United States District Court, S.D. West Virginia, Huntington Division
SHERRIE L. FEDERER and KARAN NEAL, individually and on behalf of others similarly situated, Plaintiffs,
GENESIS ELDERCARE REHABILITATION SERVICES LLC d/b/a GENESIS REHAB SERVICES, Defendants.
MEMORANDUM OPINION AND ORDER
C. CHAMBERS UNITED STATES DISTRICT JUDGE
before the Court is the parties' Joint Motion for
Approval of Settlement and Dismissal. ECF No. 14. Upon review
of the proposed settlement and the Joint Memorandum by the
parties, the Court GRANTS the motion for the
January 6, 2017, Plaintiffs Sherrie L. Federer and Karan Neal
filed this action against Genesis Eldercare Rehabilitation
Services, LLC d/b/a Genesis Rehab Services. Both Plaintiffs
worked as Licensed Physical Therapist Assistants for
Defendant, and they claim Defendant failed to pay overtime
wages pursuant to the Fair Labor Standards Act (FLSA), 29
U.S.C. § 201 et seq. Plaintiff Federer asserts
she is owed three years of overtime wages in the amount of
approximately $36, 000. Plaintiff Neal claims she is owed
three years of overtime wages in the approximate amount of
$58, 000. Both Plaintiffs also seek interest and
attorneys' fees. Under the proposed settlement agreement,
Plaintiff Federer agrees to resolve her claim for $20,
047.00, and Plaintiff Neal agrees to settle for $52, 225.00.
Defendant also agrees to pay $6, 000 in attorneys' fees
to Plaintiffs' counsel.
the FLSA, a court must approve a settlement for fairness
before it can be executed by the parties. Patel v.
Barot, 15 F.Supp.3d 648, 653-54 (E.D. Va. 2014)
(citation omitted). Although the Fourth Circuit has not
determined what factors a court should consider in approving
a settlement under the FSLA, “district courts in this
circuit typically employ the considerations set forth by the
Eleventh Circuit in Lynn's Food Stores[,
Inc. v. United States, 679 F.2d 1350 (11th Cir.
1982)].” Kim v. Confidential Studio Inc., Civ.
Case No. PWG-15-410, 2017 WL 3592455, at *2 (D. Md. Aug. 21,
2017) (internal quotation marks and citations omitted);
accord Patel, 15 F.Supp.3d at 654 (applying factors
from Lynn's Food Stores). Under Lynn's
Food Stores, a court must decide whether a joint
settlement of a claim brought by an employee under the FLSA
“is a fair and reasonable resolution of a bona fide
dispute over FLSA provisions.” Lynn's Food
Stores, 679 F.2d at 1355.
first as to whether there is a bona fide dispute, the FLSA
provides that a covered employee must be paid overtime
“at a rate not less than one and one-half times the
regular rate at which he is employed” if he works
longer than forty hours in a week. 29 U.S.C. §
207(a)(1). If the FLSA is violated, an employer “shall
be liable to the employee or employees affected in the amount
of their . . . unpaid overtime compensation . . . and in an
additional equal amount as liquidated damages.” 29
U.S.C. § 216(b). A court is not required to award
liquidated damages, however, “if the employer shows to
the satisfaction of the court that the act or omission giving
rise to such action was in good faith and that he had
reasonable grounds for believing that his act or omission was
not a violation of the [FLSA].” 29 U.S.C. § 260. A
claim for unpaid compensation must be made within two years
of its accrual, unless there is a willful violation, which
extends the deadline to three years. 29 U.S.C. § 255(a).
The FLSA further provides that a prevailing employee may be
awarded reasonable attorney's fees and costs. 29 U.S.C.
§ 216(b). However, the FLSA exempts employees from
overtime who are working “in a bona fide executive,
administrative, or professional capacity” from overtime
pay. 29 U.S.C. § 213(a)(1).
looking at the pleadings and the settlement agreement in this
case, the Court finds the parties do not dispute that
Plaintiffs worked for Defendants, and Plaintiffs claim they
were not compensated for overtime pay that was owed to them
under the FLSA. Plaintiffs also argue Defendant's actions
were willful, which provides them with three years of
compensation rather than two. On the other hand, Defendant
insists that Plaintiffs are not entitled to overtime and, if
they are, the hours claimed are speculative and overstated
and subject to the two-year cap. Additionally, Defendant
argues Plaintiffs cannot demonstrate they are entitled to
liquidated damages. Given these facts and the parties'
positions, the Court has no difficulty finding a bona fide
dispute exists under the FLSA.
next to whether the settlement is fair and reasonable, the
Court evaluates it with respect to:
(1) the extent of discovery that has taken place; (2) the
stage of the proceedings, including the complexity, expense
and likely duration of the litigation; (3) the absence of
fraud or collusion in the settlement; (4) the experience of
counsel who have represented the plaintiffs; (5) the opinions
of [ ] counsel . . .; and (6) the probability of
plaintiffs' success on the merits and the amount of the
settlement in relation to the potential recovery.
Saman v. LBDP, Inc., Civ. Act. No. DKC 12-1083, 2013
WL 2949047, at *3 (D. Md. June 13, 2013) (internal quotation
marks and citations omitted; brackets and ellipsis in
case, Plaintiffs' counsel is experienced in handling wage
and hour law cases and employment litigation. The parties
agree that the claims were vigorously contested and would
have resulted in difficult and complex determinations of the
issues, with the potential that Plaintiffs' estimation of
their damages would be significantly reduced. In order to
avoid considerable litigation fees and expenses, the parties
were able to successfully negotiate a settlement following an
exchange of their Rule 26(a)(1) disclosures. The parties
voluntarily entered into this settlement, which they believe
is fair and reasonable, and there is no evidence that either
party engaged in fraud or collusion in reaching the
settlement. Upon review of these considerations and the terms
of the settlement, the Court agrees with the parties and
finds the parties agreed to a fair and reasonable settlement.
the Court turns to the issue of attorneys' fees. The
Defendant has agreed to pay $6, 000 in attorneys' fees
and costs. Plaintiffs' counsel charges an hourly rate of
$350.00, and asserts that the $6, 000 award is slightly less
than the sum of the actual amount of fees and costs due under
a “lodestar calculation.” Initially, the Court
finds $350.00 per hour reasonable in light of counsels'
experience in the area of wage and hour law. Although the
Court was not provided with the precise amount of
Plaintiffs' costs associated with this case, even if the
Court considers the entire amount of $6, 000 as
attorneys' fees, it equates to only about seventeen hours
spent on the entire case. Given that counsel drafted and
filed a Complaint involving both Plaintiffs, exchanged Rule
26(a)(1) disclosures, engaged in successful settlement
negotiations, reviewed the Settlement Agreement, and
participated in the current joint motion and memorandum of
law in support of approving the settlement and dismissing the
case, while necessarily spending time speaking with their
clients on these matters, the Court finds counsel easily
likely spent more than seventeen hours on this case, which
does not even encompass any reduction for Plaintiffs'
costs. The Court also recognizes that $6, 000 is only
approximately 12% of the $72, 272 combined amount being paid
to Plaintiffs. Therefore, in light of these facts, the Court
finds that $6, 000 in fees and costs is very reasonable.
for the foregoing reasons, the Court finds the proposed
settlement is a fair and reasonable compromise of bona fide
disputes under the FLS A, and GRANTS the
parties' Joint Motion for Approval of Settlement and
Dismissal. ECF No. 14.
Court DIRECTS the Clerk to send a copy of
this Order to counsel of record and ...