Adaway v. Aspire Loyalty Travel Solutions LLC

District Court, D. Arizona·Decided June 18, 2025·No. 2:24-cv-02792·Unknown

Opinion

WO

Diamond Adaway, No. CV-24-02792-PHX-DJH

Plaintiff, ORDER

v.

Aspire Loyalty Travel Solutions LLC,

Defendant. The parties have filed a Joint Motion to Approve the Settlement Agreement (Doc. 16) and the Court must decide whether to approve the settlement and the award of attorneys’ fees. For the reasons below, the Court grants the parties’ Motion. I. Background Plaintiff filed this suit on October 15, 2024. (Doc. 1). The Complaint alleges that Defendant failed to pay Plaintiff the federally mandated overtime premium for hours worked in excess of 40 hours per workweek in violation of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201, et seq. (Doc. 1 at ¶¶ 1, 60). Specifically, Plaintiff alleges that she needed to perform certain boot-up and call ready work to access Defendant’s systems at a call center and that Defendant failed to compensate Plaintiff until she had completed those steps and marked herself available. (Doc. 1 at ¶¶ 22–26). Plaintiff alleges that this work was compensable time under FLSA and Defendant knew or should have known that this work was not being compensated. (Doc. 1 at ¶¶ 30–39). Defendant maintains that it complied with the FLSA and denies Plaintiff’s allegation that she was not compensated for all time worked. (Doc. 15 at 2). Soon after the Plaintiff filed her Complaint, the Parties reached a Settlement Agreement to resolve all claims, under the following terms: (1) Defendant agrees to pay to Plaintiff $5,500.00; (2) Plaintiff releases Defendant from any and all claims; (3) Plaintiff and Defendant request the Court to dismiss this suit with prejudice; (4) Plaintiff waives any right to any future employment with Defendant; (5) Defendant denies liability or wrongdoing; and (6) Plaintiff agrees that the agreement is confidential. (Doc. 15-1 at 1–4). The Settlement Agreement requires payment to Plaintiff of $200.00 for alleged unpaid overtime, $200.00 for alleged liquidated damage, and $600.00 in settlement of Plaintiff’s general release of claims. (Doc. 15-1 at 1–2). It also requires payment of $4,500.00 to Johnson Becker PLLC for attorneys’ fees and costs. (Doc. 15-1 at 1–2). II. Legal Standard In a FLSA case, the district court must approve the settlement’s terms to ensure that it is enforceable and fair. Juvera v. Salcido, 2013 WL 6628039 at *3 (D. Ariz. Dec. 17, 2013) (citing, inter alia, Nall v. Mal-Motels, Inc., 723 F.3d 1304 (11th Cir. 2013) (affirming holding in Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350 (11th Cir. 1982))). Courts in the Ninth Circuit follow Lynn’s Food when deciding whether to approve the parties’ settlement. Villareal v. Caremark LLC, 2016 WL 5938705 at *2 (D. Ariz. May 10, 2016); Fontes v. Drywood Plus, Inc., 2013 WL 6228652 at *7 (D. Ariz. Dec. 2, 2013) (citing McKeen-Chaplin v. Franklin Am. Mortg. Co., 2012 WL 6629608 at *2 n. 3 (N.D. Cal. Dec. 19, 2012) (citing various cases)). After determining whether there is a “bona fide dispute over FLSA provisions,” the Court must decide if a stipulated settlement agreement is “a fair and reasonable resolution” of that dispute. Lynn’s Food, 679 F.2d at 1353, 1355. The settlement is more likely to be fair and reasonable “if it was reached as an arm’s length resolution of contested litigation” in a bona fide dispute under the FLSA. Lockwood v. R&M Towing LLC, 2020 WL 5724383, at *2 (D. Ariz. Sept. 24, 2020). III. Discussion A. Bona Fide Dispute “[A] bona fide dispute exists when there are legitimate questions about the existence and extent of Defendant’s FLSA liability.” Panico v. Turnbull Law Group LLC, 2022 WL 220485, at *1 (D. Ariz. Jan. 25, 2022) (citation and internal quotations omitted). In other words, there must be some doubt over who would prevail on the merits of the case. Lockwood, 2020 WL 5724383, at *2. Although Defendant did not answer the Complaint before the Parties reached a settlement, Defendant would have contested the merits of Plaintiff’s allegations, the availability of liquidated damages, and whether this action can be maintained in federal court. (Doc. 15 at 4). Plaintiff also anticipates that Defendant would have raised defenses that “the work at issue is not compensable under the FLSA or is otherwise de minimis,” which Plaintiff would dispute. (Id.) Thus, there is a bona fide dispute here. B. Fair and Reasonable While there are no universally used factors to evaluate whether a proposed FLSA settlement is fair and reasonable, “some factors courts have looked at are: (1) the plaintiff’s range of possible recovery; (2) the stage of proceedings and amount of discovery completed; (3) the seriousness of the litigation risks faced by the parties; (4) the scope of any release provision in the settlement agreement; (5) the experience and views of counsel and the opinion of participating plaintiffs; and (6) the possibility of fraud or collusion.” Panico, 2022 WL 220485, at *2 (citing Selk v. Pioneers Mem’l Healthcare Dist., 159 F. Supp. 3d 1164, 1173 (S.D. Cal. 2016)). Courts evaluate whether a settlement agreement is fair and reasonable “under the totality of the circumstances.” Panico, 2022 WL 220485, at *2 (citing Selk, 159 F. Supp. 3d at 1173). 1. Plaintiff’s Range of Possible Recovery The settlement amount must “bear[] some reasonable relationship to the true settlement value of the claims.” Selk, 149 F. Supp. 3d at 1174. The amount does not need to reach any specific percentage of the maximum possible recovery. Id. (citing Nat’l Rural Telecomm’s Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 527 (C.D. Cal. 2004) (collecting cases)); see Quintana v. HealthPlanOne, LLC, 2019 WL 3342339, at *3 (D. Ariz. July 25, 2019) (finding settlement fair where settlement assumed five minutes of unpaid work per day and complaint alleged ten to fifteen minutes); Bellinghausen v. Tractor Supply Co., 306 F.R.D. 245, 256 (N.D. Cal. 2015) (finding settlement fair where the settlement amount represented between nine and 27 percent of the maximum possible recovery); Alleyne v. Time Moving & Storage Inc, 264 F.R.D. 41, 57–58 (E.D.N.Y. 2010) (finding settlement fair where the settlement amount represented between 13 and 19 percent of the maximum possible recovery). A district court must determine that, compared to the amount the plaintiffs could have obtained at trial, the settlement amount is fair and reasonable under the circumstances presented. Selk, 149 F. Supp. 3d at 1174. Here, Plaintiff represents that $200.00 for alleged unpaid overtime in the settlement agreement accounts for five minutes of overtime per workday. (Doc. 15 at 4). Plaintiff alleges that she worked 10 minutes per day uncompensated. (Doc. 15 at 2). Although Plaintiff does not explicitly present her own estimates for unpaid wages, this suggests that her alleged maximum possible recovery for unpaid overtime is $400.00.1 Defendant’s position is that Plaintiff is owed nothing, but if Plaintiff proves all her allegations, her maximum possible recovery for unpaid wages amounts to $137.36. (Id.) Thus, the $200 for alleged unpaid overtime probably constitutes between 50 and 145.6 percent of her maximum possible recovery. In addition, the settlement agreement apportions to Plaintiff another $200 for alleged liquidated damages. (Id.) The parties have not provided the Court with any information with which to double-check their calculations.2 Nevertheless, the settlement amount rises to a

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