United States District Court, D. Colorado
ORDER DENYING MOTION TO APPROVE FLSA
Y. Wang United States Magistrate Judge.
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
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
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.
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).
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). 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.
Bona Fide Dispute
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.
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.
Fair and Equitable Settlement Agreement
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).
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.