United States District Court, D. Kansas
ASHLEY FOSTER, individually and on behalf of other similarly situated persons, Plaintiff,
ROBERT BROGDEN'S OLATHE BUICK GMC, INC., Defendant.
MEMORANDUM AND ORDER
D. CRABTREE, UNITED STATES DISTRICT JUDGE
Ashley Foster, individually and on behalf of other similarly
situated persons, filed this lawsuit against defendant Robert
Brogden's Olathe Buick GMC, Inc. Plaintiff asserted three
claims-two class-based claims and one individual claim.
First, plaintiff asserted a Fair Labor Standards Act
(“FLSA”) collective action claim under 29 U.S.C.
§ 216(b). Second, plaintiff brought a class action claim
under Federal Rule of Civil Procedure 23 for violations of
the Kansas Wage Payment Act (“KWPA”), Kan. Stat.
Ann. §§ 44-312 to 44-327. Third, plaintiff asserted
an individual claim for retaliatory discharge under the FLSA.
The parties stipulated to dismissal without prejudice of
plaintiff's Rule 23 KWPA claim in a Joint Motion filed
February 5, 2018. Doc. 37 at 2. Also, the parties informed
the court that they have resolved plaintiff's individual
claim of retaliatory discharge. So, only the FLSA collective
action claim remains.
parties have agreed on a class-wide Settlement Agreement
(“Agreement”) designed to resolve the remaining
FLSA collective action claim. On July 31, 2018, the
court-after finding several deficiencies-denied the
parties' Joint Motion for Preliminary Approval of
Proposed Collective Action Settlement under 29 U.S.C. §
216(b) (Doc. 37) without prejudice. Doc. 43.
response, the parties have filed a Joint First Supplemental
Motion for Preliminary Approval of Proposed Collective Action
Settlement (Doc. 48). The parties request the court enter an
Order that (1) preliminarily approves the Agreement as fair
and reasonable; (2) certifies the FLSA collective action
class under the FLSA; (3) preliminarily approves Ms. Foster,
the named plaintiff, as the class representative, including
preliminary approval of an incentive award to her of $1, 200;
(4) establishes procedures and schedules deadlines for
persons to object to the Agreement; (5) schedules a fairness
hearing for a date approximately, but not sooner than, 15
days after the deadline for submitting claims expires. For
reasons explained below, the court grants the motion in part
and denies the rest.
is defendant's former accounting and human resources
employee. Plaintiff filed this lawsuit on her own behalf and
all similarly situated employees-i.e., “[a]ll
hourly employees subject to Defendant's automatic pay
deduction protocol that deducted 30 minutes of time from the
employees' daily pay record even when lunch breaks were
not taken for the period from March 1-December 31,
2016.” Doc. 37 at 2. Plaintiff alleges defendant
violated the FLSA by deducting 30 minutes from employees'
work time each day for a lunch break, regardless of whether
employees took a 30-minute break or, instead, worked through
November 2017, the parties engaged in mediation, and the
parties agreed in principle to settle the FLSA collective
action claim. Doc. 26. And, on January 29, 2018, the parties
executed their Agreement, memorializing the proposed
settlement of the collective action claim. Doc. 37-1.
the proposed Agreement, defendant would pay an all-inclusive,
non-reversionary payment of $12, 000. The payment creates a
common fund, and it would provide the settlement's
proceeds for all putative class members who choose to opt-in
to the deal. Thirty-five employees comprise the proposed
class; but, based on exhibits calculating payments to the
class, just 14 employees are entitled to payment. The
calculated amount due to the putative class is $3, 042.45.
Doc. 48-2 at 1. The common fund would pay all costs for class
notice, notice of settlement, calculation of settlement
payments, payments to the Settlement Administrator, and any
other costs for settlement administration. Doc. 48-4 at 5.
Agreement also provides a payment procedure. Once the court
approves the Agreement preliminarily, the parties will send
Notices to each putative collective action plaintiff,
allowing each member to opt-in to the Agreement within 21
days. To receive a payment, each opt-in plaintiff must sign a
release waiving all claims asserted by plaintiff's
Complaint. And, the Notice will explain the key terms of the
Agreement and provide opt-in plaintiffs an opportunity to
object to the Agreement. The parties then will move the court
to schedule a final fairness and approval hearing. If the
court approves the Agreement, the settlement administrator
will distribute payments.
February 5, 2018, the parties filed this Agreement with the
court and moved the court jointly, asking the court to
approve the Agreement preliminarily. Doc. 37 at 1. The court
conditionally certified the proposed class; approved the
form, content, and method of notice outlined in the
Agreement; and approved Roberta Ranes as settlement
administrator. Doc. 43 at 5, 14-15. But, the court otherwise
denied the parties' motion because they had shown neither
that a bona fide dispute existed nor that the settlement was
fair and equitable. Id. at 6, 9. The court also
declined to approve an attorneys' fee award or a service
payment award to plaintiff. Id. at 15.
September 14, 2018, the parties filed their Joint First
Supplemental Motion for Preliminary Approval of Proposed
Collective Action Settlement. Doc. 48. Having scrutinized the
Agreement in light of the court's July 31 Order, the
court preliminarily approves the settlement as fair and
reasonable. Because the court already certified the class
conditionally, it denies as moot the parties' request to
certify the FLSA collective action. The court preliminarily
designates Ms. Foster as class representative, but the court,
for reasons explained in this Order, preliminarily denies the
parties' proposed incentive payment to Ms. Foster. And,
the court authorizes the parties to submit a revised Notice
and Claim Form that (a) incorporates procedures for opt-in
plaintiffs to object to the Agreement, and (b) ensures
fairness to putative plaintiffs. Once the parties submit
these revisions, the court will schedule a fairness hearing.
the FLSA, employees may bring private actions against their
employers to recover damages for unpaid minimum wages or
overtime pay on their own behalf and for “other
employees similarly situated.” Genesis Healthcare
Corp. v. Symczyk, 569 U.S. 66, 75 (2013) (quoting 29
U.S.C. § 216(b)); Castaneda v. JBS USA, LLC,
819 F.3d 1237, 1245 (10th Cir. 2016) (quoting 29 U.S.C.
§ 216(b)). Generally, employees cannot waive FLSA
rights, so the parties must permit the court to review the
proposed settlement of those claims and determine whether the
settlement is fair and reasonable. See Barbosa v.
Nat'l Beef Packing Co., No. CIV.A. 12-2311-KHV, 2015
WL 4920292, at *3 (D. Kan. Aug. 18, 2015) (citing
Lynn's Food Stores, Inc. v. United States, 679
F.2d 1350, 1353 (11th Cir. 1982)). To approve a proposed
settlement, the court must find, first, that the case
involves a bona fide dispute and, second, that the proposed
settlement is fair and equitable to all parties concerned.
Peterson v. Mortg. Sources, Corp., No. CIV.A.
08-2660-KHV, 2011 WL 3793963, at *4 (D. Kan. Aug. 25, 2011)
(citing Lynn's Food Stores, 679 F.2d at 1353).
Where the parties reach a settlement before the court makes a
final collective action ruling, the court must make certain
final class certification findings before it can approve the
settlement. Id. at *5 (citations omitted).
the parties ask the court to approve their Agreement
preliminarily before any collective action plaintiffs have
received notice and the opportunity to opt-in to the lawsuit.
This is unusual. Generally, parties provide the putative
collective action plaintiffs with notice after the court
conditionally certifies the class. See, e.g.,
Symczyk, 569 U.S. at 75 (“The sole consequence
of [FLSA] conditional certification is the sending of
court-approved written notice to employees[.]”); 7B
Charles Alan Wright, Arthur R. Miller & Mary Kay Kane,
Federal Practice and Procedure § 1807 (3d ed.
2018) (“If conditional certification is granted, notice
is authorized.”). But, the court already has
conditionally certified a class. Doc. 43 at 6. Instead of
sending notice, the parties' current motion seeks
preliminary approval of their Agreement. And, the Agreement
itself includes a procedure to notify putative collective
action plaintiffs after the court approves the
court considered this issue in the context of final
approval of settlement agreements before putative class
members have opted-in. See Shepheard v. Aramark Unif.
& Career Apparel, LLC, No. 15-7823-DDC-GEB, 2016 WL
5817074 (D. Kan. Oct. 5, 2016). There- much like here-two
plaintiffs sought to represent an FLSA collective action of
employees, alleging, inter alia, that the defendant
employer “violated the FLSA by deducting 30 minutes
from their work time every day for a meal break regardless of
whether employees actually took a 30 minute meal break and
even though employees instead worked during the purported
meal breaks.” Shepheard, 2016 WL 5817074, at
*1. The two plaintiffs and the defendant sought final
approval of a settlement agreement, but the court had not yet
conditionally certified the class; the putative collective
action plaintiffs had not received notice; and, thus, the
putative plaintiffs had yet to receive an opportunity to
opt-in. Id. The court explained the problems with
this approach: “(1) approving the settlement for a
named plaintiff would moot the FLSA lawsuit, given the opt-in
nature of the collective action, and (2) a named plaintiff
has no authority to settle claims for plaintiffs who have not
opted in.” Id. (collecting cases); see
also Perez v. Avatar Props., Inc., No.
607-CV-792-ORL-28DAB, 2008 WL 4853642, at *4 (M.D. Fla. Nov.
6, 2008) (settling all claims “before the
representative plaintiff has any indication as to exactly
what [the] claims are and how many others he will actually
represent” puts “the proverbial cart before the
horse”). So, the court adopted the following procedure:
[T]he parties may file a motion seeking preliminary approval
of their collective action settlement. Such a motion should
ask the court to: (1) conditionally certify the proposed
settlement class; (2) preliminarily approve the proposed
settlement; and (3) approve a proposed notice to the putative
class members. If the parties submit these materials and the
court approves the parties' recommended procedure, it
will order the parties to send the approved notice to the
putative class members and establish a time period during
which putative class members may opt-in to the lawsuit. When
that period expires, the parties again may move for final
approval of the proposed settlement, the attorney's fee
award, and the service awards.
Shepheard, 2016 WL 5817074, at *3 (first citing
Copeland-Stewart v. New York Life Ins. Co., No.
8:15-CV-159-T-23AEP, 2016 WL 231237, at *4 (M.D. Fla. Jan.
19, 2016); then citing Cerrato v. All. Material Handling,
Inc., No. CIV. WDQ-13-2774, 2014 WL 1779823, at *2 (D.
Md. Apr. 30, 2014)).
piecemeal fashion, the court already has approved two of the
three requirements. The court conditionally certified the
proposed Settlement Class in its July 31 Order. Doc. 43 at 5.
And, the court approved a proposed notice to putative
collective action plaintiffs. Id. at 14. So, the court
now considers whether it should approve the Agreement
preliminarily as fair and reasonable. The court approves the
Agreement preliminary as fair and reasonable for reasons
explained, below. But it denies the parties' request to
approve other aspects of the parties' motion.
parties ask the court to enter an Order that does the
following: (1) preliminarily approves the Agreement as fair
and reasonable; (2) certifies the FLSA collective action
class under the FLSA; (3) preliminarily approves Ms. Foster,
the named plaintiff, as the class representative, including a
preliminary approval of an incentive award to her for $1,
200; (4) establishes procedures and schedules deadlines for
persons to object to the Agreement; and (5) schedules a
fairness hearing for a date approximately, but not sooner
than, 15 days after the deadline for submitting claims.
The Proposed Settlement
parties settle FLSA claims, they must present the settlement
to the court and it must decide whether the settlement is
fair and reasonable. Tommey v. Comput. Scis. Corp.,
No. 11-CV-02214-EFM, 2015 WL 1623025, at *1 (D. Kan. Apr. 13,
2015); see also Gambrell v. Weber Carpet, Inc., No.
10-2131-KHV, 2012 WL 5306273, at *2 (D. Kan. Oct. 29, 2012)
[“Gambrell II”] (explaining that
“[w]hen employees file suit against their employer to
recover back wages under the FLSA, the parties must present
any proposed settlement to the district court for review and
a determination whether the settlement is fair and
reasonable” (citing Lynn's Food Stores,
Inc., 679 F.2d at 1353)). To approve an FLSA settlement,
the court must determine whether (1) the litigation involves
a bona fide dispute, (2) the proposed settlement is fair and
equitable to all parties, and (3) the proposed settlement
contains an award of reasonable attorneys' fees.
Barbosa, 2015 WL 4920292, at *5 (citing
McCaffrey v. Mortg. Sources, Corp., No. CIV.A.
08-2660-KHV, 2011 WL 32436, at *2 (D. Kan. Jan. 5, 2011));
see also Hernandez v. Earth Care, Inc., No. CV
15-5091, 2016 WL 1461171, at *2 (E.D. Pa. Apr. 13, 2016)
(“The purpose of having a preliminary stage is to
ensure that there are no obvious deficiencies in the
settlement that would preclude final approval.”)
Bona Fide Dispute
establish a bona fide dispute, the parties should provide the
following: “(1) a description of the nature of the
dispute (for example, a disagreement over coverage, exemption
or computation of hours worked or rate of pay); (2) a
description of the employer's business and the type of
work performed by the employees; (3) the employer's
reasons for disputing the employees' right to a minimum
wage or overtime; (4) the employees' justification for
the disputed wages; and (5) if the parties dispute the
computation of wages owed, each party's estimate of the
number of hours worked and the applicable wage.”
McCaffrey, 2011 WL 32436, at *4.
A description of the ...