Kries v. San Diego, City of ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 DAVID K. KRIES, and GARY Case No.: 17-cv-1464-GPC-BGS MONDESIR, on behalf of themselves and 12 all other employees similarly situated, ORDER GRANTING MOTION FOR 13 APPROVAL OF SETTLEMENT Plaintiffs, 14 v. [ECF NO. 571] 15 CITY OF SAN DIEGO; and DOES 1 16 through 10, inclusive, 17 Defendants. 18 19 Case No. 17-cv-2014-GPC-BGS 20 CANDACE MITCHELL, et al., on behalf (Consolidated with 17-cv-1464-GPC- 21 of themselves and all other employees 22 similarly situated, BGS) 23 Plaintiffs, 24 v. 25 26 CITY OF SAN DIEGO, Defendant. 27 1 ______________________________ 2 3 ALBERTO ARELLANO, MAICO Case No. 18-cv-0229-GPC-BGS ALEJO, and GARY OLLISON, on behalf 4 (Consolidated with 17-cv-2014-GPC- of themselves and all other employees 5 similarly situated, BGS) 6 Plaintiffs, 7 vs. 8 9 CITY OF SAN DIEGO, 10 Defendant. 11 12 Before the Court is the Joint Motion to Approve the Settlement Agreement 13 between Plaintiffs in the above-captioned consolidated cases, Kries, et al. v. City of San 14 Diego (“Kries”), Mitchell, et al. v. City of San Diego (“Mitchell”), and Arellano, et al. v 15 City of San Diego (“Arellano”) (collectively, “the Actions”) and Defendant City of San 16 Diego (“Defendant” or “City”) (collectively “the Parties”). ECF No. 571. Based on the 17 papers and pleadings submitted in support of Plaintiffs' motion, and the remaining papers, 18 pleadings and Orders in this action, and for good cause shown, the Court GRANTS the 19 Joint Motion to Approve the Settlement Agreement in all respects. 20 I. BACKGROUND 21 This case involves a wage-and-hour class action, wherein Plaintiffs are non-exempt 22 City employees who argue that they are entitled to overtime compensation under the Fair 23 Labor Standards Act (“FLSA”), 29 U.S.C. § 201, et seq. and seek unpaid overtime 24 compensation, declaratory relief, liquidated damages, interest, and attorneys’ fees and 25 costs on the basis of the Ninth Circuit decision Flores v. City of San Gabriel, 824 F.3d 26 890, 895 (9th Cir. 2016). Flores held that employees who did not spend the whole of 27 1 their allocated flex benefit plan dollars received the unused portions as cash, sometimes 2 referred to as “cash-in-lieu” (“CIL”) payments, and that the employee’s CIL payments 3 must be included in the calculation of the regular rate of pay for overtime payments under 4 FLSA. Flores, 824 F.3d at 901-902. Flores additionally held that the total value of flex 5 benefit dollars provided by the flexible benefits plan (“FBP”) became eligible for 6 inclusion in the regular rate of pay when calculating overtime payments under FLSA. Id. 7 at 903. 8 Here, Plaintiffs allege that the City underpaid overtime wages by excluding from 9 the regular rate of pay: (1) CIL payouts under the City’s FBP (“CIL claim”), and (2) the 10 full value of the Plaintiffs’ FBP flex dollars or credits (“Total FBP claim”). Plaintiffs 11 also allege that the City violated FLSA by: (1) failing to “cash out” compensatory time 12 off accrued under FLSA using a regular rate of pay that included CIL and Full FBP 13 Credits, and (2) the City used a divisor and multiplier methodology which underpaid 14 FLSA overtime by failing to allocate FBP Credits to the regular rate earned during a 15 standard 40-hour, non-overtime workweek. 16 The Kries action was filed on July 19, 2017, the Mitchell action was filed on 17 September 29, 2017, and the Arellano action was filed on January 31, 2018. The Kries 18 plaintiffs filed their action on behalf of themselves and similarly situated former and 19 current police officers employed by the City. ECF No. 571 at 7. The Mitchell plaintiffs 20 filed their action on behalf of themselves and all similarly situated former and current 21 full-time City employees. Id. The Arellano plaintiffs filed their action on behalf of 22 themselves and similarly situated former and current City employees holding 23 maintenance, labor, skilled trades and equipment operator positions. Id. 24 In Kries, the Court denied the Defendants’ motion to dismiss the First Amended 25 Complaint (ECF No. 69) on July 18, 2018. ECF No. 143. On October 23, 2018, the 26 27 1 Kries plaintiffs filed the operative Second Amended Complaint. ECF No. 161. On July 2 10, 2019, the Court consolidated the Actions. ECF No. 547. 3 The Parties agree that a total of 2,537 Plaintiffs filed timely consents to join the 4 Actions: 1,153 joined the Mitchell case; 897 joined the Arellano case; and 487 joined the 5 Kries case. Id. at 8.1 6 The Parties now move for the Court to approve the Settlement Agreement, which 7 provides that the City will pay a total amount of no more than $6,199,997.98, and that 8 this amount shall include all of Plaintiffs’ damages to settle all of Plaintiffs’ FBP-related 9 FLSA claims raised in the Action. ECF No. 571-2 at 6. The Parties agree that half of 10 this total amount represents the agreed-upon overtime backpay arising from Plaintiffs’ 11 claims, and the other half represents the total amount of liquidated damages arising from 12 Plaintiffs’ claims. Id. 13 II. LEGAL STANDARD 14 FLSA was enacted to protect covered workers from substandard wages and 15 oppressive working hours. See Barrentine v. Arkansas–Best Freight System, Inc., 450 16 U.S. 728, 739 (1981); 29 U.S.C. § 202(a) (characterizing substandard wages as a labor 17 condition that undermines “the maintenance of the minimum standard of living necessary 18 for health, efficiency, and general well-being of workers”). “FLSA places strict limits on 19 an employee's ability to waive claims for unpaid wages or overtime . . . for fear that 20 employers may coerce employees into settlement and waiver.” Lopez v. Nights of 21 Cabiria, LLC, 96 F.Supp.3d 170, 175 (S.D.N.Y.2015) (internal quotation marks and 22 23 1 Parties’ counsel learned in April 2020 that 35 additional putative plaintiffs employed in lifeguard job 24 classifications were inadvertently omitted from the City’s master final mailing list of individuals who were to receive notice of eligibility to join the Mitchell case due to a formatting error in the spreadsheet 25 listing their names. Adema Decl. ¶ 9. The Parties agreed to resolve this omission by granting the 35 26 omitted lifeguards a new opportunity to consent to join the Mitchell action and to receive damages on the same terms described in the Settlement Agreement, using a retroactive opt-in date for their claims. 27 Id. ¶ 10. 1 citation omitted). Accordingly, claims for unpaid wages under FLSA may only be 2 waived or otherwise settled if settlement is supervised by the Secretary of Labor or 3 approved by a district court. See Lynn's Food Stores, Inc. v. United States ex rel. U.S. 4 Dept. of Labor, Emp't Standards Admin., Wage & Hour Div., 679 F.2d 1350, 1352–53 5 (11th Cir.1982); Meza v. 317 Amsterdam Corp., 14–CV–9007 (VSB), 2015 WL 6 9161791, *1 (S.D.N.Y. Dec. 14, 2015) (“Parties may not privately settle FLSA claims 7 with prejudice absent the approval of the district court or the Department of Labor.”) 8 (citation omitted). 9 In reviewing a FLSA settlement, a district court must determine whether the 10 settlement represents a “fair and reasonable resolution of a bona fide dispute.” Lynn's 11 Food Stores, 679 F.2d at 1355. A bona fide dispute exists when there are legitimate 12 questions about “the existence and extent of Defendant's FLSA liability.” Ambrosino v. 13 Home Depot. U.S.A., Inc., 2014 WL 1671489 (S.D. Cal. Apr. 28, 2014). There must be 14 “some doubt . . . that the plaintiffs would succeed on the merits through litigation of their 15 [FLSA] claims.” Selk v. Pioneers Mem'l Healthcare Dist., 159 F. Supp. 3d 1164, 1172 16 (S.D. Cal. 2016). 17 After a district court is satisfied that a bona fide dispute exists, it must then 18 determine whether the settlement is fair and reasonable. Id. To determine this, courts in 19 this circuit look to the totality of the circumstances, balancing such factors as: “(l) the 20 plaintiff's range of possible recovery; (2) the stage of proceedings and amount of 21 discovery completed; (3) the seriousness of the litigation risks faced by the parties; (4) 22 the scope of any release provision in the settlement agreement; (5) the experience and 23 views of counsel and the opinion of participating plaintiffs; and (6) the possibility of 24 fraud or collusion.” Id. at 1173 (S.D. Cal. 2016) (collecting cases). A court will not 25 approve a settlement of an action in which parties attempt to settle for less than the 26 FLSA-guaranteed amount because it would shield employers from the full cost of 27 1 complying with the statute. Id. at 1172. The Court addresses each of these factors in 2 turn. 3 III. DISCUSSION 4 A. Bona Fide Dispute 5 The Court finds that this case reflects a bona fide dispute between the parties over 6 potential liability under the FLSA. Although Flores established that the City owe some 7 amount of retroactive underpaid overtime to the Plaintiffs, the amount of such payment 8 owed is subject to reasonable dispute. Specifically, the Parties point to five disputes: (1) 9 whether the City is liable on the Total FBP claim for each of the fiscal years covered by 10 the statute of limitations or for one or all of the three fiscal years included in the 11 Settlement Agreement (ECF No. 571 at 19); (2) the extent to which Flores applies to the 12 amount of CTO that Plaintiffs accrued and cashed out (ECF No. 571 at 20); (3) whether 13 the City can establish “subjective and objective good faith” in order to avoid paying 14 liquidated damages by showing that had no knowledge of any potential FLSA violation 15 prior to the Flores decision (ECF No 571 at 20); (4) whether applicable statute of 16 limitations is the baseline two-year statute of limitations under FLSA, or an extended 17 three-year statute of limitations on the basis that the FLSA violation was “willful” (ECF 18 No. 571 at 22); and (5) what methodology should be applied to calculate the amount of 19 any underpayment. ECF No. 571 at 23-24. The parties describe the dispute over 20 methodology to be the “largest settlement variable.” Id. at 17. 21 These disputes raise legitimate question over whether and the extent to which the 22 City is liable under FLSA. The Parties have both shown legitimate arguments deserving 23 consideration and in light of these competing views, the Court finds that there is a bona 24 fide dispute between the Parties. 25 / / / 26 / / / 27 1 B. Fair and Reasonable 2 Parties contend that the proposed Settlement Agreement is a fair and reasonable 3 resolution of the parties’ disputes and in furtherance of the purposes of the FLSA. After 4 considering the six factors outlined above, the Court finds that the Settlement Agreement 5 is fair and reasonable under FLSA. 6 1. Plaintiff’s Range of Possible Recovery 7 In comparing the amount proposed in the settlement with the amount that plaintiffs 8 could have obtained at trial, the court must be satisfied that the amount left on the 9 settlement table is fair and reasonable under the circumstances presented. Selk, 159 F. 10 Supp. 3d at 1174. The Court must consider whether the range of potential recovery 11 bears some reasonable relationship to the true settlement value of the claims. Id. “[A] 12 proposed settlement may be acceptable even though it amounts to only a fraction of the 13 potential recovery that might be available to the class members at trial.” Nat'l Rural 14 Telecommunications Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 527 (C.D. Cal. 2004). 15 Here, the range of Plaintiffs’ potential recovery varies widely depending on how 16 the bona fide disputes between the Parties are resolved. ECF No. 571 at 28. Each 17 Plaintiff’s actual damages were calculated by the City’s retained forensic expert and the 18 Parties agree that these calculations were done accurately. Id. at 27-28. However, 19 depending on whether the bona fide disputes are resolved in Plaintiffs’ or Defendant’s 20 favor, Plaintiffs’ total recovery can range widely. 21 If Plaintiffs prevail on their position that the City is liable for backpay on the CIL 22 and CTO claims based on a three-year statute of limitations, but lose on the Total FBP 23 claims, the total FLSA backpay for all 2,537 Plaintiffs based on the City's methodology is 24 $354,933.46. ECF No. 571-1 at 1, Declaration of Alison P. Adema (“Adema Decl.”) ¶ 25 16. If Plaintiffs prevail on their liquidated damages claim, Plaintiffs’ damages would 26 increase to $709,866.92. Id. If Plaintiffs prevail on their position that the City is liable 27 1 for backpay on all of their claims – CIL, Total FBP and CTO – based on a three-year 2 statute of limitations, the total FLSA backpay for all 2,537 Plaintiffs based on the City’s 3 methodology is $1,634,005.90. Id. If Plaintiffs further prevail on their position that the 4 City is liable for liquidated damages on these claims, Plaintiffs damages increase to 5 $3,268,011.80. Id. 6 These recoveries assume that a statute of limitations period of three years applies, 7 and that Plaintiffs would additionally prevail in proving that the City’s FBP did not 8 qualify as “bona fide” for the fiscal years at issue – 2017, 2018, and 2019. If the City 9 were to prevail on its defenses to this claim for one or more fiscal years, however, 10 Plaintiffs' recovery would be reduced proportionately. Id. 11 Under the Settlement Agreement, the City has agreed to pay a total sum of 12 $6,199,997.98, which represents approximately twice the maximum value of Plaintiffs’ 13 damages if the City’s methodology is accepted as the proper method. Id. at 29. The 14 Parties note that although acceptance of the Settlement Agreement may risk decreasing 15 the potential award for each Plaintiff, as compared to if they were successful in litigating 16 all their claims, but that this assumption of this risk is warranted and such settlement is 17 favored since litigation may take many more months or years, including any potential 18 appeals. Id. Given the wide range of outcomes, the Court agrees with the parties’ 19 contention that there is significant risk presented by continued litigation. 20 2. Stage of Proceedings and Amount of Discovery Completed 21 The Court assesses the stage of proceedings and the amount of discovery 22 completed to ensure the parties have an adequate appreciation of the merits of the case 23 before reaching a settlement. Selk, 159 F.Supp.3d at 1177 (citing Ontiveros v. Zamora, 24 303 F.R.D. 356, 371 (E.D.Cal.2014)). The Parties state that over the course of the two 25 years of litigation they have engaged in sufficient informal and formal discovery – 26 including the City’s provision of information regarding FBP data, the amounts of FBP 27 1 credits, actual payroll and time records. ECF No. 571 at 15. Parties also state that they 2 have conferred multiple times with the City’s retained expert on his methods, work 3 product, and calculations, and requested changes and corrections in order to arrive at a set 4 of calculations which all Parties now believe in good faith represent a correct 5 determination of each Plaintiff’s damages. Id. 6 The City has responded to Plaintiffs’ written discovery requests; Plaintiffs have 7 deposed City’s “most knowledgeable” persons; the City has produced FBP data to show 8 how and in what amounts FBP credits under the City’s plan were allocated to cash, other 9 forms of cash-in-lieu, and to insurance options; and finally, the City produced actual 10 payroll and time records for all Plaintiffs to the City’s retained forensic expert so that he 11 could determine damages. ECF No. 571 at 14. Additionally, the Parties’ counsel have 12 conferred several times with the City’s retained expert in order to ascertain his methods 13 and examine his work product, and both have requested changes and corrections in order 14 to arrive at a set of calculations that both Parties believe in good faith represent a correct 15 determination of Plaintiffs’ potential damages. Id. at 15. Accordingly, the Court finds 16 that the parties have engaged in meaningful discovery and this factor favors approval of 17 the Settlement Agreement. Ching v. Siemens Industry, Inc., No. 11–cv–04838–MEJ, 18 2014 WL 2926210, *5 (N.D. Cal. Jun. 27, 2014) (extent of discovery weighed in favor of 19 approving a settlement where class counsel “conducted interviews, propounded extensive 20 written discovery, discussed the case with opposing counsel, analyzed thousands of pages 21 of documents, deposed Defendants' person most knowledgeable, analyzed damages, 22 reviewed time and pay records and policy documents, and collected evidence”). 23 3. Seriousness of the Litigation Risks 24 25 The seriousness of the litigation risks also weighs in favor of approval of the 26 Settlement Agreement. Settlement is favored where “there is a significant risk that 27 litigation might result in a lesser recover[y] for the class or no recovery at all.” 1 Bellinghausen v. Tractor Supply Co., 306 F.R.D. 245, 255 (N.D. Cal. 2015). If a 2 settlement in an FLSA lawsuit reflects a reasonable compromise over issues that are 3 actually in dispute, the “court may approve the settlement ‘in order to promote the policy 4 of encouraging settlement of litigation.’ ” Selk, 159 F.Supp.3d at 1173; Nen Thio v. 5 Genji, LLC, 14 F. Supp. 3d 1324, 1333 (N.D. Cal. 2014); Lynn’s Food Stores, 679 F.2d 6 at 1353 n.8 (requiring “settlement of a bona fide dispute between the Parties with respect 7 to coverage or amount due under the [FLSA]”). 8 Parties state that the Settlement Agreement provides Plaintiffs with substantial 9 relief while continued litigation could harm Plaintiffs' interests by jeopardizing the relief 10 which will be secured by settlement. Specifically, the Parties point to five bona fide 11 disputes which persist and could jeopardize the recovery for Plaintiffs in the event the 12 litigation were to continue: (1) whether the City had underpaid FLSA overtime by 13 excluding the cash-in-lieu portion of its FBP only or by excluding the full or total FBP 14 amount (ECF No. 571 at 18-19); (2) whether the City had underpaid compensatory time 15 off (“CTO”) by excluding FBP compensation when calculating permissible cash-outs 16 (ECF No. 571 at 19-20); (3) whether the City should pay liquidated damages in addition 17 to actual wage damages (ECF No. 571 at 20-22); (4) whether applicable statute of 18 limitations is the baseline two-year statute of limitations under FLSA, or an extended 19 three-year statute of limitations on the basis that the FLSA violation was “willful” (ECF 20 No. 571 at 22); and (5) what methodology should be applied to calculate the amount of 21 any underpayment. ECF No. 571 at 23-24. The parties describe the dispute over 22 methodology to be the “largest settlement variable.” Id. at 17. 23 The Parties have ultimately determined, based on the risks associated the 24 aforementioned five bona fide disputes, that the Total Settlement Amount should equal a 25 sum of $6,199,997.98. The damage calculations for the CIL claim and the Total FBP 26 claim were premised on the alleged underpaid overtime and an equal amount of 27 1 liquidated damages. The CIL claim used a three-year statute of limitations through June 2 30, 2019, from each Plaintiff’s opt-in date, plus the Court-ordered five-month tolling 3 period where applicable, reduced by application of the offsets and credits available to the 4 City under FLSA because the City paid overtime to employees in compliance with 5 Personnel Regulations and labor agreements which exceeded what the FLSA requires. 6 Id. at 26. The Total FBP claim used a two-year statute of limitations based on each 7 Plaintiff’s opt-in date through June 30, 2019, plus the Court-ordered five-month tolling 8 period where applicable, but in any event not before July 1, 2016 and these calculations 9 cover three fiscal years, from 2017 through 2019. Id. at 26. The amount of each 10 Plaintiff’s damages was reduced by application of the offsets and credits available to the 11 City under FLSA because the City began including the CIL portion of an employee’s 12 Total FBP on July 1, 2017, and because the City paid overtime to employees in 13 compliance with Personnel Regulations and labor agreements which exceeded what 14 FLSA required. Id. at 27. 15 In light of the above-referenced uncertainty, the Court find that the parties would 16 face substantial litigation risk were this action to continue. Further, “[t]he expense and 17 possible duration of the litigation should be considered in evaluating the reasonableness 18 of [a] settlement.” Glass v. UBS Fin. Servs., Inc., No. C-06-4068 MMC, 2007 WL 19 221862, at *4 (N.D. Cal. Jan. 26, 2007), aff'd, 331 F. App'x 452 (9th Cir. 2009). 20 Accordingly, this factor supports approval of the Settlement Agreement. 21 4. Scope of Release Provision in the Settlement Agreement 22 23 Courts review the scope of any release provision in a FLSA settlement to ensure 24 that class members are not pressured into forfeiting claims, or waiving rights, unrelated to 25 the litigation, and are especially skeptical of release provisions that require employees to 26 forfeit claims that are designed to advance public values. Selk, 159 F.Supp.3d at 1178 27 (citing Luo v. Zynga, Inc., No. 13–cv–00186 NC, 2014 WL 457742 at *3 (N.D. Cal. Jan. 1 31, 2014)). The underlying concern is that an overly wide-reaching release of claims 2 may evince an attempt by an employer to use employee wages as a bargaining chip to 3 extract valuable concessions from the employees. Id. A FLSA settlement – especially 4 when members opt in in order to receive only unpaid wages and related damages – 5 should generally be limited to the specific claims at issue in the lawsuit. Id. Here, the 6 applicable release provision in the Settlement Agreement provides: 7 Upon final approval by the Court of the AGREEMENT, PLAINTIFFS agree to fully discharge any and all claims, charges, grievances, complaints, allegations, 8 and causes of action related to or arising out of the allegations made in the 9 ACTIONS related to the treatment of FBP remuneration, whether asserted or unasserted, through the date the Court approves the AGREEMENT, and that this 10 settlement includes all claims made in the ACTIONS for unpaid overtime based on 11 the regular rate of pay, the payment of compensatory time off at the regular rate of pay, the methodology the City used to calculate FLSA overtime pay on FBP 12 credits, liquidated damages, and interest ("RELEASED CLAIMS"), and 13 PLAINTIFFS fully, finally and completely release, waive, and discharge CITY, and its elected and administrative officers, agents, employees, successors and 14 assigns from FLSA claims related to the treatment of FBP renumeration, whether 15 asserted or unasserted, through the date the Court approves this AGREEMENT. 16 PLAINTIFFS acknowledge and understand that PLAINTIFFS have the right to 17 pursue any FLSA claims related to the treatment of FBP remuneration that PLAINTIFFS might have based on events occurring or payments made after the 18 date the COURT approves this AGREEMENT. 19 20 ECF No. 571-2 at 10. The above language will be distributed to all Plaintiffs as an 21 Acknowledgment and Acceptance of Settlement and Release of Claims Form which 22 contains the following parallel release language: 23 I understand and agree that my acceptance of the Agreement constitutes a full and 24 complete settlement of all my FLSA claims related to the treatment of FBP 25 remuneration, whether asserted or un-asserted, through the date of Court approval of the Settlement Agreement in this case, and that this settlement includes all 26 claims made in the Action for unpaid overtime based on the regular rate of pay, the 27 1 payment of compensatory time off at the regular rate of pay, the methodology the City used to calculate FLSA overtime pay on FBP credits, liquidated damages, and 2 interest, and I fully, finally and completely release, waive, and discharge the City 3 of San Diego, and its elected and administrative officers, agents, employees, successors and assigns from FLSA claims related to the treatment of FBP 4 remuneration, whether asserted or un-asserted, through the date of Court approval 5 of the Settlement Agreement. I understand that the City will pay reasonable attorneys' fees and costs which my attorneys incurred in this action based on an 6 award subsequently approved by the Court and that this award will be in addition 7 to the amounts paid to me and not deducted from those amounts. I further agree to dismiss, with prejudice, my claims in the Action. I understand and acknowledge 8 that the City expressly denies liability for any and all claims or demands and that 9 the Agreement reflects a compromise settlement of disputed claim. 10 ECF No. 571-2 at 126. To receive payment under the Settlement, Plaintiffs will be 11 required to execute and return the Acknowledgment and Acceptance of Settlement and 12 Release of Claims Form. 13 The release form provides that Plaintiffs are only releasing their FLSA overtime 14 claims related to the treatment of FBP remuneration through the date of Court approval of 15 this Settlement Agreement and they are specifically advised of their "right to pursue any 16 FLSA claims related to the treatment of FBP remuneration that [Plaintiff] might have 17 based on events occurring or payments made after the date of Court approval of the 18 Settlement Agreement. ECF No. 571 at 16. Plaintiffs’ counsel state that they are “fully 19 satisfied” that the agreed-upon language is narrowly tailored to bind all Plaintiffs only as 20 to their specific FLSA claims related to FBP remuneration, whether asserted or 21 unasserted. The Court agrees and finds that the Parties have agreed on a narrowly- 22 tailored release that meets the applicable standards under the FLSA. 23 24 5. Experience and Views of Counsel 25 In determining whether a settlement is fair and reasonable, “[t]he opinions of 26 counsel should be given ·considerable weight both because of counsel’s familiarity with 27 1 th[e] litigation and previous experience with cases.” Larsen v. Trader Joe’s Co., 2014 2 WL 3404531, *5 (N.D. Cal. Jul. 11, 2014). 3 As an initial matter, both Parties’ counsel have years of experience advocating for 4 employees and employers in wage and hour cases. Id. at 29-30. Plaintiffs’ counsel assert 5 that the terms of the Settlement Agreement are “fair, just, and reasonable” sine the 6 settlement amount for each Plaintiff represents the full potential value of their claim 7 assuming Plaintiffs prevail on all disputed issues except methodology and, as to 8 methodology, the City is adding to each Plaintiff’s damages amount in a manner that 9 Plaintiffs’ counsel considers to be fair and reasonable. Id. at 29. Although both Parties 10 disagree as to the amounts that Plaintiffs are owed based on the bona fide dispute, the 11 Parties agree that their decision to settle according to the terms of the Settlement 12 Agreement is prudent in order to achieve finality and certainty. Id. at 30. The opinions 13 of the Parties’ counsel should be given considerable weight both because of counsel's 14 familiarity with this litigation and previous experience with cases. Therefore this factor 15 weighs in favor of approval. 16 6. Possibility of Fraud or Collusion 17 The Court finds no evidence that the Settlement resulted from, or was influenced 18 by, fraud or collusion. “A key factor supporting this finding is that the amount of the 19 individual settlement payments to be received by opt-in members is based on an analysis 20 of employee time records.” Selk, 159 F. Supp. 3d at 1179. “This approach guards 21 against the arbitrariness that might suggest collusion.” Id. Here, the Parties’ Settlement 22 does not involve a lump sum of money to be divided on an arbitrary basis by all plaintiffs 23 but instead, the size of each Plaintiff’s recovery has been calculated based on their time 24 records and payroll data; this takes into account how much FLSA-eligible overtime each 25 plaintiff worked, the amount of total FBP credits the Plaintiff had available, the 26 Plaintiff’s opt-in date, and the effect of permissible offsets and credits lawfully available 27 1 to the City. ECF No. 571 at 12. Additionally, the record in this case shows that the 2 Settlement was the result of arms-length negotiations: the Parties’ counsel have had 3 conducted two in-person settlement conferences with Magistrate Bernard Skomal in 4 December 2018 and again in May 2019, in addition to numerous telephonic conferences 5 with Magistrate Bernard Skomal and several in-person and telephone conferences and 6 among the Parties' counsel. ECF No. 571-1 ¶ 11. Accordingly, the Court finds that there 7 is no evidence that fraud or collusion exists. 8 IV. CONCLUSION AND ORDER 9 The FLSA was designed “to extend the frontiers of social progress by insuring to 10 all our able-bodied men and women a fair day’s pay for a fair day's work.” A.H. Phillips, 11 Inc. v. Walling, 324 U.S. 490, 493 (1945). As such, the substantive labor rights provided 12 for in the statute – including the minimum wage and maximum hour provisions – are 13 afforded exceptionally strong protection. Selk, 159 F. Supp. 3d at 1181. When private 14 parties submit a settlement purporting to resolve claims brought under FLSA, courts must 15 scrutinize the settlement to ensure it represents a fair and reasonable resolution of a bona 16 fide dispute rather than a “mere waiver of statutory rights brought about by an employer's 17 overreaching.” Lynn’s, 679 F.2d at 1354. Here, after evaluating the Settlement 18 Agreement under the totality of circumstances described above, the Court finds it to be a 19 fair and reasonable resolution of a bona fide dispute over FLSA provisions. Accordingly, 20 the Court GRANTS Plaintiff's motion for approval of settlement. 21 / / / 22 / / / 23 / / / 24 / / / 25 / / / 26 / / / 27 1 IT IS HEREBY ORDERED that, 2 1. The Settlement Agreement submitted to the Court as Exhibit 1 to the 3 Declaration of Alison P. Adema (ECF No. 571-2) is approved as a fair and just 4 negotiated resolution of bona fide disputes between the Parties in these 5 consolidated Actions, and the Parties shall fully abide by and perform the 6 Settlement Agreement in its entirety and according to its terms; 7 2. The Actions are dismissed WITH PREJUDICE as to the 487 Plaintiffs in the 8 Kries case identified on Exhibit A to the Settlement Agreement, the 1,153 9 Plaintiffs in the Mitchell case identified on Exhibit B to the Settlement 10 Agreement, and the 897 Plaintiffs in the Arellano case identified on Exhibit C 11 to the Settlement Agreement; 12 3. The Court reserves jurisdiction over the above-captioned matters for purposes 13 of enforcing the Settlement Agreement, approving any resolution of claims for 14 the 35 inadvertently omitted lifeguards in the Mitchell case, and determining 15 plaintiffs’ attorney fees and costs; 16 4. The Court directs parties to file a joint motion for approval of the settlement as 17 to the 35 inadvertently omitted lifeguards in the Mitchell case on or before 18 August 14, 2020, and additionally directs parties to file briefing regarding 19 timing requirements related to the Court’s approval of such a joint motion on or 20 before July 31, 2020; 21 5. Because there will be additional work by plaintiffs’ counsel to assist all 2,537 22 plaintiffs in the timely processing of their claims over a 4-month period 23 following approval, as well as additional work to be done by counsel in the 24 Mitchell Action to address and resolve the claims of 35 omitted lifeguards, the 25 Court directs parties to file a motion for attorney fees and costs on or before 26 October 16, 2020. Any response will be filed on or before November 6, 2020. 27 | Any reply must be filed on or before November 12, 2020. A hearing on this 2 matter is scheduled for November 20, 2020 at 1:30 PM in Courtroom 2D; 3 6. Judgment is hereby entered on the terms set forth above. 4 5 IT IS SO ORDERED. 6 || Dated: July 2, 2020 7 Hon. athe Ck g United States District Judge 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 17 28 17-cv-1464-GPC-BGS