Shelly v. City of Chickasaw Board of Education

District Court, S.D. Alabama·Decided November 3, 2023·No. 1:23-cv-00021·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION

PATRICIA SHELLY, ) Plaintiff, ) ) v. ) CIVIL ACTION 1:23-00021-KD-N ) THE CITY OF CHICKASAW BOARD ) OF EDUCATION, ) Defendant. )

ORDER

This matter is before the Court on the parties’ “Revised Joint Motion to Approve Settlement” (Doc. 20), responding to the Court’s 8/3/23 Order (Doc. 19) (amending Doc. 16). I. Background Plaintiff Patricia Shelly (Shelly) is currently the Executive Administrative Assistant for the Superintendent of Defendant City of Chickasaw Board of Education (the Board). Shelly was employed by the Board for the three years prior to filing the present action. (Doc. 20 at 2). Prior to August 2020, Shelly was paid a monthly salary, stipends, and overtime premium pay for hours worked in excess of 40 hours during a seven-day workweek. (Id.) Shelly “was required to clock in at the start of [the] workday and clock out at the end of the workday.” (Id. at 3). On or about September 2020, “in connection with a significant salary increase and based on a belief that [Shelly] was an ‘exempt’ employee, [Shelly] was no longer paid overtime premium pay for hours worked over 40 in the workweek.” (Doc. 20 at 2). Instead, Shelly was paid her monthly salary – regardless of how many hours or days she worked in a week. (Id.) Consequently, the Board no longer required Shelly to clock out at the end of the workday. (Id. at 3). On or about February 14, 2023, the Board began to require Shelly to “clock in for work, clock out for a lunch break, clock in after the lunch break, and clock out when work ended for the day.” (Doc. 20 at 3). Shelly claims she was not adequately compensated for overtime premium pay for hours worked in excess of 40 in the workweek from September 2020 to the filing of the present action, January 13, 2023. Shelly argues that two (2) practices by the Board caused the inadequate compensation. First, Shelly asserts that she was “required to work hours outside of her regular

working hours, including staying afterhours for meetings of the [] Board.” (Doc. 20 at 3; Doc. 1 at 2). Second, Shelly alleges that she “regularly work[ed] through what should [have been] a lunch break, thus causing work in excess of forty (40) hours many weeks.” (Id.) As relief, Shelly requests that this Court issue a declaratory judgment that the employment policies, practices, procedures, conditions and customs of the Board are violative of the rights of Shelly as secured by the FLSA; award damages from the Board, including compensation for unrecorded overtime work plus interest, post-judgment interest, and liquidated and exemplary damages, in an amount to be proven at trial; award all costs of litigation, including expert fees and attorneys’ fees and costs; and award such other legal and equitable relief as the Court deems proper. (Doc. 1 at 4). II. Governing Law

In Lynn's Food Stores, Inc. v. United States ex rel. Dep't of Labor, Emp. Standards Admin., Wage & Hour Div., 679 F.2d 1350, 1352-1355 (11th Cir. 1982), the Eleventh Circuit recognized two (2) methods for settlement of claims brought pursuant to the FLSA: 1) supervision by the Secretary of Labor, or 2) court approval in a private action where a plaintiff is represented by counsel. As to the latter, which applies here, the parties may compromise and settle the FLSA claims but only with Court approval of the settlement agreement. Specifically, courts must determine whether the settlement is a “fair and reasonable resolution of a bona fide dispute” of the FLSA claims. Lynn’s Food, 679 F.2d at 1352-1355; Dees v. Hydradry, Inc., 706 F.Supp.2d 1227, 1238-1239 (M.D. Fla. 2010). Evaluating the fairness of an FLSA compromise includes an assessment of: 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 amount of discovery completed; 4) the probability of plaintiff's success on the merits; 5) the range of possible recovery; and 6) the opinions of the counsel. Dees, 706 F.Supp.2d

at 1241. Additionally, the FLSA “contemplates that ‘the wronged employee should receive his full wages plus the penalty without incurring any expense for legal fees or costs.’” Silva v. Miller, 307 Fed. Appx. 349, 351 (11th Cir. 2009). “When a settlement agreement includes….attorney's fees and costs, the ‘FLSA requires judicial review of the reasonableness of counsel's legal fees to assure both that counsel is compensated adequately and that no conflict of interest taints the amount the wronged employee recovers under a settlement agreement.’" Id. Moreover, 29 U.S.C. § 216(b) provides that “...[a]ny employer who violates…shall be liable to the employee….affected in the amount of….their unpaid overtime compensation….and in an additional equal amount as liquidated damages...The court…shall, in addition to any judgment awarded to the plaintiff…allow a reasonable attorney's fee to be paid by the defendant, and costs of the action.” Thus, “in any case

where a plaintiff agrees to accept less than his full FLSA wages and liquidated damages, he has compromised his claim within the meaning of Lynn's Food Stores.” Vergara v. Delicias Bakery & Restaurant, Inc., 2012 WL 2191299, *1 (M.D. Fla. May 31, 2012). Previously, the parties did not file a copy of their settlement agreement, instead submitting a Rule 68 Offer of Judgment and Shelly’s acceptance (Docs. 16, 16-1), for the Court’s review. With the pending motion, however, the parties filed a copy of the settlement. (Doc. 20-1). III. Bona Fide Dispute and Fair and Reasonable Resolution Courts may approve a compromise resolving a bona fide dispute over FLSA provisions where a plaintiff's compromise of his claims (the settlement agreement) is a fair and reasonable resolution of that dispute. Lynn's Food, 679 F.2d at 1352-1355; Dees, 706 F.Supp.2d at 1238-1239. “[T]he parties requesting review of an FLSA compromise must provide enough information for the court to examine the bona fides of the dispute.” Dees, 706 F.Supp.2d at 1241. A. Bona Fide Dispute

For those reasons set forth in the Court’s prior Order (Doc. 19), the undersigned has already determined that a bona fide dispute exists as to whether Shelly was paid overtime for all hours worked over 40 as required by 29 U.S.C. § 207(a). B. Fair and Reasonable Resolution

Lynn's Food requires this Court to determine whether a plaintiff’s compromise of his or her claims is fair and reasonable. Lynn's Food, 679 F.2d at 1352-1355; Dees, 706 F.Supp.2d at 1238-1239. A general framework for evaluating the fairness of an FLSA compromise includes: 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 plaintiff's success on the merits; 5) the range of possible recovery; and 6) the opinions of the counsel. Dees, 706 F.Supp.2d at 1241. The parties agree the terms of settlement are fair and reasonable. (Doc. 20 at 6, 10). Per Lynn Food's, the Court must still assess same. 1. Compromise of the FLSA Claims

Under the FLSA, “[a]ny employer who violates the provisions of section 206 or section 207 of this title shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages[.]” 29 U.S.C. § 216(b). The parties agree that both sides compromised their positions. (Doc. 20 at 9).

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Shelly v. City of Chickasaw Board of Education, (S.D. Ala. 2023).

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