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Rosa v. Gulfcoast Wireless, Inc.

United States District Court, E.D. Louisiana

December 3, 2018

DAVID ROSA
v.
GULFCOAST WIRELESS, INC.

         SECTION “R” (2)

          ORDER AND REASONS

          SARAH S. VANCE UNITED STATES DISTRICT JUDGE

         Before the Court is the parties' joint motion for approval of a settlement agreement pursuant to 29 U.S.C. § 216(b).[1] Because the Court has determined that the settlement represents a fair and reasonable compromise of the disputed issues, the motion is granted.

         I. BACKGROUND

         Plaintiff David Rosa was employed by defendant Gulfcoast Wireless, Inc. as a sales representative and store operations manager from June 2015 to April 2018.[2] On May 2, 2018, plaintiff filed this lawsuit alleging that defendant willfully failed to pay him overtime compensation, in violation of the Fair Labor Standards Act (FLSA).[3] On November 9, 2018, the parties filed a joint motion for approval of a settlement and to dismiss plaintiff's claims with prejudice.[4]

         II. DISCUSSION

         An employee and employer can settle an FLSA claim for back wages if there is “a stipulated judgment entered by a court which has determined that a settlement proposed by an employer and employees . . . is a fair and reasonable resolution of a bona fide dispute over FLSA provisions.” Bodle v. TXL Mortg. Corp., 788 F.3d 159, 164 (5th Cir. 2015) (quoting Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350, 1355 (11th Cir. 1982)). Court approval of a settlement is necessary even when the FLSA action involves only a single employee plaintiff against his employer. See, e.g., Domingue v. Sun Elec. & Instrumentation, Inc., No. 09-682, 2010 WL 1688793 (M.D. La. Apr. 26, 2010).

         The Court finds that the parties' proposed settlement arises from a “bona fide dispute.” First, both parties are represented by counsel. The existence of a lawsuit with attorneys representing both parties does not automatically establish the presence of a bona fide dispute. See Collins v. Sanderson Farms, Inc., 658 F.Supp.2d 714, 720 (E.D. La. 2008). But a lawsuit with attorneys does indicate that the likelihood of a “pressured settlement” is low. See id.

         Second, the parties have been actively litigating this action prior to reaching a settlement agreement. The parties state that they have each undertaken discovery of plaintiff's time sheets and commission information in order to assess the extent of his damages and the strength of his claim.[5]The parties also engaged in two months of negotiations, including a settlement conference with the Magistrate Judge, and defendant filed an answer to plaintiff's complaint.[6] Defendant asserts eight defenses in its answer, including that plaintiff's complaint is time-barred under the FLSA, and that when adding plaintiff's commissions to his hourly wages, he has actually “earned more than what the FLSA requires.”[7] Because the parties have evidently scrutinized plaintiff's complaint, and because defendant has answered the complaint with plausible defenses, the Court finds that a bona fide dispute exists. Id. at 723 (finding that employer's defenses suggested there were “legitimate questions over coverage under FLSA, ” which supported a finding that there was a “bona fide dispute” that “justifie[d] settlement of the plaintiffs' claims”).

         The Court also finds that the proposed settlement is “fair and reasonable.” Federal Rule of Civil Procedure 23 does not control FLSA actions, but courts often use the analysis applicable to Rule 23 when determining whether a settlement is fair and reasonable. Id. at 721-22. Under Rule 23, courts consider six factors:

(1) [T]he 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 class counsel, class representatives and absent class members.

Id. at 722. While these six factors are more applicable to a collective action under FLSA than an action involving a single plaintiff, the Court will use them to guide ...


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