United States District Court, M.D. Pennsylvania
C. Carlson, United States Magistrate Judge.
parties in this Fair Labor Standards Act (FLSA) action have
consented to magistrate judge jurisdiction and seek the
court's approval of a settlement proposal on behalf of
the individual named plaintiffs only. The factual background
of this dispute can be simply stated:
On July 19, 2019, the individual plaintiffs filed a lawsuit
under the FLSA, 29 U.S.C. §201, et seq., and
companion state laws, alleging that they had not been
properly paid for overtime which they had worked. (Doc. 1).
While the complaint and some subsequent pleadings made
reference to the potential existence of a larger collective
action beyond the claims of the named plaintiffs, from the
outset of this litigation it was evident that this case
involved what were predominantly individual claims between
the named parties, who were all acquainted with one another.
Thus, almost from the moment the case was filed, the
individual parties engaged in a series of conversations with
one another aimed at resolving what were primarily their
narrow, specific, and personal workplace disputes. (Docs. 12,
13, 14, 16). In order to ensure that these settlement
discussions, which commenced at the inception of this
litigation, proceeded in an orderly fashion, this case was
referred to the undersigned. (Doc. 18). We then agreed to
oversee these settlement discussions and directed all parties
to conduct further discussions through their respective
counsel in order to ensure that the parties engaged in
arms-length negotiations of this dispute. (Doc. 22).
arms-length negotiations culminated with the parties'
agreement on the terms of a settlement which related to what
had always been the primary concerns of these litigants-their
own specific, personal, and intramural work place
disagreements. Thus, the plaintiffs promptly disclaimed any
intention to pursue any broader collective claims, (Doc. 30),
the parties consented to magistrate judge jurisdiction,
(Docs. 28, 29), and the parties submitted their settlement
agreement to the court for its approval, as required by the
FLSA. Upon consideration of the agreement, and the
parties' supplemental submissions, this settlement is
approved as a fair, reasonable, and adequate resolution of
what the court finds was essentially a dispute between the
named parties only.
general rule, “[t]here are only two ways that FLSA
claims may be compromised or settled: (1) a compromise
supervised by the Department of Labor pursuant to 29 U.S.C.
§ 216(c), or (2) a compromise approved by the district
court pursuant to 29 U.S.C. § 216(b).” Kraus
v. PA Fit II, LLC, 155 F.Supp.3d 516, 522 (E.D. Pa.
2016). In conducting its review of a proposed FLSA
settlement, the court should determine whether the agreement
constitutes a fair and reasonable resolution of a bona fide
workplace dispute. The Court should then ascertain whether
the agreement is consistent with the goals of the FLSA.
Id. Moreover, “[i]n this Circuit, a settlement
is entitled to an initial presumption of fairness where it
resulted from arm's-length negotiations between
experienced counsel . . . .” Galt v. Eagleville
Hosp., 310 F.Supp.3d 483, 493 (E.D. Pa. 2018). However,
in evaluating whether that presumption applies, we are
enjoined to consider a multi-factor test which examines the
sufficiency of the settlement terms, the costs, risks, and
complexity of litigation, litigative risk, and enforceability
of any judgments that might be obtained through protracted
litigation. Id. (citing Girsh v. Jepson,
521 F.2d 153 (3d Cir. 1975)).
when, as in this case, a settlement entails the resolution of
individual claims only, there is one other consideration
which must be taken into account. The court must be satisfied
that resolution of the individual claims does not unduly
prejudice some larger collective which may have expectations
that claims are being actively pursued on their behalf.
See Dunn v. Teachers Ins. & Annuity Ass'n of
Am., No. 13-CV-05456-HSG, 2016 WL 153266, at *4 (N.D.
Cal. Jan. 13, 2016). This final consideration can often be
satisfied through a showing that the case has not been
subject to such notice or notoriety that expectations have
been created on behalf of a putative collective class that
their interests are being actively represented.
by these principles, we find that the proposed settlement in
this case is fair, reasonable, and adequate. We reach this
conclusion noting that, it is evident to the court that,
while cast as an FLSA action, much of this litigation
involved specific disputes between a discrete group of
individual parties. Thus, at this time, the broader interests
underlying the FLSA were only tangentially implicated in this
lawsuit. Moreover, the individual parties, whose specific
disagreements were at the heart of this litigation, swiftly
reached an agreement on the terms of a settlement of their
disputes. We have reviewed those settlement terms and find
that, as to the parties, the terms of their agreement are a
fair and reasonable resolution of their dispute. Furthermore,
the settlement terms make it clear that no persons other than
the named parties are encompassed by this agreement. Thus,
the releases agreed upon by the parties do not adversely
affect or prejudice any non-party interests. In addition, it
has been represented that that there is no indication that
any potentially broader collective exists who may be
detrimentally relying upon this litigation to vindicate their
legal rights. Further, given that the individual issues
between the parties predominate in this case, it would be
inappropriate to decline approval of this settlement, since
this lawsuit-which entails primarily narrow, specific, and
personal workplace disputes between the named parties-would
not be an appropriate legal vehicle for pursuit of potential
collective claims whose merits are unknown and cannot be
determined at this time.
finding: (1) that the terms of this settlement which resulted
from an arms-length negotiation are fair, reasonable, and
adequate as between the parties; (2) that the narrow scope of
the settlement does not prejudice any non-party interests;
(3) that there are no known non-parties who may be
detrimentally relying upon this litigation to vindicate their
legal rights; and (4) that the purposes of the FLSA are
satisfied through the prompt resolution of this specific
case, the settlement agreement will be approved.
appropriate order follows.
this 30th day of October 2019, upon consideration
of the Parties' Joint Stipulation of Dismissal, it is
ORDERED that the Stipulation is APPROVED as reasonable, fair,