Brown v. Henley Propane, Inc.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF TENNESSEE

at WINCHESTER

TIMOTHY BROWN, individually, and on )

behalf of himself and other similarly situated )

current and former employees, ) No. 4:20-CV-7

)

Plaintiffs, ) Judge Collier

) Magistrate Judge Steger

v. )

)

HENLEY PROPANE, INC., EDWARD )

HENLEY, and BRETT HENLEY, )

)

Defendants. )

M E M O R A N D U M

Before the Court is the parties’ joint motion for approval of a settlement agreement in this

action. (Doc. 22.) The Court will GRANT the motion and APPROVE the proposed settlement

agreement. (Doc. 22-1 at 1–5 [“Settlement Agreement”].)

This case is brought under the Fair Labor Standards Act of 1938 (“FLSA”), 29 U.S.C.

§§ 201 et seq. Named Plaintiff Timothy Brown and opt-in Plaintiff Rick Harris allege they were

non-exempt employees of Defendants who worked in excess of forty hours per workweek and

Defendants failed to pay them a premium of at least one and one-half times their regular hourly

rate for this overtime as required by the FLSA. Defendants claim Plaintiffs were exempt under

the Motor Carrier Act and the FLSA and were therefore not entitled to overtime pay. Plaintiffs

have not filed a motion for certification of a collective action.

The proposed settlement agreement requires Defendants to pay a total of $16,500, with

$8,346 as wages to Timothy Brown, $3,786.50 as wages to Rick Harris, and $4,367.50 as

Plaintiffs’ attorney fees and costs. (Settlement Agreement ¶ 3.) In exchange for these payments,

Plaintiffs agree to dismiss the action with prejudice, dismiss all putative collective actions without

prejudice, release all of their claims against Defendants, with the exception of any claims that arise

after the execution of the Settlement Agreement or that may not be released as a matter of law.

(Id. ¶¶ 1, 2, 7.)

The Court has reviewed the Settlement Agreement and finds it is a fair, reasonable, and

adequate resolution of a bona fide dispute over FLSA provisions. See Bartlow v. Grand Crowne

Resorts of Pigeon Forge, No. 3:11-CV-400, 2012 WL 6707008 at *3 (E.D. Tenn. Dec. 26, 2012)

(concluding FLSA settlement agreement of collective action was fair, reasonable, and adequate

resolution of bona fide dispute). Factors relevant to finding a settlement fair, reasonable, and

adequate include: “(1) the risk of fraud or collusion; (2) the complexity, expense and likely

duration of the litigation; (3) the amount of discovery engaged in by the parties; (4) the likelihood

of success on the merits; (5) the opinions of class counsel and class representatives; (6) the reaction

of absent class members; and (7) the public interest.” Int’l Union, United Auto., Aerospace, &

Agric. Implement Workers of Am. v. Gen. Motors Corp., 497 F.3d 615, 631 (6th Cir. 2007). “The

Court may choose to consider only those factors that are relevant to the settlement at hand and may

weigh particular factors according to the demands of the case.” Redington v. Goodyear Tire &

Rubber Co., No. 5:07CV1999, 2008 WL 3981461, *11 (N.D. Ohio Aug. 22, 2008) (citing Granada

Invs., Inc. v. DWG Corp., 962 F.2d 1203, 1205–06 (6th Cir. 1992)).

The first and fifth factors—the risk of fraud or collusion and the opinion of class counsel—

both favor approving the settlement as fair and adequate. Plaintiffs were represented by counsel,

who are experienced in handling wage and hour collective actions, throughout the litigation. The

parties engaged in arms-length litigation and negotiations over significantly contested issues for

six months to achieve a settlement. The Court concludes there is a bona fide dispute and little risk

the settlement was the result of fraud or collusion. The Court also credits counsel’s view that the

proposed settlement is fair, adequate, and reasonable for Plaintiffs.

The Court turns next to the second and third factors—the complexity, expense, and likely

duration of the litigation, and the amount of discovery completed by the parties. The parties state

they have engaged in an “expansive fact investigation process” by: (i) collecting, obtaining, and

reviewing evidence; (ii) reviewing and assessing data and other information; and (iii) evaluating

their claims and defenses. (Doc. 22 at 7.) This is a collective action, and the Court sees some

complexity in the issues this Court and the jury would have to decide. The parties state if no

settlement had been reached, the Court would have had to address class certification,

decertification, and other dispositive motions. (Id. at 8.) The parties state they would also have

had to engage in expensive and extensive efforts to prepare pretrial submissions, and perhaps in

an expensive, lengthy trial, in addition to likely post-trial motions and appeals. (Id.) The Court

therefore sees a likelihood of some expense and time to resolve the matter, without a settlement.

The Court concludes the second and third factors weigh in favor of approving the settlement.

The fourth factor, the likelihood of success on the merits, is neutral. The parties state they

have opposing views on whether Plaintiffs were exempt, whether this action could proceed as a

collective action, how to calculate damages, and the length of the limitations period. (Id. at 5.)

The sixth factor, the reaction of absent class members, favors settlement. The parties agree

the putative class in this case was small. (Id. at 2.) The parties further state that the other potential

members of the class knew of the litigation and “expressed no interest in joining the lawsuit or

bringing similar claims.” (Id.)

As for the seventh factor, the Court views settlement as in the public interest here. “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[,] the district court

[may] approve the settlement . . . to promote the policy of encouraging settlement of litigation.”

Bartlow, 2012 WL 6707008 at *1 (2d alteration in original) (quoting Lynn's Food Stores v. U.S.,

679 F.2d 1350, 1354 (11th Cir. 1982). As already noted, the Court believes the proposed

settlement reflects a reasonable compromise over disputed issues of FLSA coverage. Accordingly,

the Court finds the proposed settlement is in the public interest.

Finally, the Court finds the terms regarding attorney’s fees in the Settlement Agreement to

be reasonable. The FLSA has a mandatory fee-shifting provision providing that the prevailing

party shall recover reasonable attorney’s fees and costs. 29 U.S.C. § 216(b). The FLSA fee award

“encourages the vindication of congressionally identified policies and rights,” and therefore should

be determined without “plac[ing] an undue emphasis on the amount of the plaintiff’s recovery.”

Fegley v. Higgins, 19 F.3d 1126, 1135 (6th Cir. 1994) (quotation omitted). Indeed, the Court of

Appeals for the Sixth Circuit has “upheld substantial awards of attorney’s fees even though a

plaintiff recovered only nominal damages.” Id. (quotation omitted). Here, attorney’s fees and

costs of $4,367.50 are not unreasonable. This is especially true considering the relative lack of

correlation between plaintiffs’ recoveries and attorney’s fees in FLSA cases. See Fegley, 19 F.3d

at 1135; but see Dean v. F.P. Allega Concrete Constr. Corp., 622 F. App’x 557 (6th Cir. 2015)

(reversing attorney’s fee award of $25,422 where plaintiff recovered $117).

The relevant factors either point in favor of approving the proposed settlement agreement

or are neutral. The Court also finds the proposed payment of attorney’s fees is reasonable.

Accordingly, upon consideration of the joint motion and the proposed settlement agreement, the

Court finds the proposed settlement agreement is fair, reasonable, and adequate. The Court will

GRANT the parties’ joint motion (Doc. 22) and APPROVE the proposed settlement agreement

(Doc. 22-1 at 1–5). This case will be DISMISSED WITH PREJUDICE, with each party bearing

its own attorney fees and costs, except as otherwise provided in the settlement agreement.

An appropriate Order will enter.

/s/___________________________

CURTIS L. COLLIER

UNITED STATES DISTRICT JUDGE