“KWPA”), Kan. Stat. Ann. § 44-312 et seq. Doc. 1. The parties have agreed on a class-wide settlement. They now ask the court to grant preliminary approval of their collective action settlement. Doc. 37. For reasons explained below, the court respectfully declines the parties' request.
Plaintiff alleges that defendant failed to pay her and the putative class members fully and fairly because of an automatic pay deduction protocol. Plaintiff says this pay deduction protocol deducted 30 minutes from every hourly employee's daily pay record even if the employee did not take a lunch break. Defendant denies these allegations.
The court assigned this matter to mediation, and on November 21, 2017, the parties engaged in that process before Mr. Joseph Eischens. The parties reached an agreement in principle on the FLSA collective action claim at mediation. And plaintiff stipulated to dismiss the KWPA claim without prejudice. On January 28, 2018, the parties reached a proposed settlement agreement.
1. Defendant will pay $12, 000 plus the costs of mediation into a settlement fund to be held in escrow by the settlement administrator for payment to the putative class members who opt-in.
2. The payments to class members will be based on automatic deductions for lunch breaks assessed against each class member from March 1-December 31, 2016.
3. Defendant will not discharge or discriminate against any current or former employee who is a member of the settlement class.
4. At least 10 days before the final fairness hearing, plaintiffs' counsel will apply to the court for an attorneys' fee award to be paid from and not to exceed one-third of the settlement payment. Also, plaintiffs' counsel will ask the court to order reimbursement for their reasonable out-of-pocket litigation costs and expenses.
Now, the parties seek the court's preliminary approval of their collective action settlement.
The parties to an FLSA action must present a putative settlement of those claims to the court for review, and the court must determine whether the settlement is fair and reasonable. Barbosa v. Nat'l Beef Packing Co., LLC., No. 12-2311-KHV, 2015 WL 4920292, at *3 (D. Kan. Aug. 18, 2015) (citing Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350, 1353 (11th Cir. 1982)). “To approve an FLSA settlement, the Court must find that the litigation involves a bona fide dispute and that the proposed settlement is fair and equitable to all parties concerned.” Id. (citing Lynn's Food Stores, Inc., 679 F.2d at 1353). Also, when parties settle FLSA claims before the court has made a final certification ruling, the court must make some final class certification findings before it can approve an FLSA collective action settlement. Id. (citing McCaffrey v. Mortg. Sources, Corp., No. 08-2660-KHV, 2011 WL 32436, at *2 (D. Kan. Jan. 5, 2011)).
In the following three sections, the court discusses collective action certification, the fairness and reasonableness of the proposed settlement agreement, and the fairness and reasonableness of the proposed service payment to plaintiff. Ultimately, the parties have presented the court insufficient evidence to make rulings on these issues so, on the current record, the court cannot preliminarily approve the parties' collective action settlement.
Under § 216(b) of the FLSA, a group of employees may bring claims against their employer on behalf of employees who are “similarly situated” to plaintiffs. 29 U.S.C. § 216(b). Unlike class actions under Fed.R.Civ.P. 23, “[n]o employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought.” Id. In other words, putative class members who wish to join this lawsuit must affirmatively opt-in.
Section 216(b) does not define the term “similarly situated.” But, the Tenth Circuit has approved a two-step approach for determining whether plaintiffs in a proposed opt-in collective action are “similarly situated” for purposes of § 216(b). Thiessen v. Gen. Elec. Capital Corp., 267 F.3d 1095, 1105 (10th Cir. 2001). Under this approach, a court makes an initial “notice stage” determination about the similarly-situated requirement. Id. at 1102. “That is, the court determines whether a collective action should be certified for purposes of sending notice of the action to potential class members.” In re Bank of Am. Wage & Hour Emp't Litig., 286 F.R.D. 572, 576 (D. Kan. 2012). The court must certify the case conditionally as a collective action before plaintiffs may send notice to putative class members of their right to opt-in. Folger v. Medicalodges, Inc., No. 13-1203-MLB, 2014 WL 2885363, at *2 (D. Kan. June 25, 2014).
For conditional certification at the notice stage, courts “‘require nothing more than substantial allegations that the putative class members were together the victims of a single decision, policy, or plan.'” Thiessen, 267 F.3d at 1102 (quoting Vaszlavik v. Storage Tech. Corp., 175 F.R.D. 672, 678 (D. Colo. 1997)). As a result, the standard for certification at the notice stage is a lenient one and typically results in certification. In re Bank of Am. Wage & Hour Emp't Litig., 286 F.R.D. at 576.
The second stage, or final certification, comes after the parties have completed discovery. Thiessen, 267 F.3d at 1102-03; Folger, 2014 WL 2885363, at *2. At this stage, courts apply a stricter standard to the similarly-situated requirement. Thiessen, 267 F.3d at 1102-03. During final certification, the court considers: “(1) the disparate factual and employment settings of individual plaintiffs; (2) various defenses available to defendant which appear to be individual to each plaintiff; and (3) fairness and procedural considerations.” Grove v. ZW Tech, Inc., No. 11-2445-KHV, 2012 WL 1789100, at *4 (D. Kan. May 17, 2012) (citing Thiessen, 267 F.3d at 1103) (other citation omitted). Importantly, before the court can approve a proposed FLSA collective action settlement, it must make a final certification ruling. Barbosa, 2015 WL 4920292, at *3 (citing McCaffrey, 2011 WL 32436, at *3).

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