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Crevatas v. Smith Management And Consulting, LLC

United States District Court, M.D. Pennsylvania

March 22, 2017

FRANCIS CREVATAS, et al., Plaintiffs
v.
SMITH MANAGEMENT AND CONSULTING, LLC, Defendant

          MEMORANDUM

          MALACHY E. MANNION United States District Judge

         Plaintiff Francis Crevatas is an employee of defendant Smith Management and Consulting, LLC, (“Smith”), an oil and gas field services company that provides consultants to clients in Pennsylvania and other areas who perform work on oil and gas rigs. Smith paid its consultants based on a day-rate. Plaintiff was paid a day-rate of $350 for a full day of work for Smith. Plaintiff alleged in this case that he and Smith's other consultants were scheduled for shifts lasting at least 12 hours and that they routinely worked over 40 hours per week. Despite working overtime hours, plaintiff alleged that Smith failed to pay the consultants overtime premium pay. Rather, Smith simply paid the consultants their regular day-rate multiplied by the number of days they worked during a given week. Plaintiff claims that Smith's payment practices have caused him and other day-rate consultants to work overtime hours without compensation in violation of the Fair Labor Standards Act mandates. Plaintiff has sued Smith under the Fair Labor Standards Act and the Pennsylvania Minimum Wage Act, on behalf of himself and other day-rate consultants. The parties now seek court approval of their settlement.

         I. BACKGROUND

         Plaintiff contends that he and the other day-rate consultants for Smith are owed overtime pay for any hours worked in excess of 40 hours per week, as mandated by the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§201, et seq., and the Pennsylvania Minimum Wage Act (“PMWA”), 43 P.S. §§333.101, et seq. Plaintiff brought suit against Smith on November 30, 2015, (Doc. 1), bringing a claim for violations of the FLSA's overtime provision, 29 U.S.C. §207(a)(1), and a claim for violations of the PMWA's overtime provision, 43 P.S. §331.104(c). The FLSA claim was brought as a collective action pursuant to 29 U.S.C. §216(b). The PMWA actions was brought as a class action pursuant to Fed.R.Civ.P. 23. Plaintiff filed a motion for an extension of time for the class certification deadline, (Doc. 10), and it was granted by the court and postponed until a later date to be determined. (Doc. 13). The parties later stipulated that all individuals who, during any workweek since November 30, 2012, were paid, in whole or in part, on a daily basis by Smith were conditionally certified as a collective pursuant to 29 U.S.C. §216(b). (Doc. 21). Plaintiff withdrew the Rule 23 class action claim, but the parties acknowledged that plaintiffs who opt into the collective action join the action for both the FLSA and PMWA claims. (Id.). The court approved of the stipulation. (Doc. 22). In addition to the original plaintiff, 27 other day-rate employees opted in to the collective action. As such, there are a total of 28 plaintiffs in this case. (Doc. 35-1 at 15).

         On March 1, 2017, plaintiffs filed an unopposed motion for approval of collective action settlement, noting the concurrence of Smith's counsel in the motion, with a copy of the proposed settlement agreement. (Doc. 35, Doc. 35-1). Plaintiffs also filed their brief in support on March 1, 2017. (Doc. 36).

         II. DISCUSSION

         “In 1938, Congress enacted the FLSA to protect covered workers from substandard wages and oppressive working hours.” Friedrich v. U.S. Computer Servs., 974 F.2d 409, 412 (3d Cir. 1992) (citing Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 739 (1981). The Fair Labor Standards Act provides that:

“Except as otherwise provided in this section, no employer shall employ any of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.”

29 U.S.C. §207(a)(1). Thus, employers covered by the FLSA must pay overtime compensation to employees who work for more than 40 hours a week “unless one or another of certain exemptions applies.” Packard v. Pittsburgh Transp. Cp., 418 F.3d 246, 250 (3d Cir. 2005).

         The PMWA, like the FLSA, provides that employees shall receive overtime wages of “not less than one and a half times” their regular wage for any hours worked after forty in a work week. 43 P.S. §333.104(c). Pennsylvania courts have looked to federal law regarding the FLSA in applying the PMWA. Baum v. Astrazeneca LP, 372 F.App'x 246, 248, n. 4 (3d Cir. 2010) (citing Commonwealth of Pa. Dept. of Labor and Indus., Bureau of Labor Law Compliance v. Stuber, 822 A.2d 870, 873 (Pa.Commw. 2003), aff'd, 859 A.2d 1253 (2004) (applying “federal case law” regarding the FLSA to a PMWA claim). The Pennsylvania courts have determined that “it is proper to give deference to federal interpretation of a federal statute when the state statute substantially parallels it.” (Id.).

         In their brief, (Doc. 36 at 7), plaintiffs explain as follows:

Under FLSA and PMWA regulations, overtime-eligible day-rate employees are entitled to extra half-time pay for all hours worked over 40 per week. See 29 C.F.R. §778.112; 34 Pa. Code §231.43(b). The extra overtime premium pay is calculated through a three-step methodology: (1) all day-rate payments received by an employee during the week are totaled; (2) the total payments are then divided to determine the “regular rate” paid for the week; and (3) for every hour worked over 40, the employee receives an extra overtime premium payment equaling 50% of the regular rate. See id.

         Plaintiffs move for court approval of their proposed settlement agreement as well as their proposed award of attorneys' fees. Smith has concurred in plaintiffs' motion. The court will now discuss the proposed settlement agreement and the award of attorneys' fees and costs.

         “Once employees present a proposed settlement agreement to the district court pursuant to Section 216(b), the Court may enter a stipulated judgment if it determines that the compromise ‘is a fair and reasonable resolution of a bona fide dispute over FLSA provisions.'” Brown v. TrueBlue, Inc., 2013 WL 5408575, *1 (M.D.Pa. Sept. 25, 2013) (citing Cuttic v. Crozer-Chester Medical Center,868 F.Supp.2d 464, 466 (E.D.Pa. 2012); see also Adams v. Bayview Asset Mgmt., LLC, 11 F.Supp.3d 474, 476 (E.D.Pa. 2014) (court indicated that Department of Labor supervision or court approval ...


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