King v. MS Companies LLC
2:13-cv-02277
| N.D. Ala. | Jun 12, 2015Background
- Plaintiffs D’Antwone King, Debbie Norris, and Rolanda Norris worked as hourly production/inspection employees placed by MS Companies at AGC’s Alabama facilities and alleged unpaid straight-time and overtime for hours not recorded or paid.
- Plaintiffs allege pay was underreported due to a manager who stole employee hours and a later handheld timekeeping system that failed to capture hours; MS denied FLSA violations.
- Plaintiffs claimed they often worked overtime but were paid only 60–80 hours per two-week pay period; King also alleged retaliation (termination) for filing his FLSA claim.
- During settlement negotiations the parties exchanged payroll/personnel records and agreed a compromise payment exceeding the equivalent of 20 hours/week of overtime for each week worked, plus reasonable attorney’s fees, in exchange for dismissal with prejudice.
- The Court reviewed the settlement under Lynn’s Food scrutiny for bona fide disputes and attorney-fee fairness and provisionally allowed confidentiality/redaction of payment amounts given the limited, isolated nature of the dispute.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether parties may compromise FLSA unpaid-wage claims by settlement | Plaintiffs argued unpaid straight time and overtime existed due to inaccurate timekeeping and manager theft | MS denied failing to properly compensate employees and disputed amount owed | Court: Settlement permissible only if bona fide dispute exists; here a bona fide dispute existed and settlement approved |
| Whether proposed settlement amount is fair and reasonable | Plaintiffs asserted agreed formula (exceeding 20 hrs/week OT equiv.) fairly compensates disputed wages | MS agreed to the compromise amount to avoid further litigation | Court: The calculation method and amount are fair and reasonable under the circumstances |
| Whether attorney’s fees in settlement are reasonable and taint recovery | Plaintiffs’ counsel described time and fee calculation and asserted fees were reasonable and did not reduce plaintiff recovery | Defendant agreed to pay reasonable attorney’s fees as part of settlement | Court: Fee amount stated on record adequately compensates counsel and does not taint or compromise plaintiffs’ recovery |
| Whether confidentiality/redaction of settlement terms is permissible | Parties requested sealing/redaction due to isolated three-employee case and departure of implicated managers | Public interest in transparency of FLSA settlements normally disfavors sealing | Court: Conditionally allowed confidentiality and redaction of payment amounts given representations about limited scope and good cause |
Key Cases Cited
- Christopher v. SmithKline Beecham Corp., 132 S. Ct. 2156 (U.S. 2012) (discusses FLSA overtime principles)
- Barrentine v. Arkansas–Best Freight System, Inc., 450 U.S. 728 (U.S. 1981) (FLSA’s protection of employees’ wages and hours)
- Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697 (U.S. 1945) (public interest in fair wages and transparency)
- Lynn’s Food Stores, Inc. v. U.S. ex rel. U.S. Dep’t of Labor, 679 F.2d 1350 (11th Cir. 1982) (district court must scrutinize FLSA settlements for fairness; bona fide dispute requirement)
- Nall v. Mal–Motels, Inc., 723 F.3d 1304 (11th Cir. 2013) (reiterating Lynn’s Food standard)
- Dees v. Hydradry, Inc., 706 F. Supp. 2d 1227 (M.D. Fla. 2010) (parties must provide sufficient info to examine bona fides of dispute)
- Hogan v. Allstate Beverage Co., Inc., 821 F. Supp. 2d 1274 (M.D. Ala. 2011) (court must ensure uncontested wages are paid and that settlement is fair)
- Stalnaker v. Novar Corp., 293 F. Supp. 2d 1260 (M.D. Ala. 2003) (public interest weighs against sealing FLSA settlement terms)
- Briggins v. Elwood TRI, Inc., 3 F. Supp. 2d 1277 (N.D. Ala. 2014) (court must review reasonableness of attorney’s fees in FLSA settlements)