Gandy v. City of Bay Minette, Alabama
1:12-cv-00315
S.D. Ala.Mar 20, 2013Background
- Gandy sued the City of Bay Minette under the FLSA for unpaid overtime related to dog-care duties.
- City disputed entitlement to overtime and asserted a legitimate non-FLSA-based rationale for demotion/termination.
- The parties settled in a mediated conference: $32,500 total, allocated to unpaid overtime, retaliation, fees, and costs.
- Settlement included a strict, perpetual confidentiality clause and a broad release of claims.
- Judicial approval was sought to ensure the settlement was fair and consistent with FLSA policy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the FLSA settlement is fair and reasonable | Gandy received full overtime pay claimed; amount reflects the dispute. | Settlement reflects compromise over contested FLSA issues. | Yes; court found the settlement fair and reasonable under Lynn's Food. |
| Effect of confidentiality clause on public policy | Confidentiality harms public interest in wage transparency. | Confidentiality may be appropriate in some cases. | Confidentiality removed; settlement approved without the confidentiality provision. |
| Effect of the pervasive release on rights beyond FLSA | Release may swallow potential claims; must be understood. | Employee fully informed and voluntarily releases all claims. | Release found fair and knowingly entered; not unjust under Lynn's Food. |
| Reasonableness of attorney’s fees | Fees justified by complexity and duration of action. | Fees should reflect reasonable compensation. | Fees deemed reasonable; does not undermine overall fairness of settlement. |
| Judicial role in approving FLSA settlements | Court should scrutinize bona fides and fairness. | Parties meet standards for judicial approval. | Court approved the settlement after reviewing bona fides and fairness. |
Key Cases Cited
- Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350 (11th Cir. 1982) (FLSA settlements require court review for fairness; not all settlements are approved)
- Hogan v. Allstate Beverage Co., 821 F. Supp.2d 1274 (M.D. Ala. 2011) (FLSA settlements require scrutiny to ensure they meet statutory aims)
- Bonetti v. Embarq Management Co., 715 F. Supp.2d 1222 (M.D. Fla. 2009) (If terms are fully compensatory, court may skip detailed review)
- Stalnaker v. Novar Corp., 293 F. Supp.2d 1260 (M.D. Ala. 2003) (Confidentiality and releases in FLSA settlements require balancing openness and interests)