United States District Court, D. Colorado
STUART SWANSON, and TRAVIS SAKOWSKI, on behalf of themselves and all similarly situated persons, Plaintiffs,
CATHEDRAL ENERGY SERVICES, INC. Defendant.
ORDER APPROVING SETTLEMENT AGREEMENT
D. Domenico United States District Judge
brought this action asserting violations of the Fair Labor
Standards Act (“FLSA”), 29 U.S.C. § 201,
et seq., and the wage laws of Colorado, North
Dakota, Wyoming, and Pennsylvania. The matter is before the
Court on the parties' joint motion for approval of their
settlement agreement, which resolves all claims. (Docs. 50,
50-1.) The Court APPROVES the settlement and
GRANTS the motion.
following background is drawn from the parties' joint
motion. Plaintiffs Stuart Swanson and Travis Sakowski worked
in the oilfields for Defendant Cathedral Energy Services,
Inc. as hourly supervisors and operators. On March 9, 2017,
they filed this putative class and collective action in state
court to recover unpaid overtime on behalf of themselves and
other similarly situated employees. Cathedral Energy then
removed the lawsuit here.
December 22, 2017, Plaintiffs moved to certify an FLSA
collective action and allow them to send notice of the
lawsuit to current and former employees of Defendant who
might have claims. The Court granted the motion, sixty-nine
former supervisors and operators joined the case, and the
parties commenced settlement negotiations. They exchanged
information regarding each of the class members in order to
evaluate the claims and estimate damages.
the rates of pay and length of employment for the class
members were unchallenged, the parties did dispute: (1) the
number of overtime hours worked; (2) the applicable statute
of limitations; and (3) the availability of FLSA liquidated
damages and/or state law penalties. Once all necessary
payroll data and other discovery information was exchanged,
the parties engaged in a day-long settlement conference and
ultimately reached the agreement memorialized in the
settlement agreement now before the Court.
agreement for the Court's approval provides that a claims
administrator will administer a settlement fund of $290, 000
to resolve the claims of the seventy-one class members.
(See Doc. 50-1, at 10-11 (listing members).) All
amounts to be paid by Cathedral Energy, including
attorney's fees and claims administration costs will come
out of the settlement fund. The individual settlement amounts
will be calculated based on the number of weeks each class
member worked for Cathedral Energy after March 22, 2014,
which the parties represent was the likely start date of the
statute of limitations. A $100 minimum payment will be paid
to class members with claims outside the limitations period.
Energy also agrees to pay Plaintiffs' counsel 36% of the
total fund as attorneys' fees and $17, 473.81 for
incurred costs, $17, 105.81 of which was spent locating and
notifying class members of the action. To reflect their
service to other class members in bringing this lawsuit, each
of the named Plaintiffs will receive $6, 000 as an additional
service award. Any amounts not approved for fees, costs or
service awards will be redistributed on a proportionate basis
among the class members. After fees, costs and service
awards, the parties anticipate that $151, 126.19 will be
distributed to the seventy-one class members-an average of
$2, 128.53 per member. The parties represent that fifteen of
the class members have time-barred claims and will receive
the minimum payment of $100.
employees file suit against their employer to recover back
wages under the FLSA, and present to the district court a
proposed settlement, the district court may enter a
stipulated judgment after scrutinizing the settlement for
fairness. 29 U.S.C. § 216; Lynn's Food Stores,
Inc. v. United States, 679 F.2d 1350, 1353 (11th Cir.
1982) (citing Schulte, Inc. v. Gangi, 328 U.S. 108
(1946)). “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.'” Baker v. Vail Resorts Mgmt.
Co., No. 13-CV-01649-PAB-CBS, 2014 WL 700096, at *1 (D.
Colo. Feb. 24, 2014) (quoting Brooklyn Sav. Bank v.
O'Neil, 324 U.S. 697, 706 (1945). To approve the
settlement agreement, the Court must find that (A) the
litigation involves a bona fide dispute, (B) the proposed
settlement is fair and equitable to all parties concerned,
and (C) the proposed settlement contains a reasonable award
of attorneys' fees. Lynn's Food Stores, 679
F.2d at 1354. Finally, the Court must determine (D)
“whether the settling plaintiff has used the class
action claim for unfair personal aggrandizement in the
settlement, with prejudice to absent putative class
members.” Whittington v. Taco Bell of Am.,
Inc., No. 10-CV-01884-KMT-MEH, 2013 WL 6022972, at *2
(D. Colo. Nov. 13, 2013) (quoting Shelton v. Pargo,
Inc., 582 F.2d 1298, 1314 (4th Cir. 1978)). The Court
addresses these requirements in turn.
Bona Fide Dispute
requesting approval of an FLSA settlement must provide the
Court with sufficient information to determine whether a bona
fide dispute exists. Davis v. Crilly, 292
F.Supp.3d 1167, 1172 (D. Colo. 2018) (citing Dees v.
Hydradry, Inc., 706 F.Supp.2d 1227, 1234 (M.D. Fla.
2010); Baker, 2014 WL 700096, at *1. 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. Id. (citing 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.
the parties have described the dispute, Cathedral
Energy's business, and that Plaintiffs were supervisors
and operators working in oilfields. The parties disputed
whether overtime exemptions applied; the exact number of
hours worked by each class member; whether liquidated damages
or state law penalties were at play; the proper measure of
damages; and the precise trigger date of the statute of
limitations. The parties further required a day of
negotiations to reach a resolution. The Court is satisfied
the agreement resolves a bona fide dispute.