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Blocklin v. Black Pepper PHO, LLC

United States District Court, D. Colorado

November 14, 2014

CHELSEA BLOCKLIN, JALEN AQUINO, HUYEN TRAN DUONG, JACQUELINE DALLMAN, KHAI TRAN, and PHUONG-ANH CAI, On their own behalf and on behalf of all others similarly situated, Plaintiffs,
v.
BLACK PEPPER PHO, LLC, HUONG DANG, and CHRISTOPHER JOHN, Defendants

For Chelsea Blocklin, Jalen Aquino, Huyen Tran Duong, Jacqueline Dallman, Khai Tran, Phuong-Anh Cai, on their own behalf and on behalf of all others similarly situated, Plaintiffs: Brandt Powers Milstein, LEAD ATTORNEY, Milstein Law Office, Boulder, CO.

Black Pepper Pho, LLC, Defendant, Pro se, Thornton, CO.

Huong Dang, Defendant, Pro se, Thornton, CO.

Christopher John, Defendant, Pro se, Thornton, CO.

RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

Kristen L. Mix, United States Magistrate Judge.

This matter is before the Court on the parties' Renewed Joint Motion for Court Approval of Settlement [#32][1] (the " Motion"). The Motion has been referred to the undersigned for recommendation. [#33]. The parties request that the Court approve a proposed settlement agreement, which resolves Plaintiffs' four claims brought pursuant to the Fair Labor Standards Act (" FLSA"), 29 U.S.C. § 201 et seq.: (1) unlawful tip pooling, (2) unlawful meal break deductions, (3) unlawful payment of tip-credited minimum wage, and (4) unlawful appropriation of tips. Compl . [#1] ¶ ¶ 41-80.

In the context of a private lawsuit brought by an employee against an employer under section § 216(b) of the FLSA, an employee may settle and release FLSA claims against an employer if the parties present the district court with a proposed settlement and the district court enters a stipulated judgment approving the fairness of the settlement. Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350, 1353 (11th Cir. 1982)); see also D. A. Schulte, Inc. v. Gangi, 328 U.S. 108, 113 n.8, 66 S.Ct. 925, 90 L.Ed. 1114 (1946); Jarrad v. Se. Shipbuilding Corp., 163 F.2d 960, 961 (5th Cir. 1947). In detailing the circumstances justifying court approval of an FLSA settlement in a litigation context, the Eleventh Circuit has stated as follows:

Settlements may be permissible in the context of a suit brought by employees under the FLSA for back wages because initiation of the action by the employees provides some assurance of an adversarial context. The employees are likely to be represented by an attorney who can protect their rights under the statute. Thus, when the parties submit a settlement to the court for approval, the settlement is more likely to reflect a reasonable compromise of disputed issues than a mere waiver of statutory rights brought by an employer's overreaching. If a settlement in an employee FLSA suit does reflect a reasonable compromise over issues, such as FLSA coverage or computation of back wages that are actually in dispute, we allow the district court to approve the settlement in order to promote the policy of encouraging settlement of litigation.

Lynn's Food Stores, 679 F.2d at 1354.

I. Analysis

In Baker v. Vail Resorts Management Company, No. 13-cv-01649-PAB-CBS, 2014 WL 700096, at *3 (D. Colo. Feb. 24, 2014), the Court held that " [t]o 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." To demonstrate those factors, parties must generally describe the nature of and facts at issue in the action, show that the proposed settlement provides adequate compensation to the plaintiff, and provide for reasonable attorney's fees in the proposed settlement. Id. at *3-8. The Court addresses each of these factors in turn.

A. Bona Fide Dispute

The Court must first determine whether the parties have provided sufficient information to determine whether a bona fide dispute exists. Id. at *1. " The mere existence of an adversarial lawsuit is not enough to satisfy the bona fide dispute requirement." Id. Sufficient information regarding a bona fide dispute consists of the following: " (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; ...


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