United States District Court, M.D. Pennsylvania
D. MARIANI UNITED STATES DISTRICT JUDGE
before the Court is the Joint Motion of Plaintiff Christine
Kutz ("Kutz") and Defendant Cargill Cocoa &
Chocolate, Inc. ("Cargill") (Doc. 20) for judicial
approval of the parties' settlement agreement. The
parties seek to resolve Kutz's claims against Cargill
under the Fair Labor Standards Act ("FLSA"), 29
U.S.C. § 201 et seq., the Pennsylvania Minimum
Wage Act ("PMWA"), 43 Pa. C.S. § 333.101
et seq., and the Pennsylvania Wage Payment and
Collection Law ("PWPCL"), 43 Pa. C.S. § 260.1
Factual background and Procedural history
Christine Kutz was employed as a Food Safety Quality &
Regulatory Technologist with Cargill from on or about April
20, 2015 to in or about April, 2018 (Doc. 13, ¶ 1).
According to the Amended Complaint, Kutz "was not paid
overtime wages during the limitations period."
(Id. at ¶ 12). Kutz asserts that she was
classified as a "non-exempt" employee for FLSA
purposes when she was hired on or around April 20, 2015, but
that "[i]n or around August 2015, Defendant
re-classified Ms. Kutz's position as 'exempt',
though neither the position nor its requirements had
changed." (Id. at ¶¶ 13, 14).
commenced this action by filing a five-count Complaint on
January 31, 2019, asserting violations of the FLSA, the PMWA,
the PWPCL (Counts I-III), as well as additional counts for
breach of oral contract (Count IV) and unjust enrichment
(Count V). (Doc. 1).
April 12, 2019, Cargill filed a "Partial Answer and
Affirmative Defenses to Count I and II of the
Complaint." (Doc. 9). While Cargill admitted that it
employed Plaintiff as a Food Safety Quality & Regulatory
Technologist, it denied her claims for overtime on the basis
that she was exempt under the FLSA and Pennsylvania law.
(Id. at 4-6 (Def.'s Answer to ¶¶ 12,
13, 14, 15, 16 of Pl.'s Compl.)). Cargill also asserted
that Plaintiff "was appropriately classified as exempt
under the FLSA and Pennsylvania law and, therefore, was not
entitled to overtime compensation for working more than 40
hours per week." (Id. at 8 (Def.'s Answer
to ¶ 24 of Pl.'s Compl.)). Cargill denied that it
failed to pay Plaintiff overtime at one and one-half times
Plaintiffs regular rate of pay for all hours worked over 40
in a work week and denied that its actions were
"willful, intentional and malicious". (Id.
at 8 (Def.'s Answer to ¶¶ 25, 26, 27 of
Pl.'s Compl.)). Cargill likewise denied the allegations
of Count II of Plaintiffs Complaint with respect to the PMWA.
respect to Counts III, IV and V of Plaintiffs Complaint,
Cargill filed a Motion to Dismiss (Doc. 10) on April 12, 2018
and a brief in support thereof (Doc. 10-1) on that same date.
response, Kutz filed an Amended Complaint (Doc. 13) on May 3,
2019. That Complaint again asserted violations by Cargill of
the FLSA (Count I), violations of the PMWA (Count II) and
violations of the PWPCL (Count III). Kutz did not include in
her Amended Complaint the prior causes of action for breach
of oral contract and unjust enrichment which had been
asserted in her original Complaint.
Cargill on May 17, 2019 filed its Answer and Affirmative
Defenses to Plaintiffs First Amended Complaint. (Doc. 18).
Cargill again admitted that Kutz was Cargill's employee
from on or about April 2015 until August, 2018 as a Food
Safety Quality & Regulatory Technologist but otherwise
denied that Plaintiff was entitled to overtime because she
was exempt under the FLSA and Pennsylvania law. (See
generally id.; Def.'s Answer to ¶¶ 12,
13, 14, 15, 16, 20, 24, 25, 26, 27, 28, 29, 32, 33, 34, 35,
36, 39, 40, 41, 42, 43, 44, 45 and 46 of Pl.'s Am.
also set forth various affirmative defenses including the
affirmative defense that "Plaintiff's claims are
barred in whole or in part because Plaintiff was exempt from
the maximum hours/overtime pay requirement pursuant to
Section 13(a)(1) of the Fair Labor Standards Act, 29 U.S.C.
§ 213 (a)(1) and the Pennsylvania Minimum Wage
Act." (Doc. 18 at 14).
14, 2019, this Court ordered this case to mediation (Doc.
17). Gerard J. Geiger, Esquire, was appointed as mediator. On
June 12, 2019, the mediator filed a report advising the Court
that the case had been completely settled and that Court
approval of the settlement was required. (Doc. 19).
to the terms of the settlement agreement and limited release,
Cargill agreed to pay Kutz the total gross amount of
[XXXXX] payable in accordance with
the terms of the settlement agreement.
Legal Standard for Approval of a Settlement Agreement under
Howard v. Philadelphia Housing Authority, the
District Court set forth the legal standard by which a
settlement agreement of claims under the FLSA must be
FLSA claims may be compromised or settled in two ways: (1)
supervision by the Department of Labor, pursuant to 29 U.S.C.
§ 216(c), or (2) approval by the district court,
pursuant to 29 U.S.C. § 216(b). Adams v. Bayview
Asset Mgmt, LLC, 11 F.Supp.3d 474, 476 (E.D.Pa. 2014).
The parties proceed under the second avenue - approval by the
district court. Without guidance from the Third Circuit,
district courts within this Circuit have looked to the
standard set forth by Eleventh Circuit in Lynn's Food
Stores, Inc. v. United States, 679 F.2d 1350 (11th Cir.
1982), when a party seeks judicial approval of an FLSA
settlement agreement pursuant to 29 U.S.C. § 216(b).
See Mabry v. Hildebrandt, No. 14-5525, 2015 WL
5025810, at *3 (E.D.Pa. Aug. 24, 2015) (collecting cases).
Under the Lynn's Food standard, "[w]hen
parties present to the district court a proposed settlement,
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' rather than 'a mere waiver of statutory
rights brought about by an employer's
overreaching.'" Cuttic v. Crozer-Chester Med.
Ctr., 868 F.Supp.2d 464, 466 (E.D.Pa. 2012) (quoting
Lynn's Food, 679 F.2d at 1354); see also Lyons v.
Gerhard's Inc., No. 14-06693, 2015 WL 4378514, at *3
(E.D.Pa. July 16, 2015) (applying the Lynn's
If the Court determines that the settlement concerns a
"bona fide dispute," it will conduct a two-part
fairness inquiry to ensure that (1) the settlement is fair
and reasonable for the employee(s), and (2) the agreement
furthers the FLSA's implementation in the workplace.
See Mabry, 2015 WL 5025810, at *3; McGee v.
Ann's Choice, Inc., No. 12-2664, 2014 WL 2514582, at
*2 (E.D.Pa. June 4, 2014). The Court uses this standard to
assess the propriety of FLSA collective action settlements
and private (i.e., single-plaintiff) FLSA settlements alike.
Kraus v. PA Fit II, LLC, No. 15-4180, 155 F.Supp.3d
516, 524-25, 2016 WL 125270, at *5 (E.D.Pa. Jan. 11, 2016)
(explaining the rationale for applying the Lynn's
Food standard to private FLSA settlements); see also
Mabry, 2015 WL 5025810, at *1-2 (collecting cases in
which the courts have applied the Lynn's Food
standard to private FLSA settlement agreements); Bettger
v. Crossmark, Inc., No. 13-2030, 2015 WL 279754, at *3-4
(M.D.Pa. Jan. 22, 2015) (same).
197 F.Supp.3d 773, 776-777 (E.D. Pa. 2016). See also
Berger v. Bell-Mark Tech. Corp., 2019 WL 1922325, at
*1-2 (M.D. Pa. 2019); Yong Li v. Family Garden II,
Inc., 2019 WL 1296258, at *1-2 (E.D. Pa. 2019).
the standard of review of a settlement agreement under the
FLSA having been delineated, the Court proceeds to analyze
the propriety of the proposed private FLSA settlement
Terms of Proposed Settlement
the terms of the proposed settlement, Cargill agrees to pay
Kutz the total gross amount of [XXXXX] to resolve Kutz's claims. Kutz will
receive [XXXXX] of the [XXXXX] payment and her counsel will receive
[XXXXX] representing payment of
Kutz's attorney's fees and costs. ("Settlement
Agreement and Limited Release", Doc. 20-1, ¶ 1(a),
exchange for payment as set forth above, the proposed
settlement agreement contains the following release and
confidentiality and non-disparagement clauses:
a. Kutz hereby irrevocably and unconditionally releases,
remises, and forever discharges Cargill and any and all
individuals acting on behalf of Cargill, including but not
limited to, all of Cargill's directors, officers,
employees or former employees, insurers, representatives,
attorneys, parents, subsidiaries, affiliates, predecessors,
successors, and assigns, and all persons acting by, through,
under or in concert with any of them (collectively, "the
Releasees") of and from any and all actions, suits,
debts, claims, liabilities, obligations, promises,
agreements, controversies, damages, and expenses of any
nature whatsoever, in law or equity, including claims for
attorney's fees and costs, which she has had or may have
had up until the date of this Agreement that relate to the
facts alleged in the Complaint or the Amended Complaint, the
claims asserted in the Lawsuit, and any claims that could
have been asserted in the Lawsuit based upon the facts
alleged in the Complaint or the Amended Complaint.
Particularly, but without limitation, Kutz so releases any
claims she has had or may have had against the Releasees
arising under the Fair Labor Standards Act, the Pennsylvania
Minimum Wage Act, the Pennsylvania Wage Payment and
Collection Law, any other federal, state, or local ordinance
relating to Cargill's payments to Kutz of wages or
overtime, and any claim under the common law (including but
not limited to breach of contract and unjust enrichment)
relating to Cargill's payments to Kutz of wages or
b. Kutz agrees, promises and covenants that she will not file
or permit to be filed in her name or on her behalf any
lawsuit in court against any of the persons or entities
released in this Agreement based upon any act or event
released by this Agreement. Kutz further agrees that should
any charge, lawsuit, complaint or other claim be filed or
pursued in her name or on her behalf with any governmental
agency, or in any other forum, against any of the persons or
entities released herein, based upon any act or event
released herein, she will not seek or accept any personal
relief based upon such charge, lawsuit, complaint or other
claim, including but not limited to an award of monetary
damages or reinstatement to her employment with Cargill,
provided that nothing in this Agreement is intended to
release claims related to the validity or enforcement of this
Agreement. Nothing in this Agreement limits or precludes Kutz
from filing a charge with the Equal Employment Opportunity
Commission ("EEOC") or participating in any
investigation or proceeding conducted by the EEOC, nor shall
it apply to any non-waivable charges or claims brought before
any other governmental agency.
c. Kutz represents and warrants that she has not assigned or
otherwise transferred to any person, party or entity any of
the claims, demands, actions, liabilities, obligations or
causes of action being released pursuant to this Agreement.
Kutz further agrees to indemnify the Releasees and to hold
them harmless from any claims, demands, actions, liabilities,
obligations and/or causes of action previously assigned or