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Teague v. Acxiom Corp.

United States District Court, D. Colorado

August 9, 2018

CHRISTOPHER TEAGUE, Plaintiff,
v.
ACXIOM CORPORATION, Defendant.

          ORDER DENYING MOTION TO APPROVE FLSA SETTLEMENT

          Nina Y. Wang United States Magistrate Judge.

         This matter comes before the court on Plaintiff Christopher Teague's (“Plaintiff” or “Mr. Teague”) Unopposed Motion for Approval of FLSA Settlement Agreement and Dismissal With Prejudice (the “Motion”). [#7]. This civil action was referred to the undersigned Magistrate Judge to fully preside over for all purposes. See [#12]; 28 U.S.C. § 636(c); Fed.R.Civ.P. 73. Having reviewed the Motion, the applicable case law, and the entire docket, the court DENIES the Motion WITHOUT PREJUDICE.

         BACKGROUND

         Plaintiff initiated this action on July 9, 2018. [#1]. Mr. Teague asserts that Defendant Acxiom Corporation (“Defendant” or “Acxiom”) employed Plaintiff as an Enterprise Data Sales Executive. [Id. at ¶ 8]. His job responsibilities included “selling Defendant's products from his home-based office and servicing Defendant's existing clients.” [Id. at ¶ 9]. Plaintiff alleges that Defendant improperly classified him as exempt from the protections of the Fair Labor Standards Act (“FLSA”) despite not performing any duties that would warrant such a classification, and that in doing so denied him overtime compensation for hours worked in excess of 40 per week. See [id. at ¶¶ 10-15]. He therefore asserts claims under the FLSA and related Colorado Minimum Wage Order for unpaid overtime wages. See generally [#1].

         Acxiom filed an Answer to the Complaint on July 13, 2018. [#5]. Two days later, Plaintiff filed the instant Motion. [#7]. The Parties indicate that they have reached a resolution as to Plaintiff's claims, and now seek court approval of the Settlement Agreement concerning his FLSA claim. [Id.].

         ANALYSIS

         Within the context of a lawsuit brought directly by employees against their employer under section 216(b) to recover unpaid wages or overtime under the FLSA, and upon consideration of whether the proposed settlement is fair, the district court may enter a stipulated judgment approving the agreement and dismissing the action. Baker v. Vail Resorts Management Co., No. 13-cv-01649-PAB-CBS, 2014 WL 700096 (D. Colo. Feb. 24, 2014) (citing Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350, 1353 (11th Cir. 1982)). Approval is appropriate upon demonstration 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. Baker, 2014 WL 700096, at *1 (citing Lynn's Food Stores, 679 F.2d at 1354).

         Recently, as noted by the Parties, a court in this District has called into question whether court approval for an FLSA settlement requires court approval, absent any special circumstance. Ruiz v. Act Fast Delivery of Colorado, Civil No. 14-cv-00870-MSK-NYW, ECF 132, (D. Colo. Jan. 9, 2017) (unpublished).[1] Upon consideration of a motion to approve a settlement in an FLSA matter, the Ruiz court found that, with few exceptions, such settlements do not require court approval. Id. Because the issue is not yet settled by the United States Court of Appeals for the Tenth Circuit (“Tenth Circuit”), this court proceeds with applying the standard utilized by courts in this District to consider whether it can approve the settlement.

         I. Bona Fide Dispute

         For the court to discern whether a bona fide dispute exists, 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 employee; (3) the employer's reasons for disputing the employee's right to overtime; (4) the employee's 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. Baker, 2014 WL 700096, at *1.

         This court finds that the Parties adequately describe their dispute. As stated above, Plaintiff worked as Defendant's Enterprise Data Sale Executive from his home-office. [#1 at ¶¶ 8-9]. Plaintiff maintains that he did not travel regularly enough to qualify as an outside sales representative, or that he performed any exempt duties typical of executive, administrative, or professional employees, or that he performed work typical of a highly compensated employee. [#7 at ¶ 10]. Plaintiff further asserts that he regularly worked more than 40 hours per week without any overtime compensation. Defendant, however, denies that Plaintiff was an Enterprise Data Sales Executive or that Plaintiff's job duties were exactly as alleged, and generally denies that Plaintiff's entitlement to overtime compensation. See generally [#5]. Thus, I conclude that a bona fide dispute led to the settlement negotiation and resulting terms.

         II. Fair and Equitable Settlement Agreement

         “To be fair and reasonable, an FLSA settlement must provide adequate compensation to the employees and must not frustrate the FLSA policy rationales.” Baker, 2014 WL 700096, at *2. The “prime purpose” in enacting the FLSA “was to aid the unprotected, unorganized and lowest paid . . . employees who lack[ ] sufficient bargaining power to secure for themselves a minimum subsistence wage.” Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697, 707, n.18 (1945). See also Christopher v. SmithKline Beecham Corp., 132 S.Ct. 2156, 2162 (2012) (“Congress enacted the FLSA in 1938 with the goal of protect[ing] all covered workers from substandard wages and oppressive working hours.”) (citation omitted). “Normally, a settlement is approved where it is the result of contentious arm's-length negotiations, which were undertaken in good faith by counsel . . . and serious questions of law and fact exist such that the value of an immediate recovery outweighs the mere possibility of further relief . . . .” Felix v. Thai Basil at Thornton, Inc., No. 14-cv-02567-MSK-CBS, 2015 WL 2265177, at *2 (D. Colo. May. 6, 2015) (citation omitted).

         The Tenth Circuit considers the following factors in determining whether to approve a class action settlement under Fed.R.Civ.P. 23(e): (1) whether the parties fairly and honestly negotiated the settlement; (2) whether serious questions of law and fact exist which place the ultimate outcome of the litigation in doubt; (3) whether the value of an immediate recovery outweighs the mere possibility of future relief after protracted litigation; and (4) the judgment of the parties that the settlement is fair and reasonable. Rutter & Wilbanks Corp. v. Shell Oil Co.,314 F.3d 1180, 1188 (10th Cir. 2002). Courts in this District apply the same four factors to their review of a settlement agreement resolving FLSA claims in a collective and individual action. See Pliego v. Los Arcos Mexican Restaurants, Inc., 313 F.R.D. 117, 130 (D. Colo. 2016); Morton v. Transcend Service, Inc., No. 15-cv-01393-PAB-NYW, 2017 WL 977812, at *2 (D. Colo. Mar. 13, 2017). See also Albu v. Delta Mechanical Inc., No. 13-cv-03087-PAB-KMT, ...


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