United States District Court, M.D. Pennsylvania
H. RAMBO UNITED STATES DISTRICT JUDGE
before the court is a joint motion to approve a settlement
agreement. (Doc. 19.) For the reasons that follow, the motion
will be granted.
19, 2017, Plaintiff Shane Huyett commenced this action
against Defendants Brian Murlin, Becky Murlin, and Wizzard
Drain Cleaning, LLC asserting violations of the Fair Labor
Standards Act of 1938, 29 U.S.C. §§ 201-219
(“FLSA”), the Pennsylvania Wage Payment and
Collection Law, 43 P.S. § 260.2a (“PWPCL”),
and the Pennsylvania Minimum Wage Act of 1968, 43 P.S. §
333.103g (“PMWA”). (Doc. 1.) The complaint
alleges that Defendants violated the FLSA, PWPCL, and PMWA by
failing to pay overtime compensation and was terminated in
retaliation for complaining about the failure to compensate
for overtime work. (Id.) On June 26, 2018, the
parties filed a joint motion to approve the settlement
agreement. (Doc. 19). Under the settlement agreement,
Defendants have agreed to pay Plaintiff a total sum of $20,
000 in exchange for releasing Defendants from liability for
any and all legally waivable claims, demands, or actions he
may have against Defendants. (Doc. 19, ¶ 5.) The
settlement agreement further provides that Plaintiff sought
the advice of counsel prior to signing the agreement, that he
understands the agreement, and he is entering the agreement
voluntarily (Id. ¶ 8.) The parties concur that
the settlement agreement is a settlement “of a bona
fide dispute” and will “fully compensate
Plaintiff for any amounts which he claims may be due [to]
him.” (Id. ¶ 7.)
FLSA was enacted to “protect all covered workers from
substandard wages and oppressive working hours.”
Barrentine v. Arkansas-Best Freight Sys., 450 U.S.
728, 729 (1981). To safeguard employee rights, “a
majority of courts have held that bona fide FLSA
disputes may only be settled or compromised through payments
made under the supervision of the Secretary of the Department
of Labor or by judicial approval of a proposed settlement in
an FLSA lawsuit.” Bettger v. Crossmark, Inc.,
Civ. No. 13-cv-2030, 2015 WL 279754, *3 (M.D. Pa. Jan. 22,
2015) (citing Lynn's Food Stores, Inc. v. U.S. ex
rel. U.S. Dep't of Labor, 679 F.2d 1350, 1354 (11th
Cir. 1982)). While the Third Circuit Court of Appeals has not
addressed whether parties can settle FLSA suits for unpaid
wages without court approval, “district courts within
the Third Circuit have followed the majority position and
assumed that judicial approval is necessary.”
Id.; see also McGee v. Ann's Choice,
Civ. No. 12-cv-2664, 2014 WL 2114582 (E.D. Pa. June 4, 2014);
Owens v. Interstate Safety Serv., Inc., Civ. No.
17-cv-0017, 2017 WL 5593295 (M.D. Pa. Nov. 21, 2017).
Following the Eleventh Circuit's opinion in
Lynn's Food Stores, Inc. v. U.S. ex. rel. U.S.
Department of Labor, 679 F.2d 1350, 1355 (11th Cir.
1982), a proposed settlement agreement may satisfy judicial
review if it is a “fair and reasonable resolution of a
bona fide dispute over FLSA provisions.” A settlement
agreement resolves a bona fide dispute if its terms
“reflect a reasonable compromise over issues, such as .
. . back wages, that are actually in dispute.”
Id. If the court is satisfied that the settlement
agreement resolves a bona fide dispute, the court then
determines whether the agreement is fair and reasonable to
the plaintiff, and whether the settlement furthers or
“impermissibly frustrates” the implementation of
the FLSA. Bettger, 2015 WL 279754 at *4 (citing
Altenbach v. Lube Ctr., Civ. No. 08-cv-2178, 2013 WL
74251 (M.D. Pa. Jan. 4, 2013)).
court first addresses whether the settlement agreement
resolves a bona fide dispute between the parties. If the
agreement reflects a reasonable compromise of the issues in
this suit, the court can approve the settlement “to
promote the policy of encouraging settlement of
litigation.” Lynn's Food Stores, Inc., 679
F.2d at 1354. Here, the terms of the agreement itself (Doc.
19-1), as well as Plaintiff's complaint (Doc. 1) and
Defendant's answer (Doc. 12), demonstrate that a bona
fide dispute exists regarding whether Plaintiff worked
overtime, was entitled to overtime compensation, and was
fired for complaining about the lack of overtime
compensation. For example, Plaintiff alleges that he worked
in excess of forty hours per week without appropriate
overtime compensation, complained to Defendant Brian Murlin
about not being compensated for overtime hours, and was
terminated in retaliation for complaining. (Doc. 1,
¶¶ 16-22.) Defendants deny that Plaintiff worked
over forty hours per week and avers that Plaintiff never
complained to Defendant Brian Murlin about the lack of
overtime compensation. (Doc. 12, ¶¶ 16-22.) As the
court's obligation is “not to act as a caretaker
but as a gatekeeper, ” the court is satisfied that the
settlement agreement resolves a bona fide dispute between the
parties. See Joseph v. Caesar's Entm't
Corp., Civ. No. 10-cv-6293, 2012 WL 12898816, *2 (D.N.J.
July 23, 2012).
to the terms of the agreement itself, the court finds that
the settlement agreement is fair and reasonable to Plaintiff.
Plaintiff has been represented by counsel throughout this
litigation, has sought the advice of counsel prior to
entering into the settlement agreement, and has knowingly and
voluntarily entered into the agreement with full knowledge of
its significance. (See Doc. 19.) Furthermore,
Plaintiff is being compensated for an amount that he claims
may be due to him in connection with his employment with
Defendants and this agreement is the byproduct of arms'
length negotiations between represented parties.
(Id. ¶ 16.)
the court finds that the settlement agreement does not
impermissibly frustrate the implementation of the FLSA.
Paragraph 10 of the agreement contains a confidentiality
provision. (Doc. 19-1, ¶ 10.) “There is
‘broad consensus' that FLSA settlement agreements
should not be kept confidential.” Diclemente v.
Adams Outdoor Advert., Inc., Civ. No. 15-cv-0596, 2016
WL 3654462, *4 (M.D. Pa. July 8, 2016). However,
confidentiality provisions that are narrowly tailored and do
not contain any sanctions may be permissible. Id. In
this matter, the confidentiality provision permits Plaintiff
to disclose the contents of the settlement agreement to his
family, agents, servants, representatives, attorneys,
successors, or assigns, as well as permitting disclosure for
legal, financial, tax, or business purposes. (Doc. 19-1,
¶ 10.) Further, the provision does not contain any
sanctions against Plaintiff and does not permit Defendant to
retaliate against Plaintiff if he violates the
confidentiality provision. (Id.) Accordingly,
neither the confidentiality provision, nor the settlement
agreement as a whole, frustrate the implementation of the
FLSA. See id.
reasons stated herein, the joint motion to approve the
settlement agreement (Doc. 19) is GRANTED.