Green v. Ventnor Beauty Supply, Inc.

          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 ...