United States District Court, D. New Jersey
JULIA
W. CLARK, YINAN MA, ARI R. KARPF, KARPF KARPF & CERUTTI
PC On behalf of Plaintiff
LAWRENCE BRENT BERG, MARSHALL, DENNEHEY, WARNER, COLEMAN
& GOGGIN On behalf of Defendants
OPINION
NOEL
L. HILLMAN, U.S.D.J.
Plaintiff
Michael Green filed a complaint alleging that Defendants
violated the Fair Labor Standards Act, 29 U.S.C. § 201,
et seq. (“FLSA”), among other laws, because he
was not paid overtime compensation. After a settlement
conference with the magistrate judge on March 13, 2019, the
parties reached a settlement of the matter. Pending before
the Court is the parties' joint motion to approve the
settlement.
Because
Plaintiff's claims are for alleged violations of the
FLSA, the Court is required to review the settlement
agreement and determine whether the matter concerns a bona
fide dispute, and whether the settlement is a fair and
reasonable resolution for Plaintiff. See Brumley v. Camin
Cargo Control, Inc., 2012 WL 1019337, at *1 (D.N.J.
2012) (“Employees have two avenues for compromising an
FLSA claim: (1) a compromise supervised by the Department of
Labor pursuant to 29 U.S.C. § 216(c); and (2) a district
court-approved compromise pursuant to 29 U.S.C. §
216(b).”); Chillogallo v. John Doe LLC #1,
2018 WL 4735737, at *1 (D.N.J. 2018) (quoting Lynn's
Food Stores, Inc. v. United States, 679 F.2d 1350, 1353
(11th Cir. 1982) (“When employees bring a private
action under the FLSA, and present to the district court a
proposed settlement pursuant to that Act's § 216(b),
the district court may enter a stipulated judgment if it
determines that the compromise reached is a fair and
reasonable resolution of a bona fide dispute over FLSA
provisions.”); Bettger v. Crossmark, Inc.,
2015 WL 279754, at *3 (M.D. Pa. 2015) (“Although the
Third Circuit has not addressed whether [FSLA] actions
claiming unpaid wages may be settled privately without first
obtaining court approval, district courts within the Third
Circuit have followed the majority position and assumed that
judicial approval is necessary.”)).
The
parties have settled the matter for $50, 000 inclusive of
attorneys' fees and costs. The parties have provided the
Court with the settlement agreement, which details the
procedural history of the case, the settlement amount for
Plaintiff, the attorneys' fees, the release of his claims
against Defendants, no admission of liability by Defendants,
and the dismissal of the action with prejudice. (Docket No.
16-1.) Plaintiff will receive (1) $5, 000.00 relating to his
claim of economic damages, including any claim of overtime
wages, less any and all appropriate withholdings and
deductions, and an IRS Form W-2 shall be issued to Plaintiff
for this amount, and (2) $24, 709.86 for his
claims of non-economic damages, and an IRS Form 1099 shall be
issued to Plaintiff for this amount. Plaintiff's counsel
shall receive $20, 290.14 in fees and costs.[1]
The
Court finds that the matter concerns a bona fide dispute and
the settlement is a fair and reasonable resolution for
Plaintiff. The parties explain:
While Plaintiff believes he is entitled to unpaid overtime,
Plaintiff recognizes that based on Defendants' defenses
he may not recover anything at trial, and that there is
always a potential that the case could be dismissed following
discovery pursuant to a Motion for Summary [Judgment].
Likewise, Defendants believe that no liability exists but
acknowledge the risk that Plaintiff could receive a favorable
judgment at trial. Through the course of the settlement
discussions that took place (including discussions during the
course of the March 13 settlement conference), the Parties
exchanged information which each side believed would serve as
support to their respective positions as to Plaintiff's
FLSA claims. Both parties agree that there are no time
records as to Plaintiff's hours, therefore, at trial, the
Parties will need to present to other sources of evidence to
prove (and disprove) the hours worked in each relevant
workweek.
(Docket No. 16 at 7-8.)
The
parties further relate that “[w]hile Plaintiff's
counsel believes Plaintiff's claims to be meritorious,
she is experienced and realistic, and understands the
evidentiary hurdles associated with proving hours worked in
the absence of accurate recordkeeping.” (Id.
at 8.)
The parties conclude:
Thus, in light of the length of time associated with further
litigation, the inherent risks of trial, and the expense of
continued litigation, the Parties agree that the Settlement,
which includes resolution as to Plaintiff's FLSA claims,
reflects a mutually satisfactory resolution. Moreover, the
Settlement was the product of extensive arms-length
negotiations, much of which was assisted by [Magistrate]
Judge [Ann] Donio, which further ensures that the settlement
is fair and reasonable.
(Id.)
The
Court agrees that these considerations compel the conclusion
that the settlement is fair and reasonable under the
circumstances. The Court notes that despite apparent proof
difficulties and other potential defenses Plaintiff will
receive ...