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Galt v. Eagleville Hospital

United States District Court, E.D. Pennsylvania

April 19, 2018

ADRIENNE GALT and NANCY MURPHY, for themselves and all others similarly situated, Plaintiffs,


          Rufe, J.

         The parties have reached a settlement in this case brought under the Fair Labor Standards Act[1] (“FLSA”) and the Pennsylvania Minimum Wage Act[2] (“PMWA”), and seek final approval of their agreement, including an award of attorneys' fees and costs, and incentive payment to class representatives, along with final certification of the settlement class and collective. Following a final approval hearing held on April 2, 2018, and for reasons that follow, the Court will grant the motion.

         I. BACKGROUND

         Named Plaintiffs Adrienne Galt and Nancy Murphy are former registered nurses at Defendant Eagleville Hospital. In December 2015, they filed this class and collective action on behalf of themselves and other similarly situated employees of Eagleville Hospital, alleging that Defendant violated the FLSA and the PMWA by requiring them to work during 30-minute unpaid meal breaks and then automatically deducting that time from their shift totals, depriving them of compensation, including overtime pay.[3] A third Plaintiff, Nina Johnson, who worked as a nursing assistant at Eagleville Hospital, joined the suit in 2016. Defendant has denied, and continues to deny, Plaintiffs' allegations.

         In October 2016, Plaintiffs sought conditional certification of an FLSA collective consisting of “[a]ll persons who have worked for Defendant as a Registered Nurse, Nursing Assistant, Licensed Practical Nurse, or Mental Health Technician” during any work week in the previous three years.[4] After briefing by the parties, the Court granted conditional certification and authorized Plaintiffs to disseminate opt-in forms to potential collective members.[5]Subsequently, 71 employees, including Nina Johnson, filed consent forms to join Plaintiffs' FLSA claim.[6]

         From June 2016 through June 2017, the parties engaged in document discovery. Defendant produced hiring, training and compliance materials, e-mails, meeting minutes, Human Resources materials, its Employee Handbook and Policy Manual, daily timekeeping and payroll reports for the Named Plaintiffs, as well as employment dates, rates of pay and work assignments for the entire Settlement Class.[7] At the same time, the parties worked towards a negotiated settlement. On August 21, 2017, the parties engaged in a full-day mediation session with Hon. Diane Welsh (Ret.) of JAMS, an experienced wage and hour mediator. After further discussions and exchange of information, the parties signed a Settlement Agreement on September 21, 2017.

         Plaintiffs moved for preliminary approval of the Settlement Agreement as well as preliminary certification of a PMWA settlement class and FLSA settlement collective. On December 20, 2017, the Court held a preliminary approval hearing. At the hearing, the Court asked the parties to modify the release clause of the Settlement Agreement to limit any waiver of rights by class members to claims related to the allegations in the complaint and to extend the response period for class members from 30 days to 60 days. The parties made the requested modifications to the Settlement Agreement and Notice of Settlement, [8] and the Court granted preliminary approval and certification and authorized dissemination of the Notice on December 22, 2017.[9]

         The Notice of Settlement was first distributed on January 31, 2018 to 361 prospective class members, and ultimately successfully delivered to 354 class members.[10] Since then, no class members have opted out of, or objected to, the proposed settlement.[11] This Court held a Final Approval hearing on April 2, 2018, at which no class members objected or appeared. During and after the hearing, the Court directed the parties to reconsider the confidentiality provision of the Settlement Agreement (Section 7.4), which the Court found to be inconsistent with the informational purposes and the non-retaliation provision of the FLSA.[12] The parties subsequently submitted a signed modification to the Settlement Agreement removing the confidentiality provision.[13]


         Pursuant to the Settlement Agreement, Defendant will pay a total of $520, 000.00 to resolve this litigation.[14] This payment includes the following components: $180, 500.00 in damages to the 361 PMWA Class Members, $127, 000.00 in damages to the 73 FLSA Collective members, $12, 500.00 in enhancement awards to the two Named Plaintiffs and one pre-certification Opt-In Plaintiff ($320, 000.00 total), $182, 000.00 in attorney's fees, $10, 000.00 to reimburse for “out-of-pocket” costs incurred by Class Counsel and $8, 000.00 in settlement administration costs.[15] In particular, damages to the PMWA class members and FLSA Collective members will be distributed such that each of the PMWA members will receive a lump sum of $500, while each of the FLSA Collective members will also receive individualized additional damages based on actual weeks worked, hours per week worked, and rate of pay during the relevant time period.

         In exchange, the Settlement Class Members will release Defendant from any and all claims for unpaid wages, overtime or other compensation and all other relief under the FLSA and all other state and local wage/hour and wage payment laws and common law theories arising or accruing prior to the approval date of the parties' settlement that relate to allegations made in Plaintiffs' December 30, 2015 Complaint.[16]


         Plaintiffs ask the Court to certify 1) a settlement class under the PMWA consisting of the 361 employees who worked as a Registered Nurse, Nursing Assistant, Licensed Practical Nurse, or Mental Health Technician for Eagleville Hospital during any work week since March 2, 2014 (“the PMWA Class”) and 2) a settlement collective under the FLSA consisting of the 73 members, including the Named Plaintiffs, who filed a consent form to join Plaintiffs' FLSA claim (“the FLSA Collective”). In addition, Plaintiffs ask the Court to approve the terms of the proposed settlement agreement, to award enhancement payments to Plaintiffs Galt, Murphy, and Johnson, and to award attorneys' fees and expenses. The Court addresses these issues in turn.

         A. Class Certification under Rule 23

          To certify a class, the requirements of Federal Rules of Civil Procedure 23(a) and 23(b) must be satisfied.[17] “The party seeking certification bears the burden of establishing each element of Rule 23 by a preponderance of the evidence.”[18]

         1. Rule 23(a) Factors

         Under Rule 23(a), Plaintiffs must demonstrate: (1) numerosity: the class is so numerous that joinder of all members is impracticable; (2) commonality: there are questions of law or fact common to the class; (3) typicality: the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) adequacy of representation: the representative parties will fairly and adequately protect the interests of the class.[19]

         a. Numerosity

         In evaluating numerosity, courts assess whether there are enough prospective class members that joinder of all the members would be impracticable.[20] Although there is no minimum class size required for numerosity, courts have generally found that the requirement is satisfied when there are over 40 prospective class members.[21] In this case, there are 361 prospective class members, and such a number is sufficiently numerous that joinder of all members would be impracticable.

         b. Commonality

         The commonality requirement is satisfied if there is at least one question of law or fact common to the class.[22] “Their claims must depend upon a common contention, ” such that the “determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.”[23]

         Here, all prospective class members worked in patient-facing positions at Eagleville Hospital that required them to work through meal breaks and were subject to the same timekeeping policies that prevented them from recording time worked during their meal breaks. Moreover, they seek similar legal remedies pursuant to the FLSA and the PMWA. These shared legal and factual issues are sufficient to satisfy the commonality requirement.

         c. Typicality

         The typicality requirement is satisfied if the claims of the representative parties are typical of the claims of the class.[24] The typicality requirement is specifically “designed to align the interests of the class and the class representatives so that the latter will work to benefit the entire class through the pursuit of their own goals, ”[25] and to avoid situations where the legal theories of the named plaintiffs conflict with the legal theories of the absentees.[26] “Class members are not required to have identical claims or underlying factual circumstances; if the claims at issue arise from the same practice or course of conduct, or are based on the same underlying legal theory, the typicality requirement will be satisfied.”[27]

         Here, as discussed above, the Named Plaintiffs' claims are based on Defendant's alleged failure to compensate them for time spent working during meal breaks, and they seek compensation for this unpaid time. The prospective class members have claims that rely on the same policies and procedures and entitle them to the same types of relief. Thus, the interests of the Named Plaintiffs align with those of the prospective class members, and the typicality requirement is satisfied.

         d. Adequacy of Representation

         Class members are adequately represented if class counsel is qualified to represent the class and the interests of the class representatives are not in conflict with the interests of the class members.[28] Here, Class Counsel, including Mr. David Cohen, and other members of the law firm, Stephan Zouras LLP, are experienced in handling class and collective actions, including cases arising under the FLSA and other wage and hour laws, and have represented Plaintiffs and the prospective class competently throughout the course of this litigation and during settlement negotiations. In addition, as discussed above with respect to typicality, the interests of the Named Plaintiffs are appropriately aligned with those of the other prospective class members.

         2. Rule 23(b) Requirements

         If the Court determines that a putative class satisfies the requirements of Rule 23(a), it must also determine whether the class falls into one of the categories enumerated in Rule 23(b). Plaintiff in this action seeks certification under Rule 23(b)(3), which provides:

A class action may be maintained if Rule 23(a) is satisfied and if the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy. The matters pertinent to these findings include: (A) the class members' interests in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already begun by or against class members; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and (D) the likely difficulties in managing a class action.[29]

         These two requirements are generally referred to as “predominance” and “superiority.”[30] When assessing predominance and superiority for settlement purposes only, a showing of manageability of trial is not required.[31]

         a. Predominance

          “The predominance inquiry tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation, and assesses whether a class action would achieve economies of time, effort, and expense, and promote uniformity of decision as to persons similarly situated.”[32] This requirement imposes a more “rigorous obligation” upon the Court than Rule 23(a)'s commonality requirement.[33] In analyzing predominance, the focus of the Court's inquiry is on “whether [the] defendant's conduct was common as to all of the class members, and whether all of the class members were harmed by the defendant's conduct.”[34]

         Here, as discussed, Plaintiffs have alleged that Defendant engaged in a common course of conduct that harmed all class members, specifically, that Defendant required certain categories of employees to work during meal breaks without providing a system for logging such hours, and thus failed to compensate the employees for that time. Accordingly, the Court finds that the issues common to the prospective class members predominate over their individual issues.

         b. Superiority

         To satisfy the superiority test, the Court must “balance, in terms of fairness and efficiency, the merits of a class action against those of alternative available methods of adjudication.”[35] Here, the record in this case does not indicate a strong interest among class members in individually controlling the prosecution of a separate action. As discussed, none have opted out of, or objected to, the terms of the parties' settlement. Moreover, Plaintiffs have calculated the maximum total compensatory damages for the class to be approximately $491, 666.00, providing an average individual recovery of less than $1, 400. This amount provides relatively little incentive for individuals to bring separate lawsuits to vindicate their rights.[36] In addition, because all the alleged relevant conduct took place at one local hospital, this Court is the most convenient forum for litigating all of the class members' claims. For these reasons, the superiority requirement is satisfied.

         Because Plaintiffs have satisfied the relevant requirements of Rule 23 to obtain class certification, the Court will certify the class for purposes of settlement.

         B. FLSA Collective Certification

         Where, as here, a Court has already conditionally certified a FLSA collective, a Court must make “a conclusive determination as to whether each plaintiff who has opted into the collective action is in fact similarly situated to the named plaintiff” prior to granting final certification.[37] In deciding whether the proposed collective members are in fact similarly situated, the Court considers: “whether the plaintiffs are employed in the same corporate department, division, and location; whether they advance similar claims; whether they seek substantially the same form of relief; and whether they have similar salaries and circumstances of employment.”[38]

         Here, as discussed, the 71 FLSA opt-in members each worked in patient-facing roles at Eagleville Hospital's single location in Eagleville, Pennsylvania. Each is asserting FLSA and PMWA claims based on time worked during unpaid meal breaks, and seek compensation for their unpaid work. While the members of the collective do have different salaries, titles, and work schedules, their pay and conditions of employment are sufficiently comparable for their interests to be aligned. Thus, the 71 opt-in members of the FLSA collective are similarly situated to the Named Plaintiffs, and the Court will grant final certification for purposes of this settlement.

         C. Fairness of the Proposed Settlement

         1. Initial Presumption of Fairness

         In this Circuit, a settlement is entitled to an initial presumption of fairness where it resulted from arm's-length negotiations between experienced counsel, there was sufficient discovery, and there were no objectors and only a small percentage of opt-outs.[39] Here, the Court finds that the settlement is entitled to an initial presumption of fairness. The settlement resulted from multiple days of arms-length negotiations between experienced counsel, before an experienced and independent mediator. In addition, Class Counsel outlined the factual investigation undertaken prior to settlement, which includes a detailed review of the pay records of each of the FLSA collective members. Moreover, there are no objectors and or opt-outs to the settlement. In light of these considerations, the settlement is entitled to an initial presumption of fairness.

         2. The Settlement Satisfies the Girsh Factors

         After determining whether an initial presumption applies, the courts must also consider the nine factors articulated by the Third Circuit in Girsh v. Jepson[40] in evaluating whether a proposed settlement is fair, adequate, and reasonable:

(1) the complexity, expense and likely duration of the litigation; (2) the reaction of the class to the settlement; (3) the stage of the proceedings and the amount of discovery completed; (4) the risks of establishing liability; (5) the risks of establishing damages; (6) the risks of maintaining the class action through the trial; (7) the ability of the defendants to withstand a greater judgment; (8) the range of reasonableness of the settlement fund in light of the best possible recovery; (9) the range of reasonableness of the settlement fund to a possible recovery in light of all the attendant risks of litigation.[41]

         The Court may make findings regarding the Girsh factors where appropriate, [42] and may not “substitute the parties' assurances or conclusory statements for [its own] independent analysis of the settlement terms.”[43]

         a. Complexity, Expense and Duration of Litigation

         This first Girsh factor requires the Court to consider “the probable costs, in both time and money, of continued litigation.”[44] This action involves complex factual issues relating to Defendant's policies and practices that, if litigated to trial, would require substantial additional class-wide merits and damages discovery, including depositions of Plaintiffs and significant numbers of Defendant's employees, as well as extensive motion practice concerning class certification and summary judgment. Considering the likely long duration of such litigation, a settlement at this stage avoids the significant costs and risks associated with protracted litigation. For these reasons, this factor weighs in favor of settlement.

         b. Reaction of Class to Settlement

         The second Girsh factor also weighs in favor of settlement. As discussed, no potential class members have objected to, or sought exclusion from, the proposed settlement. These facts indicate consent on the part of the class to the terms of the settlement.[45] Accordingly, the ...

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