Gamble v. Air Serv Corp.

247 F. Supp. 3d 1302, 2017 U.S. Dist. LEXIS 71665
CourtDistrict Court, N.D. Georgia
DecidedMarch 28, 2017
DocketCIVIL ACTION NO. 1:16-CV-04580-LMM
StatusPublished
Cited by3 cases

This text of 247 F. Supp. 3d 1302 (Gamble v. Air Serv Corp.) is published on Counsel Stack Legal Research, covering District Court, N.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gamble v. Air Serv Corp., 247 F. Supp. 3d 1302, 2017 U.S. Dist. LEXIS 71665 (N.D. Ga. 2017).

Opinion

ORDER

Leigh Martin May, United States District Judge

This case comes before the Court on the parties’ Joint. Motion to Approve Settlement [14]. After due consideration, the Court enters the following Order:

I. BACKGROUND

Plaintiff sued his former employer to recover unpaid overtime compensation due under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (“FLSA”). See Dkt. No. [1] ¶ 1. The parties announced a settlement agreement and submitted a Joint Motion to Approve Settlement Agreement. Dkt. No. [14]. The Settlement purports to settle all of Plaintiffs claims and includes a confidentiality section prohibiting Plaintiff from discussing the Agreement. Id. ¶ 9.

The confidentiality section dictates that Plaintiff will “keep the terms and amount of [the Settlement] completely and strictly confidential (except that [Plaintiff] shall have the right to say ‘the matter has been resolved’).” Id. (emphasis in original). The section prohibits Plaintiff from disclosing “any information concerning [the Settlement] to anyone except as required by law, for specific legal and/or professional investment planning and advice, to [Plaintiffs] spouse, ... or to enforce [the Settlement].” Id. Lastly, the section prohibits Plaintiff from disclosing any information about the Settlement to any “past, present, or prospective employee or applicant for employment of [Defendant].” Id.

“Although a private settlement and stipulation for dismissal typically ends the case without judicial intervention, the Eleventh Circuit requires the district court to review the settlement of the FLSA [1304]*1304claim.” Dees v. Hydradry, Inc., 706 F.Supp.2d 1227, 1231 (M.D. Fla. 2010) (citing Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350 (11th Cir. 1982)). Both the congressional purpose of the FLSA and the public’s interest in the transparency of the judicial process decisively inform the procedure and the applicable standard of the district court’s review of an FLSA settlement. See Dees, 706 F.Supp.2d at 1231.

After a review of the Settlement and a telephone hearing on the matter, the Court finds the amount of compensation and the attorney’s fees is fair and reasonable. However, for the reasons discussed below, the Court cannot approve the Settlement as drafted because the confidentiality portion contravenes both the purpose of the FLSA and the public’s interest. Id.

II. DISCUSSION

By enacting the FLSA, Congress sought “to protect certain groups of the population from substandard wages and excessive hours which endangered the national health and well-being and the free flow of goods in interstate commerce.” Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 706, 65 S.Ct. 895, 89 L.Ed. 1296 (1945). To combat the typically unequal bargaining power between employer and employee, the Act imposes both a minimum wage and overtime compensation for several categories of employees. 29 U.S.C. § 206 (establishing minimum wage); 29 U.S.C. § 207 (establishing overtime compensation). To deter noneompliance, the FLSA also permits claimants to recover reasonable attorney’s fees and liquidated damages—an additional compensation equal to the amount recovered under § 206 and § 207. 29 U.S.C. § 216.

Instead of going to trial, parties may negotiate a settlement agreement or compromise among themselves. See Lynn’s Food Store, 679 F.2d at 1353. However, the Eleventh Circuit has imposed restrictions on how the parties may settle. Id. Specifically, an employee may only accept a compromise supervised either by the Department of Labor or a district court. Id. If an employee accepts a compromise supervised by the Department of Labor, he or she waives the right to sue for the unpaid wages. Id. If the employee chooses to sue in district court but then decides to settle, the district court must scrutinize the settlement for fairness. Id

In requiring a review of settlement agreements, the Eleventh Circuit explained that “FLSA rights cannot be abridged by contract or otherwise waived because this would ‘nullify the purposes’ of the statute and thwart the legislative policies it was designed to effectuate.” Id. at 1352 (quoting Barrentine v. Arkansas-Best Freight Sys., 450 U.S. 728, 740, 101 S.Ct. 1437, 67 L.Ed.2d 641 (1981)). However, the Eleventh Circuit permits compromise of an FLSA claim under specific circumstances:

Settlements may be permissible in the context of-a suit brought by employees under the FLSA for back wages because initiation of the action by the employees provides some assurance of an adversarial context. The employees are likely to be represented by an attorney who can protect their rights under the statute. Thus, when the parties submit a settlement to the court for approval, the settlement is more likely to reflect a reasonable compromise of disputed issues than a mere waiver of statutory rights brought about by an employer’s overreaching. If a settlement in an employee FLSA suit does reflect a reasonable compromise over issues, such as FLSA coverage or computation of back wages, that are actually in dispute; we allow the district court to approve the settlement in order to promote the policy of encouraging settlement of litiga[1305]*1305tion. But to approve an “agreement” between an employer and employees outside of the adversarial context of a lawsuit brought by the employees would be in clear derogation of the letter and spirit of the FLSA.

Id. at 1354. Accordingly, an employee may settle a claim if the district court determines it is “a fair and reasonable resolution of a bona fide dispute over FLSA provisions.” Id.

Such reviews help induce voluntary compliance with the FLSA’s requirements. See Dees, 706 F.Supp.2d at 1237. For instance, an employer who violates the Act has little incentive to begin to comply if permitted to privately settle claims at a discounted amount. If approval is required, not only will the discount be unlikely, but the amount owed might increase through liquidated damages—both of which help prevent employers from violating the Act at the start.

The Court’s review of FLSA settlements to ensure they are fair and reasonable “implicates both the rights of the settling employee and the interests of the public at large.” Lopez v. Nights of Cabiria, LLC, 96 F.Supp.3d 170, 178 (S.D.N.Y. 2015). As one court has concluded:

To fully implement the policy embodied by the FLSA, the district should scrutinize the compromise in two steps. First, the court should consider whether the compromise is fair and reasonable to the employee (factors ‘internal’ to the compromise). If the compromise is reasonable to the employee, the court should inquire whether the compromise otherwise impermissibly frustrates implementation of the FLSA (factors ‘external’ to the compromise).

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Cite This Page — Counsel Stack

Bluebook (online)
247 F. Supp. 3d 1302, 2017 U.S. Dist. LEXIS 71665, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gamble-v-air-serv-corp-gand-2017.