United States District Court, D. Colorado
SHARYLE A. SOLIS, Plaintiff,
TOP BRASS, INC., Defendant.
ORDER APPROVING SETTLEMENT
KATHLEEN M. TAFOYA, Magistrate Judge.
This matter is before the court on the parties' "Joint Motion for Court Approval of Settlement" [Doc. No. 20] ("Joint Mot.).
Plaintiff has asserted claims under the Fair Labor Standards Act, 29 U.S.C. §§ 201, et seq. ("FLSA") arising out of Defendant'z alleged failure to appropriately compensate her for hours worked over forty in any given week and for making one-half hour daily deductions from Plaintiff's pay for non-bona fide meal breaks. (Compl. ¶¶ 25, 33.)
Defendant Top Brass, Inc. employed Plaintiff as a bookkeeper at its Salida plant from May 1, 2011 through August 28, 2013. ( Id. at ¶ 12.) Plaintiff was paid on a weekly basis. Plaintiff alleges that when she worked less than forty hours per week, her wages were calculated on a straight hourly basis. ( Id. at ¶ 14.) Plaintiff alleges her pay was reduced improperly, however, when she worked more than forty hours in a given work week by paying her for a maximum of forty hours no matter how many extra hours she worked. ( Id. at ¶ 15.) By example Plaintiff alleges that her wages during the week of February 27, 2012 were $1, 120.00 (40 times; $28.00 [hourly wage]) even though she worked forty-six and one-half hours, instead of $1393.00 (40 × $4 $28.00 plus 6.5 × $42 [time and a half] =$273.00; $1, 120.00 $273=$1, 393.00). ( Id. ) However, she alleges that during the week of January 9, 2012, she worked thirty-six hours and her weekly wage was decreased to $1, 008.00 (36 × $28.00). ( Id. at ¶ 14.) Plaintiff also alleges that Defendant made a one-half hour meal break deduction for each day she worked for Defendant, even though she was not completely relieved from her job duties during meals and frequently ate lunch at her desk while answering phone calls incoming to Defendant's business. ( Id. at ¶ 18.) She also claims that her meal breaks were often interrupted by other employees, as well as by her manager and the Defendant's CPA, to discuss business. ( Id. )
Plaintiff filed this case on January 27, 2014, and the Defendant filed its answer on February 19, 2014. A Scheduling Order was entered on May 6, 2014, and in conjunction with filing their consent to the jurisdiction of the Magistrate Judge [Doc. No. 21], filed the Joint Motion.
"Congress enacted the FLSA in 1938 with the goal of protect[ing] all covered workers from substandard wages and oppressive working hours." Christopher v. SmithKline Beecham Corp., ___ U.S. ___, 132 S.Ct. 2156, 2162 (2012) (citation and internal quotation marks omitted). The "prime purpose" in enacting the FLSA "was to aid the unprotected, unorganized and lowest paid of the nation's working population; that is, those employees who lacked sufficient bargaining power to secure for themselves a minimum subsistence wage." Brooklyn Savings Bank v. O'Neil, 324 U.S. 697, 707 n.18 (1945).
To help further its goals, the FLSA provides that an employee or multiple employees may bring an action "in behalf of himself or themselves and other employees similarly situated." 29 U.S.C. § 216(b). When employees file suit against their employer to recover back wages under the FLSA, the parties must present any proposed settlement to the district court for review and a determination of whether the settlement agreement is fair and reasonable. See Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350, 1353 (11th Cir. 1982); Baker v. Vail Resorts Management Co., Case No. 13-cv-01649-PAB-CBS, 2014 WL 700096 (D. Colo. Feb. 24, 2014). Requiring court approval of FLSA settlements effectuates the purpose of the statute. Brooklyn Sav. Bank v. O'Neil, 324 U.S. at 706 (1945). To approve the settlement agreement, the Court must find that (1) the litigation involves a bona fide dispute, (2) the proposed settlement is fair and equitable to all parties concerned, and (3) the proposed settlement contains a reasonable award of attorneys' fees. Lynn's Food Stores, 679 F.2d at 1354; Baker, 2014 WL 700096, at *1.
A. Bona Fide Dispute
Parties requesting approval of an FLSA settlement must provide the Court with sufficient information to determine whether a bona fide dispute exists. Baker, 2014 WL 700096, at *1; Dees v. Hydradry, Inc., 706 F.Supp.2d 1227, 1234 (M.D. Fla. 2010). To meet this obligation, the parties must present: (1) a description of the nature of the dispute; (2) a description of the employer's business and the type of work performed by the employees; (3) the employer's reasons for disputing the employees' right to a minimum wage or overtime; (4) the employees' justification for the disputed wages; and (5) if the parties dispute the computation of wages owed, each party's estimate of the number of hours worked and the applicable wage. Id .; Collins v. Sanderson Farms, Inc., 568 F.Supp.2d 714, 718 (E.D. La. 2008). The mere existence of an adversarial lawsuit is not enough to satisfy the bona fide dispute requirement. Id.
Defendant operates an ammunition-casing reconditioning business. (Joint Mot. at ¶ 6.) As noted supra, Plaintiff claims that Defendant withheld payment, both at her regular and overtime rate, for hours worked in excess of 40 in any given week and deducted time for meal breaks where the Plaintiff was actually working. Plaintiff points to records from Defendant's electronic timekeeping system to show that she worked overtime. (Joint Mot. at ¶ 6.) Defendant admits that it did not pay Plaintiff on a salary basis (Answer [Doc. No. 11] at ¶ 3) and admits it "paid Plaintiff at an hourly rate for each hour worked up to forty (40) each workweek" (Ans. at ¶16) but otherwise denies the Plaintiff's allegations. Defendant also raised a number of affirmative defenses. Further, Defendant contends that Plaintiff manipulated Defendant's timekeeping system by making manual entries into the system rather than using the system's fingerprint scanner to clock in and clock out for work. (Joint Mot. at ¶ 6.) Additionally, Defendant contends that Plaintiff, whose job responsibilities included submitting weekly reports to Defendant's parent company for the processing of payroll for all of Defendant's hourly employees (including Plaintiff), submitted reports indicating that she routinely did not work overtime hours or through her lunch break, and that Defendant paid Plaintiff for all working hours that she reported to Defendant through her weekly payroll reports. ( Id. )
The Supreme Court has defined sham litigation as a lawsuit which is objectively baseless in the sense that no reasonable litigant could realistically expect success on the merits. Prof'l Real Estate Investors, Inc. v. Columbia Pictures Indus., 508 U.S. 49, 60-61 (1993). See also Total Renal Care, Inc. v. Western Nephrology and Metabolic Bone Disease, P.C., Case No. 08-cv-00513-CMA-KMT, 2009 WL 2596493, at *9 (D. Colo. Aug. 21, 2009). Sham litigation by definition does not involve a bona fide grievance. Protect Our Mountain Environment, Inc. v. District Court, 677 P.2d 1361, ...