Alleman v. LPS Services, LLC, 2:20-cv-04830

Representative Plaintiff Sasha Alleman sued LPS Services, LLC under the FLSA (and state law claims later dismissed), alleging unpaid overtime for unpaid pre-shift work; 34 opted-in plaintiffs and parties represent a final collective of 313 individuals.
Parties mediated and reached a revised settlement resolving the FLSA claims and moved for court approval of the settlement and fee allocation.
Court review governed by Lynn’s Food Stores principle that FLSA settlements require court supervision and must be "fair, reasonable, and adequate."
The parties represented the settlement payments approximate 100% of alleged unpaid overtime and 100% of alleged liquidated damages for individuals.
Representative Plaintiff will receive a $2,500 service award; plaintiffs’ counsel seeks $33,128.71 in attorney’s fees (~1/3 of the fund) and $3,777.11 in costs; parties will split administration fees 50/50.
The Court found arm’s-length negotiations, a bona fide dispute, and approved the settlement; it dismissed the case with prejudice and retained jurisdiction to enforce the settlement.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the FLSA settlement is fair, reasonable, and adequate	Settlement resolves bona fide wage claims, reached at arms-length, avoids costly litigation	Settlement resolves disputed exposure and is mutually reasonable	Approved: court found settlement fair, reasonable, adequate and reached at arms-length
Whether a bona fide dispute exists to permit court-supervised settlement under FLSA	Alleman alleges unpaid overtime and unpaid pre-shift work; dispute over proper pay	LPS disputes liability such that litigation would continue	Held: bona fide dispute exists supporting supervised settlement
Whether requested attorneys’ fees and costs are reasonable	Counsel requests $33,128.71 (~33% of fund) and $3,777.11 in costs as reasonable	Defendant agrees to the negotiated fee allocation	Held: fees and costs are reasonable; 33% is typical in district’s FLSA common-fund cases
Whether the representative service award is reasonable	$2,500 service award to Alleman compensates time/effort representing collective	Defendant agreed to the award as part of settlement	Held: $2,500 service award is reasonable and appropriate

Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350 (11th Cir. 1982) (FLSA claims may not be settled without Secretary of Labor or court supervision)
Int'l Union, United Auto, Aerospace, & Agric. Implement Workers of Am. v. Gen. Motors Corp., 497 F.3d 615 (6th Cir. 2007) (court must ensure class/collective settlements are fair, reasonable, and adequate)
Shane Grp., Inc. v. Blue Cross Blue Shield of Michigan, [citation="833 F. App'x 430"] (6th Cir. 2021) (percent-of-damages recoveries can be substantial and inform reasonableness analysis)
Hadix v. Johnson, 322 F.3d 895 (6th Cir. 2003) (service awards are an appropriate means to reward class representatives)