# POPOVA v. INVESTMENTS 41 LLC

> District Court, S.D. Florida · January 20, 2023

URL: https://www.frixlaw.com/law-library/cases/10121455

## Case

- **Court:** District Court, S.D. Florida
- **Decided:** January 20, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

Case No. 22-cv-23260-DAMIAN

VIKTORIIA POPOVA and
DARA LAMDEN, on behalf of themselves
and all others similarly situated

Plaintiffs,

vs.

INVESTMENTS 41 LLC d/b/a/ BLACK
MARKET MIAMI and ERICK PASSO,
individually,

Defendants.
_________________________________________/

ORDER ON THE PARTIES’ JOINT MOTION FOR APPROVAL OF
SETTLEMENT AND DISMISSAL WITH PREJUDICE [ECF NO. 34]

THIS CAUSE is before the Court on Plaintiffs, Viktoriia Popova and Dara
Lamden’s (collectively, “Plaintiffs”), and Defendants, Investments 41 LLC d/b/a Black
Market Miami and Erick Passo’s (collectively, “Defendants”), Joint Motion to Approve
Settlement of FLSA Claims and Joint Stipulation for Dismissal with Prejudice, filed
January 16, 2023. [ECF No. 34 (“Motion”)]. This matter is before the undersigned pursuant
to the parties’ Consent to Proceed Before a Magistrate Judge, in which the parties jointly
and voluntarily elected to have the undersigned conduct all further proceedings in this case.
[ECF No. 30]. See 28 U.S.C. § 636(c)(1).
THIS COURT has considered the Motion, the proposed Settlement Agreements, the
pertinent portions of the record, and the relevant legal authorities. The Court also heard
from the parties, who appeared, through counsel, for a Zoom Fairness Hearing on January
17, 2023, and is otherwise fully advised in the premises. For the reasons set forth on the
record during the Fairness Hearing and below, the Court grants the Motion, approves the
Settlement Agreements, and retains jurisdiction for 30 days to enforce its terms.
I. FACTUAL AND PROCEDURAL BACKGROUND
On October 7, 2022, Plaintiff Viktoriia Popova initiated this action by filing a

complaint against Defendants. [ECF No. 1]. On December 16, 2022, Plaintiff Dara Lamden
opted into the lawsuit. [ECF No. 27]. Also on December 16th, Plaintiffs filed the Amended
Complaint, alleging, in part, violations of the Fair Labor Standards Act (“FLSA”), 29
U.S.C. § 201 et seq., for unpaid minimum wages. See ECF No. 25 (“Amended Complaint”).
According to the allegations in the Amended Complaint, Plaintiffs were servers and
bartenders at Black Market Miami, a restaurant owned and operated by Defendants. Id. at
¶¶ 3-5, 12.
On July 7, 2022, Ms. Popova filed her Statement of Claim. [ECF No. 10 (“Statement
of Claim”)].1 In the Statement of Claim, Ms. Popova estimates she is owed about

$10,014.80 in unpaid wages in addition to liquidated damages in the amount of $7,872,
plus attorneys’ fees and costs, for the 32 weeks she allegedly worked for Defendants. Id.
On December 21, 2022, the undersigned held a settlement conference with the
parties. [ECF No. 28]. Although the settlement conference ended in an impasse, shortly
thereafter, on December 29th, the parties consented to the jurisdiction of the undersigned
and then, on December 30th, filed a notice of settlement. [ECF Nos. 30, 32]. On January 16,
2023, the parties submitted the Motion now before the Court seeking approval of their
proposed Settlement Agreements, pursuant to Lynn’s Food Stores, Inc. v. United States, 679
F.2d 1350 (11th Cir. 1982), and dismissal of the action with prejudice. Mot. at ¶ 1.

1 Plaintiff Dara Lamden opted into the lawsuit after Ms. Popova filed her Statement of
Claim and did not submit a separate statement of claim before the parties settled.
In the Motion, the parties indicate that the settlement of Plaintiffs’ FLSA claims are
the result of a bona fide compromise between the parties and that the parties reached a
settlement in this matter to avoid the burden, expense, and uncertainty of continued
litigation. See Mot. at 3-4.

II. APPLICABLE LEGAL STANDARDS
Section 206 of the FLSA establishes the federally mandated minimum hourly wage,
and Section 207 prescribes overtime compensation of “one and one-half times the regular
rate” for each hour worked in excess of forty hours during a given workweek. 29 U.S.C. §§
206, 207. An employer who violates the FLSA is liable to its employee for any unpaid
minimum and/or overtime wages, as well as an equal amount in liquidated damages. 29
U.S.C. § 216(b). The provisions of the FLSA are mandatory and “cannot be abridged by
contract or otherwise waived” between employers and employees. Barrentine v. Arkansas-Best
Freight Sys., Inc., 450 U.S. 728, 740 (1981). Nevertheless, there are two ways in which claims

arising under the FLSA can be settled or compromised by employees: (1) if the payment of
unpaid minimum wage/overtime pay is supervised by the Secretary of Labor; or (2) in a
private lawsuit brought by an employee against his or her employer, if the parties present the
district court with a proposed settlement agreement and the district court enters a stipulated
judgment after scrutinizing the settlement for fairness. See 29 U.S.C. 216(c); Lynn’s, 679
F.2d at 1352–53.
The Eleventh Circuit has held that the compromise of FLSA claims is allowed under
the following circumstances:
Settlements may be permissible in the context of a suit brought by employees
under the FLSA for back wages because initiation of the action by the
employees provides some assurance of an adversarial context. The employees
are likely to be represented by an attorney who can protect their rights under
the statute. Thus, when the parties submit a settlement to the court for
approval, the settlement is more likely to reflect a reasonable compromise of
disputed issues than a mere waiver of statutory rights brought about by an
employer’s overreaching. If a settlement in an employee FLSA suit does
reflect a reasonable compromise over issues, such as FLSA coverage or
computation of back wages, that are actually in dispute; we allow the district
court to approve the settlement in order to promote the policy of encouraging
settlement of litigation.

Lynn’s, 679 F.2d at 1354. Thus, an employee may compromise a claim if the district court
determines that the compromise “is a fair and reasonable resolution of a bona fide dispute
over FLSA provisions.” Id. at 1355.
When evaluating an FLSA settlement agreement, the district court considers both
whether the settlement is fair and reasonable to the employee (i.e., “internal” factors), and
whether the settlement frustrates the purpose of the FLSA (i.e., “external” factors). Factors
considered “internal” include: (1) the existence of fraud or collusion behind the settlement;
(2) the complexity, expense, and likely duration of the litigation; (3) the stage of the
proceedings and the amount of discovery completed; (4) the probability of plaintiff’s success
on the merits; (5) the range of possible recovery; and (6) the opinions of the counsel. Leverso
v. SouthTrust Bank of Ala., Nat’l Ass’n, 18 F.3d 1527, 1530 n.6 (11th Cir. 1994); see also Dees v.
Hydradry, Inc., 706 F. Supp. 2d 1227, 1241–44 (M.D. Fla. 2010). There is a “‘strong
presumption’ in favor of finding a settlement fair.” Walker v. Kirkman Mgmt., LLC, No. 20-
1149, 2022 WL 1037369, at * 2 (M.D. Fla. Mar. 18, 2022) (quoting Cotton v. Hinton, 559
F.2d 1336, 1331 (5th Cir. 1977)). Additionally, the “FLSA requires judicial review of the
reasonableness of counsel’s legal fees to assure both that counsel is compensated adequately
and that no conflict of interest taints the amount the wronged employee recovers under a
settlement agreement.” Silva v. Miller, 307 F. App’x 349, 351 (11th Cir. 2009).
III. DISCUSSION
With the foregoing in mind, the Court has scrutinized the parties’ proposed
Settlement Agreements in camera for fairness. Defendants entered into separate settlement
agreements with each Plaintiff. A review of the Agreements reflects they are substantially

similar in all material and nonmaterial terms. Accordingly, the Court addressed both
Agreements at the Fairness Hearing and herein.
a. The Settlement Agreement
The parties submitted the terms of the Settlement Agreements to the Court for in
camera review due to confidentiality provisions in the Agreements. All parties are
represented by counsel and agree the negotiated terms of the Agreements are fair and
equitable considering the strengths and weaknesses of the parties’ respective positions. Mot.
at 5. The Court has scrutinized the terms of the Agreements, considered the above
referenced factors, and heard from the parties, through their counsel, at the Fairness

Hearing before the undersigned. As indicated above, the Court also presided over a
settlement conference with the parties and is, therefore, familiar with the parties’ claims, the
amounts at issue, and the strengths and weaknesses of the parties’ cases.
b. The Settlement Amount
As set forth on the record during the Fairness Hearing, the Court has reviewed all
terms of the Agreements, including the settlement amount, in camera. Based on the parties’
representations and their expressed concerns regarding the alleged FLSA claims, the Court
finds the settlement amount indicated in both Agreements represents a fair and reasonable
resolution of a bona fide dispute between the parties under all the circumstances presented

and that Plaintiffs have not unfairly compromised their FLSA claims. Having found the
settlement amount is fair and reasonable, the Court addressed the specific terms of the
Agreements with counsel.
c. Attorneys’ Fees
As part of the Settlement Agreements, Plaintiffs’ counsel will receive attorneys’ fees

and costs. In an FLSA action, the court “shall . . . allow a reasonable attorney’s fee to be
paid by the defendant, and costs of the action.” 29 U.S.C. § 216(b). In the Motion and at the
Fairness Hearing, the parties represented that the amount to be paid to Plaintiffs’ counsel
was negotiated separately from the amount paid to Plaintiffs for their FLSA claims, such
that Plaintiffs agreed the settlement amount was fair, separate and apart from consideration
of the fees and costs paid to their counsel. Mot. at 6.
Based on the parties’ representation that Plaintiffs’ attorney’s fees were agreed upon
separately and without regard to the amount paid to Plaintiffs, and finding the Settlement
Agreements are otherwise reasonable, the Court finds there is no reason to believe that
Plaintiffs’ recovery was adversely affected by the amount of fees paid to their attorneys.

Therefore, the Court may approve the Settlement Agreements without separately
considering the reasonableness of the fees to be paid to Plaintiffs’ counsel. See Bonetti v.
Embarq Mgmt. Co., 715 F. Supp. 2d 1222, 1228 (M.D. Fla. 2009).
In any event, the Court finds that the amount of fees to be paid to Plaintiffs’ counsel
is reasonable under the circumstances presented. The Court may rely on its own experience
in determining reasonableness of fees and does so here. See Norman v. Housing Auth. of
Montgomery, 836 F.2d 1292, 1303 (11th Cir. 1988) (“[The court] itself an expert on the
question [of reasonable hourly rates and hours expended] and may form an independent

judgment either with or without the aid of witnesses as to value”).
Accordingly, the Court finds the fees to be paid to Plaintiffs’ counsel pursuant to the
Settlement Agreements are reasonable and have not adversely affected the amounts paid to
Plaintiffs under the Agreements.
d. Confidentiality Provision And Other Terms
The Agreements contain confidentiality provisions in which Plaintiffs agree not to

disclose any information regarding the underlying facts regarding the Settlement
Agreements.
Confidentiality provisions in FLSA settlement agreements are often rejected by
district courts because courts consider them to “thwart Congress’s intent to ensure
widespread compliance with the FLSA.” Herrera, 2021 WL 1602120, at *2 (citing cases).
Moreover, “[j]udicial records are presumed to be public documents because ‘[o]nce a matter
is brought before a court for resolution, it is no longer solely the parties' case, but also the
public's case.’” Smith v. Target Corp., No. 21-80307-CIV, 2021 WL 5366876, at *1 (S.D. Fla.
Nov. 18, 2021) (quoting Brown v. Advantage Eng'g, Inc., 960 F.2d 1013, 1016 (11th Cir.

1992)). Therefore, a confidentiality provision in an FLSA settlement agreement “both
contravenes the legislative purpose of the FLSA and undermines the Department of Labor’s
regulatory effort to notify employees of their FLSA right.” Mingo v. Ironclad Projects, LLC,
No. 19-CIV-62202, 2021 WL 8894997 at *4 (S.D. Fla. Mar. 1, 2021) (quoting Dees v.
Hydradry, Inc., 706 F. Supp. 2d 1227, 1242 (M.D. Fla. 2010)).
The Settlement Agreements allocate a specific sum of the settlement amount as
consideration for the confidentiality provisions. At the Fairness Hearing, the Court heard
from counsel regarding the confidentiality of the Settlement Agreements. The parties agree
that the confidentiality provisions are fair and reasonable, and Plaintiffs’ counsel confirmed

that Plaintiffs fully understands the confidentiality requirements. Accordingly, under the
circumstances presented here, the Court finds that the confidentiality provisions do not
undermine the fairness of the Agreements.
In light of the Confidentiality provisions, the Court addressed the specific terms of
the Agreements with the parties on the record but will not discuss them here. Upon review

of the specific terms of the Agreements and after hearing from the parties, the Court finds
the terms of the Agreements are fair and reasonable under all the circumstances presented.
e. Non-Disparagement Provision
The Agreements contain non-disparagement provisions where Plaintiffs agree to
refrain from making false statements that are disparaging, demeaning, or defamatory about
the Releasees.
Courts that have analyzed the issue of non-disparagement clauses in FLSA
settlement agreements have also generally rejected them. Dees v. Hydrady, Inc., No. 8:09–cv–
1405–T–23TBM, 706 F. Supp. 2d 1227, 1242–43 (M.D. Fla. 2010); Stalnaker v. Novar Corp.,

293 F. Supp. 2d 1260 (M.D. Ala. 2003); Hanson v. Wells Fargo Bank, N.A., No. 08–80182–
Civ, 2009 WL 1490582 (S. D. Fla. May 26, 2009). However, a number of cases have
approved FLSA settlements in which the employee received additional consideration in
exchange for non-cash concessions that went beyond the release of the FLSA claims.
DeGraff v. SMA Behavioral Health Serv., Inc., 945 F. Supp. 2d 1324, 1329–30 (M.D. Fla.
2013); Caamal v. Shelter Mortgage Co., LLC, No. 6:13–cv–706–Orl–36KRS, 2013 WL
5421955, *4 (M.D. Fla. Sept. 26, 2013).
During the Fairness Hearing, the Court addressed these provisions with counsel,
both of whom agreed the provisions enabled the parties to reach swifter resolution. And

Plaintiffs’ counsel asserted that they fully understand the provisions and their implications.
Accordingly, the Court finds that the inclusion of the non-disparagement provisions does
not undermine the fairness of the Agreements under the circumstances presented.
f. Retention of Jurisdiction
Finally, the parties request the Court reserve jurisdiction for 30 days to enforce the

terms of the Agreements. “To retain jurisdiction to enforce a settlement agreement, the
court itself must act; agreement by the parties is not enough.” Anago Franchising, Inc. v. Shaz,
LLC, 677 F.3d 1272, 1279 (11th Cir. 2012). During the Fairness Hearing, the parties
clarified that the request for the Court to retain jurisdiction is based on the deadline for
payment of the settlement amount. Accordingly, the Court finds the request to reserve
jurisdiction to enforce the terms of the Agreements is reasonable.
IV. FINDINGS
The Court has considered the factors outlined in Lynn’s Food Stores; the factual
positions of the parties; the existence (or lack thereof) of documents supporting or

corroborating the parties’ positions; the strengths and weaknesses in the parties’ respective
positions; and the parties’ desires to resolve their disputes without protracted litigation.
As set forth on the record and above, the Court finds that the settlement represents a
genuine compromise of a bona fide dispute. Defendants, who deny liability, have agreed to
pay Plaintiffs more than they believe Plaintiffs are due under the law. The parties have
agreed to settle because of reasonable strategic and financial considerations. The Court finds
the Settlement Agreements promote the policy of encouraging settlement of litigation of
FLSA claims. Lynn’s, 679 F.2d at 1354.
The Court also finds that the settlement occurred in an adversarial context and that

there are genuine coverage and computation issues in dispute. The Court further finds that
the settlement reached by the parties represents a reasonable compromise by both sides and
is fair and reasonable and that the amount claimed as payment for Plaintiffs’ counsel’s fees
and costs is also reasonable.
V. CONCLUSION
Based on the foregoing, it is hereby
ORDERED AND ADJUDGED that the parties’ Joint Motion to Approve
Settlement of FLSA Claims and Joint Stipulation for Dismissal with Preyudice [ECF No.
34] is GRANTED, and the Settlement Agreements are APPROVED as fair and reasonable.
It is further
ORDERED AND ADJUDGED that the Clerk shall CLOSE this case and all
pending motions, if any, are DENIED AS MOOT. It is further
ORDERED AND ADJUDGED that the Court retains jurisdiction for 30 days to
enforce the terms of the Settlement Agreement.
DONE AND ORDERED in Chambers at Miami, Florida this 20" day of January
2023.
WY}
MELISSADAMIAN s—i‘—~™~™~S
UNITED STATES MAGISTRATE JUDGE

cc: Counsel of Record

10

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10121455. Public record. Not legal advice.