United States District Court, D. Colorado
ADAN RIOS, JAMIE BANUELOS, JOSE ANGEL GUTIERREZ, MILTON RANGEL, LAZARO HERNANDEZ, HUASCAR POLANCO, WILMER POLANCO, LEOPOLDO RODRIGUEZ, and OSCAR GONZALEZ, on their own behalf and on behalf of all others similarly situated, Plaintiffs,
MIDWEST PARTITIONS, INC., D & F PARTITIONS, LLC, YOLKINS RES/COM DRYWALL, INC., ALLEN HALL, CESAR QUINTANA, MARCOS GUTIERREZ, JAVIER MARTINEZ DRYWALL LLC, and JAVIER MARTINEZ, Defendants.
A. BRIMMER United States District Judge.
matter is before the Court on a Joint Motion for Court
Approval of Settlement. Docket No. 56. Plaintiffs and
defendants Midwest Partitions, Inc. and Allan Hall
(collectively the “Midwest defendants”) request
that the Court approve their settlement of plaintiffs'
claims brought pursuant to the Fair Labor Standards Act
(“FLSA”), 29 U.S.C. § 201 et seq.
are two groups of plaintiffs in this case. Docket 56 at 2-3.
Group 1 was employed directly by the Midwest defendants to
work on drywall projects at two construction sites.
Id. Group 2 was employed by subcontractors to
perform work at those same sites. Id. The parties
dispute whether the Midwest defendants were a joint employer
of Group 2. Id. at 4.
complaint alleges that the Midwest defendants and the other
defendants failed to pay statutorily required premiums for
overtime work - hours worked after forty hours in a work week
- at two construction projects in Denver, Colorado.
Id. The Midwest defendants were contracted to
install drywall at two Denver construction projects.
Id. at 4-5. The Midwest defendants entered into
agreements with several subcontractor defendants, which
required those subcontractors to furnish employees with
experience installing drywall. Id. Each plaintiff in
Group 1 was an hourly employee, paid by the Midwest
defendants. Id. Each plaintiff in Group 2 was an
hourly employee, paid by a subcontractor defendant to perform
drywall installation at one of the two construction projects.
the subcontractor defendants has answered the complaint or
participated in discovery in this lawsuit. The clerk of the
court entered default against each of the subcontractor
defendants [Docket Nos. 53-55] and the subcontractor
defendants are not parties to the proposed settlement
settlement agreement is between the named plaintiffs,
individually and “for others similarly situated,
” and the Midwest defendants. Docket No. 56-1. On March
29, 2016, the magistrate judge conditionally certified a
class consisting of “Current and Former Employees of
MIDWEST PARTITIONS, INC. who worked in 2014 and/or 2015 at
the construction projects at 1350 Glenarm Place, Denver,
Colorado 80202; 360 South Monroe Street, Denver, Colorado or
both, ” and gave class members 30 days from the mailing
of the notice to opt into the class. See Docket Nos.
39, 46. Exhibits 1 and 2 to the Settlement Agreement list the
opt-in plaintiffs and named plaintiffs who are the
beneficiaries of the settlement. Exhibit 1 identifies eleven
individuals in Group 1 and their proposed settlement amounts.
Docket No. 56-2. Exhibit 2 identifies eight individuals in
Group 2 and their proposed settlement amounts. Docket No.
the settlement agreement, the Midwest defendants have agreed
to pay Group 1 premiums for overtime worked and the
statutorily described liquidated damages on such premiums.
Id. at 3. Each Group 1 plaintiff will be compensated
based on the number of hours he worked, and receive a
corresponding amount of liquidated damages. Id.
Therefore, the proposed settlement agreement is not a
compromise as to Group 1.
the Midwest defendants do not have payroll records for the
Group 2 plaintiffs, they are unable to determine the exact
amount owed to each Group 2 plaintiff. Id. at 5.
Instead, the Midwest defendants have agreed to pay the Group
2 plaintiffs premiums for overtime worked based upon the
number of hours each Group 2 plaintiff alleges he worked. The
Midwest defendants have not agreed to pay liquidated damages
to the Group 2 plaintiffs. Therefore, the proposed settlement is a
compromise as to Group 2.
suit by employees 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). Requiring
court approval of FLSA settlements effectuates the purpose of
the statute, which is to “protect certain groups of the
population from substandard wages and excessive hours . . .
due to the unequal bargaining power as between employer and
employee.” Brooklyn Sav. Bank v. O'Neil,
324 U.S. 697, 706 (1945).
Final Class Certification
FLSA provides that an employee or employees may bring an
action “[on] behalf of himself or themselves and other
employees similarly situated.” 29 U.S.C. § 216(b).
Courts determine whether plaintiffs are “similarly
situated” for purposes of FLSA collective action
certification in two stages. Thiessen v. GE Capital
Corp., 267 F.3d 1095, 1105 (10th Cir. 2001). A
court's initial certification comes at the notice stage,
where courts use a fairly lenient standard to determine
whether plaintiffs are similarly situated for purposes of
sending notice to putative class members. Id. at
1102. In this case, an opt-in notice was approved by the
magistrate judge. Docket No. 46. After discovery, a court
makes a final class certification using a stricter standard.
See Thiessen, 267 F.3d at 1102-03. In order to
approve a settlement prior to a final collective action
ruling, “the Court must make some final class
certification finding.” Whittington v. Taco Bell of
Am., Inc., No. 10-cv-01884-KMT-MEH, 2013 WL 6022972, at
*2 (D. Colo. Nov. 13, 2013) (citing Peterson v. Mortgage
Sources, Corp., 2011 WL 3793963, at *4 (D. Kan. Aug. 25,
deciding whether to certify a collective action, courts
consider several factors, including: (1) the disparate
factual and employment settings of individual plaintiffs; (2)
various defenses available to defendant which appear to be
individual to each plaintiff; and ...