Eldridge v. Os Restaurant Services, LLC

Middle District of Florida, flmd-8:2017-cv-00798

Joint MOTION for Settlement Approval and Dismissal with Prejudice by Robert Eldridge.

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PageID 286 UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION ROBERT ELDRIDGE, Plaintiff, v. CASE NUMBER: 17-cv-00798-JSM-TGW OS RESTAURANT SERVICES, LLC d/b/a OUTBACK STEAKHOUSE, Defendant. ___________________________________/ JOINT MOTION FOR APPROVAL OF SETTLEMENT AND DISMISSAL WITH PREJUDICE AND INCORPORATED MEMORANDUM OF LAW Plaintiff, ROBERT ELDRIDGE ("Eldridge"), and Defendant OS RESTAURANT SERVICES, LLC ("OSRS") (Eldridge and OSRS collectively referred to herein as the "Parties"), by and through their undersigned counsel, hereby jointly file their Motion for Approval of Settlement and Dismissal with Prejudice (hereinafter "Joint Motion for Approval") and move the Court to approve the settlement between them. The Parties further request that the Court dismiss this matter with prejudice pursuant to Federal Rule of Civil Procedure 41(a)(ii). In support thereof, the Parties submit the following incorporated memorandum of law and state as follows: MEMORANDUM A. FACTUAL BACKGROUND AND PROCEDURAL HISTORY On or about March 2, 2017, Eldridge filed a Complaint against OSRS in the Circuit Court of the Sixth Judicial Circuit, in and for Pinellas County, Florida. [Dkt 1]. In his Complaint, Eldridge claimed that OSRS violated the Florida Minimum Wage Act PageID 287 ("FMWA"), Fla. Stat. §§ 448.110 et seq., the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201 et seq., and Art. X. § 24 of the Florida Constitution by allegedly failing to pay minimum and overtime wages. [Dkt. 2]. Eldridge's Complaint included allegations that OSRS required him to spend more than 20% of his time performing non-tipped work and/or employed him in a non-tipped occupation while receiving the tipped wage rate, worked him off the clock, and failed to pay him overtime. [Dkt. 2]. OSRS removed this action to this Court on or about April 6, 2017. [Dkt 1]. Subsequently thereafter, OSRS moved to dismiss Eldridge's Complaint on the grounds that he failed to state a claim for which relief could be granted. [Dkt. 6]. More specifically, OSRS asserted that Eldridge could not show that either the FMWA, Florida Constitution or the FLSA prohibit the use of a subminimum wage to compensate a tipped employee if the employee's allegedly "non-tipped" duties exceeded 20% of his workday. [Id.]. OSRS targeted Eldridge's reliance on an isolated provision in the Department of Labor ("DOL") Enforcement Handbook, which was neither subjected to notice-and-comment rulemaking nor found in the DOL's own regulations. [Id.]. The Court denied OSRS's motion to dismiss, rejecting OSRS's position based on the Eight Circuit's opinion in Fast v. Applebee's Int'l., Inc., 638 F.3d 872, 877, 880 (8th Cir. 2011). [Dkt. 11]. OSRS answered Eldridge's Complaint on June 1, 2017. [Dkt. 12]. In its Answer and Defenses, OSRS denied Eldridge's claims in their entirety and maintained its position that the so-called "20% rule" could not be a basis of liability here. [Id.]. Additionally, OSRS raised several defenses to Eldridge's claims that he worked in a dual occupation, that he had properly complied with the FMWA's pre-suit demand requirement, that he had not been 2 PageID 288 properly paid for all hours worked, that OSRS acted willfully and not in good faith, and that Eldridge used the complaint mechanism available to him to eradicate any purported wage violations. [Id.]. Prior to OSRS answering the Complaint, the Court entered a Scheduling Order, which required, among other things, that Eldridge answer certain Court-initiated interrogatories, that OSRS disclose certain records and wage/hour information, and that the parties meet and confer to discuss settlement. [Dkt. 7]. The Parties complied with each of those requirements on June 16, 2017, June 30, 2017, and July 27, 2017, respectively. [Dkt. 13, 14, 15]. Although the Parties were unable to resolve the matter at their in-person meeting on July 27, 2017, the Parties continued their negotiation efforts until they settled the case on or about October 17, 2017. [Dkt. 19]. A copy of the Settlement Agreement and General Release (hereinafter "Settlement") memorializing the Parties' settlement is attached hereto as Exhibit A. Pursuant to the Court's Orders dated October 18, 2017 [Dkt. 20] and November 20, 2017 [Dkt.22], the Parties now jointly file the instant motion seeking approval of the Settlement. B. ARGUMENT The Court should approve the Settlement. The Settlement reflects a fair compromise between the Parties over heavily contested legal and factual issues. Indeed, as reflected above, OSRS has maintained and continues to maintain that Eldridge's claims with respect to the 20% rule lack legal viability. Further, OSRS has denied the underlying facts supporting each and every one of Eldridge's claims and has raised several defenses in attempt to negate or otherwise limit any recovery Eldridge would ultimately receive even if he were to prevail on his claims. Finally, as described in more detail below, the settlement is fair and 3 PageID 289 reasonable in that it contains no provisions that offend notions of fairness and the amounts to be paid to Eldridge's counsel were negotiated separate and apart from those agreed to resolve Eldridge's substantive claims. Based on the foregoing, the Parties' Joint Motion for Approval should be granted. 1. The Parties' Settlement is Fair and Reasonable. It is well-established that in order to approve a settlement in this context, the Court must examine the settlement to determine whether it is a "fair and reasonable resolution of a bona dispute" of the claims raised. Lynn's Food Store, Inc. v. United States, 679 F.2d 1350, 1355 (11th Cir. 1982). However, even with that review, approval of a settlement is warranted unless a proposed settlement is obviously deficient. See Su v. Electronic Arts, Inc., No. 6:05-cv-131-Orl-28JGG, 2006 WL 4792780, *2 (M.D. Fla. Aug. 29, 2006). Indeed, there is a strong presumption in favor of granting approval where the facts demonstrate that the settlement is a fair and reasonable compromise of a bona fide dispute regarding material issues in the litigation. Id. at *2-3. Evidence that the Settlement is a fair and reasonable compromise can be readily found here. In discussing the approval of settlements such as the one presented here, the Eleventh Circuit has noted that: 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 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 4 PageID 290 encouraging settlement of litigation. Id. at 1354. In considering the Settlement, the Court should be aware that a "settlement is a compromise, a yielding of the highest hopes in exchange for certainty and resolution" and should not unnecessarily disturb the strong presumption in favor of settlement in the FLSA context. See Electronic Arts, Inc., No. 6:05-cv-131-Orl-28JGG, 2006 WL 4792780, at *3. An FLSA settlement may be approved as fair even where plaintiffs receive in settlement substantially less than the amount they originally claimed. See Rutland v. Visiting Nurse Assoc. of Central Fla., Inc., No. 6:07-cv-1130-Orl-19-19DAB, 2008 WL 3833254, *2 (M.D. Fla. Aug. 13, 2008). Information revealed during discovery—including the review of the information the Court ordered the Parties to exchange—as well as the risks associated with litigation and the viability of certain defenses, all may cause a plaintiff like Eldridge to settle for less than the original amount claimed. See id. (approving FLSA settlement where plaintiffs settled for substantially less than the wages amount initially claimed in their interrogatories). Here, under the terms of the Parties' Settlement, Eldridge will receive $1,200.00 in compromise for all of his disputed claims for unpaid wages and $1,200.00 in compromise for his disputed claims for liquidated damages. While it is true that Eldridge claimed that he was owed $9,511.02 in his Response to Court's Interrogatories to Plaintiff, he acknowledged that he arrived at that calculation by using only an estimation of his dates of employment and hours worked. [Dkt. 13]. The amounts were not based on actual payroll and other records 5 PageID 291 from OSRS that showed the actual time worked and pay received for those hours worked.1 [Id.]. And, with respect to Eldridge's 20%/dual occupation claims calculation, Eldridge further acknowledged that he arrived at the estimated amount he was seeking by applying a formulaic approach by which he simply sought the difference between the tipped wage rate he received and the applicable minimum wage for each hour he estimated he worked during the entirety of his employment with OSRS. Eldridge's 20%/dual occupation estimate made up the most substantial part of his estimated damages (2960 hours of a total 3,330 hours claimed or $6,257.44 of the $9,511.02 purported unpaid wages owed), which is the most contested aspect of his claim. The settlement amount agreed to between the Parties reflects a reasonable compromise of a bona dispute between the Parties as evidenced, in part, by the briefings filed by the Parties at the motion to dismiss phase. It also reflects a compromise on the Parties' differing views on potential evidentiary hurdles OSRS believes Eldridge cannot clear in establishing the duties performed on each shift, the amount of time spent performing those duties, the dates/hours he allegedly worked off the clock, and the dates/hours he purportedly was not paid overtime. Both counsel for Eldridge and counsel for OSRS have both litigated a fair number of these cases and are experienced in assessing the uncertainty that exists in Eldridge proving his claims, the likely expense and length of litigating this case through trial/appeal, and weighing the relative strengths and weaknesses of the claims and defenses asserted. Considering all of the foregoing, the Settlement should be deemed fair. The Settlement should also be found fair because it does not include provisions such 1 The Parties note that these records had in fact been previously provided to Eldridge despite his representation otherwise in his Response to Court Interrogatories to Plaintiff. [See Dkt. 13]. 6 PageID 292 as a non-disparagement clause, confidentiality and other provisions that, at times and under certain circumstances, have been deemed inappropriate in FLSA compromises. See Clarke v. Alta Resources Corp., No. 2:17-cv-276-FtM-99CM, 2017 WL 4958771, * (M.D. Fla. Oct. 30, 2017)(discussing cases). And to the extent that the Settlement includes a general release, it still should be found fair because Eldridge received compensation that is separate and apart from the benefits to which he is entitled under the FLSA, FMWA and/or the Florida Constitution. See Alta Resources Corp., No. 2:17-cv-276-FtM-99CM, 2017 WL 4958771, *3 (M.D. Fla. Oct. 30, 2017) (collecting cases approving settlement agreements containing general releases were the employer confers some benefit on the plaintiff in exchange for the release); see also Middleton v. Sonic Brands L.L.C., Case No. 6:13-cv-386-Orl-28KRS, 2013 WL 4854767, at *3 (M.D. Fla. Sept. 10, 2013) (approving a settlement agreement providing $100 as separate consideration for a general release). Here, prior to agreeing upon the release language and amount to be paid as consideration of the release, counsel for the Parties discussed the value of the release to both Parties and looked at that matter separate from valuing the compromise on Eldridge's wage claims. Alta Resources Corp., No. 2:17-cv-276- FtM-99CM, 2017 WL 4958771, *3 (M.D. Fla. Oct. 30, 2017). Thus, the general release does not render the Settlement unfair or unreasonable. Id. The same is true of the waiver of future employment clause. Id. at 4. As such, the Settlement should be approved. 2. The Settlement was not Tainted by the Compromise of Plaintiff's Claim for Attorneys' Fees and Costs. The Settlement should also be approved because the amount agreed to between the Parties as a compromise for Eldridge's disputed claim for attorneys' fees and costs was agreed upon separately and without regarding to the amounts to be paid to Eldridge for his 7 PageID 293 underlying claims. See Bonnetti v. Embarq Management Company, 715 F. Supp.2d 1222, 1228. Further, it reflects a reasonable compromise over disputed issues regarding Eldridge's entitlement to the full amount sought for attorneys' fees and costs. Under the terms of the Settlement, Eldridge's counsel will receive $2,722.65, which reflects payment of actual costs spent in the litigation totaling $739.57 plus payment for approximately eight hours of work (a reduction of approximately twenty-three and a half hours of work using the lodestar method). CONCLUSION Because the Settlement is reasonable and fair in all respects, the Parties jointly and respectfully request that the Court grant this motion and enter an order approving the settlement and dismissing this action with prejudice. Respectfully submitted this 15th day of December, 2017. /s/Kevin E. Vorhis /s/LaKisha M. Kinsey-Sallis Kevin E. Vorhis, Esq. Kevin D. Johnson Florida Bar No. 0118482 Florida Bar No. 0013749 kvorhis@itsaboutjustice.law LaKisha M. Kinsey-Sallis tiina@itsaboutjustice.law Florida Bar No. 78265 Cohen Law Group Johnson Jackson, LLC 350 North Lake Destiny Road 100 North Tampa Street Suite 300 Suite 2310 Maitland, FL 32751 Tampa, FL 33602 Telephone: (407) 478-4878 Telephone: (813) 580-8400 Facsimile: (407) 478-0204 Facsimile: (813) 580-8407 Attorneys for Plaintiff Email: kjohnson@johnsonjackson.com lkinseysallis@johnsonjackson.com Attorneys for Defendant CERTIFICATE OF SERVICE 8 PageID 294 I HEREBY CERTIFY that a true and correct copy of the foregoing was furnished to counsel of record via the Court's CM/ECF system this 15th day of December, 2017. /s/Kevin Vorhis Kevin Vorhis, Esquire Florida Bar No. 0118482 kvorhis@itsaboutjustice.law COHEN LAW GROUP 350 North Lake Destiny Road Maitland, Florida 32751 Phone: (407) 478-4878 Fax: (407) 478-0204 9