United States District Court, W.D. Missouri, St. Joseph Division
ORDER APPROVING FLSA SETTLEMENT
KAYS, UNITED STATES DISTRICT COURT CHIEF JUDGE.
case arises out of plaintiffs' employment as
telephone-dedicated customer service representatives for
Defendant EGS Financial Care, Inc. (“EGS”).
Plaintiffs allege that EGS violated the Fair Labor Standards
Act (“FLSA”), 29 U.S.C. §§ 201-219, by
failing to compensate them for overtime hours worked.
before the Court is the parties' joint motion for
approval of settlement (Doc. 51) and supplemental briefing to
the joint motion to approve the FLSA settlement (Docs. 53,
55). For the following reasons, the motion is GRANTED.
Plaintiffs' motion to certify class (Doc. 12) is DENIED
December 15, 2015, Lance Burns, Cynthia Coons Annigan,
Michael Rudesal, and Susan Keller (“Named
Plaintiffs”) filed this FLSA collective action against
EGS on behalf of themselves and all others similarly
situated. The remaining 110 plaintiffs (“Unnamed
Plaintiffs”) later joined this action by filing opt-in
consent forms (Docs. 3-11, 25, 28, 29, 30, 34). Before
plaintiffs' motion for conditional certification of the
class was ripe for review, the parties reached proposed
settlements of the Named Plaintiffs' and Unnamed
Plaintiffs' claims. There are two separate settlement
agreements: one regarding the four Named Plaintiffs'
claims (the “Named Plaintiff Settlement”) (Doc.
55), and another regarding the Unnamed Plaintiffs' claims
(the “Unnamed Plaintiff Settlement”) (Doc. 55-1).
the settlements, EGS will pay Named Plaintiffs and Unnamed
Plaintiffs using the following formula: (12 minutes per day
x 5 days x the average hourly rate per
minute x the number of weeks worked between December
2012 and December 2015) - (paid time off (“PTO”)
x 1.25). Additionally, each of the Named Plaintiffs
will receive a $250 enhancement award in consideration for
their role in the litigation. 30% of each individual's
compensation will be set aside for attorneys'
fees. In return, the Named Plaintiffs and
Unnamed Plaintiffs agree to dismiss their FLSA claims against
EGS with prejudice, release EGS from future liability
relating to employee compensation, and set aside 30% of each
award for attorneys' fees. Both settlements also contain
confidentiality clauses. Named Plaintiffs shall keep all
non-public terms and conditions of the settlement, non-public
facts regarding EGS's business operations, and the
negotiations concerning the settlement confidential (Doc. 55
¶ 10). Unnamed Plaintiffs shall keep all non-public
terms and conditions of the settlement, the settlement
amount, and non-public facts regarding EGS's business
operations confidential (Doc. 55-1 ¶ 8).
employee may compromise or waive an FLSA claim “if
[the] employee brings suit directly against a private
employer pursuant to § 216(b) of the statute, and the
district court enters a stipulated judgment” on the
settlement after scrutinizing the settlement for fairness.
Copeland v. ABB, Inc., 521 F.3d 1010, 1014 (8th Cir.
2008) (noting that FLSA rights can only be compromised in a
court action where the employee initiates the lawsuit against
the employer); Lynn's Food Stores, Inc. v. United
States, 679 F.2d 1350, 1353 (11th Cir. 1982). To approve
an FLSA settlement under 29 U.S.C. § 216(b), the court
must find that: “(1) the litigation involves a bona
fide dispute; (2) the proposed settlement is fair and
equitable to all parties concerned; and (3) the proposed
settlement contains an award of reasonable attorneys'
fees.” Grove v. ZW Tech, Inc., No.
11-2445-KHV, 2012 WL 4867226, at *3 (D. Kan. Oct. 15, 2012).
policy favors settlements of FLSA claims. Lynn's Food
Stores, 679 F.2d at 1354. In reviewing a proposed
settlement, a court must not substitute “its own
judgment as to optimal settlement terms for the judgments of
the litigants and their counsel.” Petrovic v. Amoco
Oil Co., 200 F.3d 1140, 1148-49 (8th Cir. 1999)
(affirming an order approving a proposed settlement in a
class action case).
Court finds each Settlement satisfies all of the
prerequisites for approval.
The parties have shown a bona fide wage and hour dispute
demonstrate a bona fide wage and hour dispute exists, the
parties must provide the reviewing court with the following
(1) a description of the nature of the dispute (for example,
a disagreement over coverage, exemption or computation of
hours worked or rate of pay); (2) a description of the
employer's business and the type of work performed by the
employees; (3) the employer's reasons for disputing the
employees' right to a minimum wage or overtime; (4) the
employees' justification for the disputed wages; and (5)
if the parties dispute the ...