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Peck v. Encana Oil & Gas, Inc.

United States District Court, D. Colorado

February 22, 2018

MICKEY L. PECK, individually and on behalf of all other similarly situated, Plaintiff,
ENCANA OIL & GAS, INC., Defendant.



         This matter is before the Court on the Parties' Joint Motion to Approve Settlement Agreement. (Doc. # 67.) For the following reasons, the Court grants the motion, approves the confidential Settlement (Doc. # 69), and dismisses this case.

         I. BACKGROUND

         Plaintiff Ronald Dent commenced this action against Defendant Encana Oil & Gas (USA) Inc. in August 2015 alleging that Defendant violated the Fair Labor Standards Act (FLSA) and the Colorado Wage Claim Act (CWCA) by failing to pay him “time and a half” for work in excess of 40 hours per week. (Doc. # 3.) As pertinent here, in addition to prosecuting these claims on his own behalf, Plaintiff Dent sought to bring his FLSA claim as a collective action. (Doc. # 33.) The parties later stipulated to, and the Court approved, the conditional certification of “[a]ll current and former Completion Consultants, and all other workers in substantially similar positions, classified as independent contractors by Defendant between January 27, 2104 to the present, and who are not individual signatories to an arbitration agreement with Defendant.” (Doc. # 56.) Notice was subsequently circulated and, as pertinent here, two Plaintiffs opted into this case on August 9, 2017. (Doc. # 60.) After months of litigation and candid negotiations, all three Plaintiffs and the Defendant represent that they have reached an agreed-upon Settlement for this Court's approval.


         In a 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).

         In order to approve a settlement, the Court reviews the proposal to ensure (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.


         Parties requesting approval of an FLSA settlement must provide the Court with sufficient information to determine whether a bona fide dispute exists. 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. 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. at 719-20.

         In the proposed Settlement, Plaintiffs provide a thorough description of the nature of the dispute, Defendant's business, and the type of work performed by Plaintiffs. There is also a clear description of the Plaintiffs' justification for the disputed wages and Defendants' reasons for disputing the Plaintiffs' right to additional compensation. The Parties likewise disagree about the merits of Plaintiffs' claims and the validity of Defendant's defenses. Plaintiffs acknowledge that resolution of these issues would therefore require significant litigation, with the possibility of limited to no recovery on either side.

         The Court finds that a bona fide dispute exists.


         To be fair and reasonable, an FLSA settlement must provide adequate compensation to the employees and must not frustrate the FLSA policy rationales. Baker v. Vail Resorts Mgmt. Co., Case No. 13-CV-01649-PAB-CBS, 2014 WL 700096, at *2 (D. Colo. Feb. 24, 2014). When determining whether a settlement is fair and reasonable, courts weigh a number of factors, including: (1) the extent of discovery that has taken place; (2) the stage of the proceedings, including the complexity, expense and likely duration of the litigation; (3) the absence of fraud or collusion in the settlement; (4) the experience of counsel who have represented the plaintiffs; (5) the probability of plaintiffs' success on the merits and (6) the amount of the settlement in relation to the potential recovery. Hargrove v. Ryla Teleservices, Inc., Case No. 2:11CV344, 2013 WL 1897027, at *2 (E.D. Va. Apr. 12, 2013) (citation omitted). There is a strong presumption in favor of finding a settlement fair. Id.

         The Parties in this suit enjoy representation from experienced counsel, and this Court attributes significant weight to their professional judgment that this agreement represents a fair and reasonable settlement of this dispute. Further, the Court finds that this settlement is a product of arms-length negotiations that took place over the course of months. The settlement also delivers fair value to Plaintiffs, who will receive ...

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