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Vedol v. Leading Health Care of Louisiana Inc.

United States District Court, W.D. Louisiana

September 7, 2017

VEDOL
v.
LEADING HEALTH CARE OF LOUISIANA INC

          REBECCA F. DOHERTY JUDGE.

          REPORT AND RECOMMENDATION

          CAROL B. WHITEHURST UNITED STATES MAGISTRATE JUDGE.

         Before the Court on referral from the District Judge is a Joint Motion for Settlement Approval and to Dismiss [Rec. Doc. 53] following a settlement in this case which has been conditionally certified as a collective action under Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201, et seq. Under the proposed Settlement Agreement, Plaintiffs Kristain Areana Vedol and Beverly Salter, and all the opt-in Plaintiffs, will receive a pro rata share in back pay equivalent to a certain percentage of the back pay in dispute, described in detail in the Settlement Agreement and Release.[1] As described in the Settlement Agreement and Release, Kristain Areana Vedol will be paid a fee for her efforts in prosecuting this case out of the Gross Settlement Amount and Attorney Kenneth D. St. Pe' will be paid Attorney's fees in the percentage stated out of the Gross Settlement Amount. The action will be dismissed with prejudice and except as provided in the proposed settlement agreement, each party will bear its own attorney's fees and costs. For the following reasons, it is recommended that the Joint Motion for Settlement Approval and to Dismiss the Collective Action With Prejudice [Rec. Doc. 53] be GRANTED.

         BACKGROUND

         Defendant is a home health services provider who employed Plaintiffs at various times as home health workers, also known as Direct Service Workers (DSWs). Generally, DSWs work with individuals with special needs to provide services and assistance with daily living. R. 53. For years, persons performing the duties of a DSW were considered exempt from the overtime requirements of the FLSA. An amendment to the Home Healthcare Exemption to the FLSA in January 1, 2015 arguably changed that exemption. Id.

         Plaintiffs Kristain Areana Vedol [“Vedol”] and Plaintiff Beverly Salter [“Salter”] held the DSW position from April 2015 to October 28, 2015, and from October 1, 2009 to present, respectively. Vedol, individually and on behalf of others similarly situated, filed a collective action on November 11, 2015 in this Court, alleging violations of the FLSA. She specifically alleged that Defendant improperly classified her and others similarly situated as exempt employees who were not required overtime compensation pursuant to the FLSA. R. 1. This Court conditionally certified the class pursuant to 29 USC § 216(b) on August 29, 2016. R. 15. The conditionally certified class consisted of all current and former DSWs who were classified as exempt at any time between January 1, 2015 and November 8, 2015. R. 53.

         On March 22, 2016, Plaintiff, Beverly Salter filed a FLSA Collective Action and Rule 23 Class Action against Leading Health Care of LA, Inc. in the 14th Judicial District Court, Parish of Calcasieu, State of Louisiana, alleging FLSA and various state law claims. Salter's claim was removed to Federal Court on April 11, 2016. On June 13, 2016, this Court, dismissed the state law claims and the Rule 23 Class Action, leaving only the FLSA Collective Action. On December 12, 2016, the Vedol and Salter cases were consolidated. R. 39. On August 4, 2017, the parties filed a Joint Motion for Settlement Approval and to Dismiss [Rec. Doc. 53] following a settlement in this case.

         LAW AND ANALYSIS

         Because this case has been conditionally certified as a collective action under the FLSA, this Court must approve the settlement before it may be finalized. Legros v. Mud Control Equip., Co., No. CV 15-1082, 2017 WL 925730, at 1 (W.D. La. Mar. 6, 2017) (citing Rivas v. Beaucoup Crawfish of Eunice, Inc., 2014 WL 5488390, *2 (W.D. La. 2014), Brooklyn Sav. Bank v. Oneil, 324 U.S. 697 (1945); Camp v. Progressive Corp., 2004 WL 2149079 (E.D. La. 2004); and Liger v. New Orleans Hornets NBA Limited Partnership. 2009 WL 2856246 (E.D. La. 2009)). Before the Court may approve a settlement in a collective action brought under the FLSA, it must first determine whether the settlement involves the resolution of a bona fide dispute over an FLSA provision and then decide whether the settlement is fair and reasonable. Id. (citing Camp at 4); see also Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350, 1352-55 (11th Cir. 1982), Jarrad v. Southern Shipbldg. Corp., 163 F.2d 960 (5th Cir. 1947); and Stalnaker v. Novar Corp., 293 F.Supp.2d 1260, 1263 (M.D. Ala. 2003).

         In the instant case, the Parties vigorously dispute (1) whether Plaintiffs were properly classified as exempt employees, (2) whether Plaintiffs were entitled to statutorily mandated overtime and (3) whether Vedol and Salter and any opt-in Plaintiffs are “similarly situated” under the applicable law. Thus, the Court finds the instant action presents a bona fide dispute over FLSA provisions because these issues are sufficient for this Court to find "that genuine uncertainty as to the outcome existed" for each side. Id. at 2.

         In determining whether a settlement is fair, adequate and reasonable, the Court should consider the following six factors: (1) the existence of fraud or collusion behind the settlement; (2) the complexity, expense, and likely duration of the litigation; (3) the stage of the proceedings and the amount of discovery completed; (4) the probability of plaintiffs' success on the merits; (5) the range of possible recovery; and (6) the opinions of the class counsel, class representatives, and absent class members. Id. citing Reed v. General Motors Corp., 703 F.2d 170, 172 (5th Cir. 1983) citing Parker v. Anderson, 667 F.2d 1204, 1209 (5th Cir. 1982). When considering these factors, the court should keep in mind the “strong presumption” in favor of finding a settlement fair. Id.

         The Court will address each of the Six Factors in turn:

(1) The Existence of Fraud or Collusion Behind the Settlement - The parties have represented to the Court that there is no fraud or collusion behind the settlement. R. 53, p. 6. In addition, this Court may presume that no fraud or collusion occurred between counsel, in the absence of any evidence to the contrary. Camp, 2004 WL 2149079 at 7 citing 4 Newberg on Class Actions § 11.51 (4th ed.); Liger, 2009 WL 2856246 at 3. Moreover, since this case was filed in 2015, counsel for the parties have vigorously represented and advanced the position of their clients, engaging in sufficient informal discovery and ample investigation, and competently addressing the issues presented in this litigation. Furthermore, given the Court's active role in overseeing this litigation and the attendance by the parties at court ordered conferences on April 25, 2017 and July 31, 2017, which culminated in the proposed Settlement Agreement, it is clear that the settlement has been arrived at by arms-length bargaining and good faith negotiations. Thus, the first factor favors approval of the settlement as fair, adequate and reasonable.
(2) The Complexity, Expense, and Likely Duration of the Litigation - This FLSA action presented multiple complex legal issues which have been vigorously litigated by experienced counsel, at significant expense. Had a settlement not been consummated, the Court is of the opinion that this case would likely have remained in litigation for a significant amount of time, causing the parties to incur significant additional expense. The parties and the Court recognize the expense of bringing and defending against a motion for decertification, and the expense and length and of trial and appeals, which could take several years. Accordingly, the second factor weighs heavily in favor of finding that the settlement is fair, adequate and reasonable. (3) The Stage of the Proceedings and the Amount of Discovery Completed -This case has been pending nearly two years. During its pendency, the parties have conducted informal discovery, and independent investigations of fact and law throughout this action. Further, counsel for Plaintiffs and Defendant have analyzed the applicable law as applied to the facts discovered regarding Plaintiffs' allegations, Defendant's defenses thereto, and the damages claimed by Plaintiffs. The agreement to settle did not occur until the Parties had engaged in such activities. Counsel for the ...

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