Aboumrad v. Borrego Springs Fire Protection District

• Court: District Court, S.D. California
• Decided: March 5, 2021
• Docket: 3:20-cv-00933
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 MIKE ABOUMRAD et al., Case No.: 20cv933-L-KSC

12 Plaintiffs, ORDER DENYING WITHOUT 13 v. PREJUDICE JOINT STIPULATION FOR APPROVAL OF SETTLEMENT 14 BORREGO SPRINGS FIRE AGREEMENT AND DISMISSAL OF PROTECTION DISTRICT, 15 CASE WITHOUT PREJUDICE Defendant. 16 (ECF NO. 11) 17

18 Pending before the Court in this collective action alleging violation of the Fair 19 Labor Standards Act, 29 U.S.C. § 201 et seq. (“FLSA”), is a Joint Stipulation for 20 Approval of Settlement Agreement and Dismissal of Case with Prejudice (ECF No. 11, 21 “Joint Motion”). For the reasons stated below, the Joint Motion is denied without 22 prejudice. 23 The action was filed pursuant to 29 U.S.C. § 216(b) by seventeen of Defendant’s 24 employees “on behalf of themselves and all similarly situated individuals.” (See ECF 25 No. 1, “Compl.,” at 2.) They alleged Defendant used an unlawful compensation 26 computation method which undercounted Plaintiffs’ “regular rate of pay.” (Id. at 2.) 27 This, in turn, resulted in an alleged violation of 29 U.S.C. § 207 by underpayment for 28 overtime. (Id.) Plaintiffs seek unpaid overtime with interest, an equal amount of 1 liquidated damages, and attorneys’ fees as provided by 29 U.S.C. § 216(b). (Id. at 13.) 2 They also request a finding that Defendant’s conduct was an intentional, knowing, and 3 willful FLSA violation so as to entitle them to a longer statute of limitations. (Id.) 4 Finally, they request injunctive relief ordering Defendants to change their compensation 5 policies. (Id.) The Court has jurisdiction pursuant to 28 U.S.C. § 1331. 6 The FLSA allows for a private action against an employer for violations of 29 7 U.S.C. § 207 “by any one or more employees for and in behalf of himself or themselves 8 and other employees similarly situated.” 29 U.S.C. § 216(b). However, “[n]o employee 9 shall be a party plaintiff to any such action unless he gives his consent in writing to 10 become such a party.” Id. 11 All seventeen employees listed in the complaint filed a Consent to Be Included as 12 an Individual Plaintiff. (ECF No. 3, “Consent.”) With the Joint Motion, the parties 13 request the Court to approve the Settlement Agreement and Release of Claims (ECF No. 14 11-3, “Settlement”) between Defendant on one hand, and the Borrego Springs 15 Firefighters Association (“Association”), Plaintiffs, and eight additional employees 16 (“Other Employees”) on the other hand. (See Settlement at 1; cf. Consent.) The Joint 17 Motion requests the Court to “approve the Settlement Agreement.” (Joint Motion at 9.) 18 “FLSA claims may not be settled without approval of either the Secretary of Labor or a 19 district court.” Seminiano v. Xyris Enter., Inc., 602 Fed. Appx. 682 (2015). 20 The Association is not a named party to this action. The FLSA allows for a 21 collective action only “on behalf of other employees.” 29 U.S.C. § 216(b). Accordingly, 22 Plaintiffs cannot proceed on behalf of the Association. The Court therefore lacks 23 personal jurisdiction over the Association. To the extent the parties seek an order that 24 would apply to the Association’s claims against Defendant, the Joint Motion is denied. 25 The Other Employees have signed an Acknowledgment Form attached to the 26 Settlement. (See Settlement Ex. B; cf. Consent.) Because the Acknowledgment Form 27 does not state that these employees consent to become parties to this action, it is 28 insufficient to include them in this action. See 29 U.S.C. § 216(b); Tyson Foods, Inc. v. 1 Bouaphakeo, 136 S.Ct. 1036, 1043 (2016); Campbell v. Los Angeles, 903 F.3d 1090, 2 1100, 1101-02, 1105 (9th Cir. 2018). The Court therefore lacks personal jurisdiction 3 over the Other Employees. To the extent the parties seek an order that would apply to the 4 Other Employees’ claims against Defendant, the Joint Motion is denied. 5 Because FLSA claims can only be settled with court approval or approval by the 6 Secretary of Labor, Seminiano, 602 Fed. Appx. 682, the Court declines to approve the 7 Settlement unless all parties are properly before the Court. The Joint Motion is denied 8 without prejudice to refiling after all parties have been properly joined. 9 Alternatively, the Joint Motion is denied because the Court finds the release 10 provision of the Settlement too broad. Under Section 5, the employees are releasing, 11 among other things, “future claims . . . or causes of action of any nature whatsoever 12 arising from or in any way related to” this action. (Emphasis added.) “Said release shall 13 include, but shall not be limited to, claims . . . or causes of action . . . which may later 14 accrue to . . . the Parties.” (Emphasis added.) Similarly, Section 2 provides that 15 employees are settling their FLSA claims, “including but not limited to, any other 16 potential wage and hour violations that could be asserted against [Defendant].” 17 (Emphasis added.) These provisions suggest that the employees are releasing wage and 18 hour claims for work to be performed in the future, although they are only receiving 19 payment for the alleged violations “during the period of [the Settlement] from June 2016 20 through the Effective Date of [the Settlement].” (Settlement § 2.) The Court is not 21 inclined to approve a settlement with the employees releasing any claims based on work 22 performed after the effective date of the Settlement. Cf. 29 U.S.C. § 216(c). 23 Procedurally, should the parties choose to refile their joint motion, they must 24 submit a proposed order as required by the Electronic Case Filing Policies and 25 Procedures Manual § 2(f)(4) & (h). If the parties intend to request the Court to retain 26 / / / / / 27 28 1 || jurisdiction, they must include the language provided in this Court’s Standing Order for 2 || Civil Cases. 3 For the foregoing reasons, it is ORDERED as follows: 4 1. The Joint Stipulation for Approval of Settlement Agreement and Dismissal 5 || of Case with Prejudice (ECF No. 11) is denied without prejudice. 6 2. Any renewed motion for settlement approval must be filed no later than 7 || April 2, 2021, and must address all issues discussed above. 8 9 IT IS SO ORDERED. 10 11 Dated: March 5, 2021 1 fee fp 13 H . James Lorenz, 14 United States District Judge

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