United States District Court, D. Colorado
TYELER COOPER, on behalf of himself and all similarly situated persons, Plaintiff,
OFS 2 DEAL 2, LLC, f/k/a Vision Oil Tools, LLC, a Colorado limited liability company, KLX INC. and KLX ENERGY SERVICES LLC, d/b/a Vision Oil Tools and Vision Energy Services, both Delaware limited liability companies, Defendants.
RAYMOND P. MOORE UNITED STATES DISTRICT JUDGE
This matter is before the Court on the parties’ Joint Motion for Approval of Settlement Agreement (“Joint Motion”) (ECF No. 71) requesting approval of the parties’ settlement of this case and potential future claims. This case arises, in part, under the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. (the “FLSA”). After considering the Joint Motion, the court file, the arguments and representations of counsel at the hearing held March 10, 2016, and being otherwise fully advised, the Court approves the Joint Motion.
Plaintiff is Defendants’ former employee who, among other things, installed and performed maintenance on equipment for Defendants’ customers working in the Colorado oil fields. Plaintiff filed this Class and Collective Action Complaint against Defendants under the FLSA, the Colorado Wage Claim Act, § 8-4-101, et seq., and the Colorado Minimum Wage Act, C.R.S. § 8-6-101, et seq., as implemented by the Colorado Minimum Wage Order, seeking to recover unpaid overtime and unpaid compensation for rest breaks on behalf of himself and others similarly situated. Defendant OFS 2 Deal 2, LLC denied it was Plaintiff’s employer and that it violated the FLSA. (ECF No. 20.) Defendants KLX, Inc. and KLX Energy Services, LLC filed a Motion to Compel arbitration arguing Plaintiff - and putative class members - had agreed to arbitrate their compensation-based claims and waived their right to participate in a class or collective action. After Plaintiff raised issues of fact regarding the validity of the arbitration agreement, the parties agreed to discuss settlement.
On January 27, 2016, the parties notified the court they had reached a settlement in principle and requested a stay of all deadlines. No request for conditional certification of a collective action had yet been filed with the court.
On February 4, 2016, the parties filed the Joint Motion and an Unopposed Motion for Leave to File Under Seal (the “Unopposed Motion”) the parties’ Settlement Agreement and Release and its exhibits (collectively, “Settlement Agreement”). The Unopposed Motion was denied without prejudice for failure to meet the requirements under the Local Rules and applicable law. (ECF Nos. 68, 70.)
Thereafter, the parties filed: (1) an Unopposed Motion for Leave to File Under Seal (the “Second Unopposed Motion”) (ECF No. 73) seeking to restrict the Settlement Agreement under a Level 1 restriction; and (2) an unredacted copy of the Settlement Agreement (ECF No. 72), with a Level 1 restriction pending ruling on the Second Unopposed Motion. On March 10, 2016, the Court held a fairness hearing on the Joint Motion and on the requested sealing of the Settlement Agreement.
During the hearing, Defendants advised they have informally provided Plaintiff’s counsel with the information he would have received had a conditional collective action been certified and had the parties engaged in discovery, e.g., information as to the persons who would comprise the class and their wage and hour data. The parties advised they agreed that the named parties would settle their dispute, but the scope of the settlement would allow Defendants’ other employees - who may have been within the scope of any collective action - to be given notice of the settlement and to join in the settlement, if they wish to do so. Such other employees consist of 17 individuals (the “Other Employees”), and Plaintiff’s counsel represented to the Court he would reach out to these other employees, answer their questions, and make sure they are aware of the settlement terms. Despite the representation in the Settlement Agreement that the parties intended to do so (ECF No. 76, page 5, ¶ 13.a.), the parties did not seek and the Court did not grant certification of any “Settlement Class.”
Also during the hearing, after consideration of the attorneys’ representations and evaluating the issues under the applicable law, the Court granted leave to seal the unredacted Settlement Agreement but ordered the parties to file a redacted copy accessible by the public. The parties did so on March 11, 2016. The Court also advised the parties that it would issue a written order granting the Joint Motion. This Order does so.
II. LEGAL STANDARDS
Courts have held that settlements of FLSA actions such as this one may require court approval. Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350, 1353 (11th Cir. 1982); Baker v. Vail Resorts Mgmt. Co., Case No. 13-CV-01649, 2014 WL 700096, at *1 (D. Colo. Feb. 24, 2014). Approval should be granted when: (1) the FLSA settlement is reached as a result of 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. Whether a Bona Fide Dispute Exists
Parties requesting approval of an FLSA settlement should 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, 1241-42 (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 employee’s right to a minimum wage or overtime; (4) the employee’s justification for the disputed wages; and (5) if the parties dispute the computation of wages owed, each party’s ...