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Employees’ overtime pay suit resolved via settlement

After almost two years of litigation between a scaffolding company and its employees, a settlement was proposed. Because the agreement would give the named and opt-in plaintiffs the majority of their claimed overtime pay, there was no suggestion of collusion and plaintiffs were represented by experienced counsel who discounted their fees, the settlement was approved.

Background

Scaffolding Solutions LLC is engaged in the business of erecting and dismantling scaffolding. The named plaintiffs and opt-in plaintiffs were employees of defendant who worked out of the Chesapeake location between October 2014 and April 2018. Plaintiffs allege Scaffolding Solutions violated the Fair Labor Standards Act, or FLSA.

The parties have reached a proposed settlement. According to the proposed settlement agreement, defendant agreed to pay a total amount of $200,000 to settle this action. In exchange, the named plaintiffs and all participating members agree to release their claims against Scaffolding Solutions. Pursuant to the joint motion for settlement approval, the 20 opt-in plaintiffs will share $85,000 in damages, $5,000 is allocated to costs and $110,000 allocated to attorneys’ fees.

Report and recommendation

All FLSA settlements must be approved either by the United States Department of Labor or the court. Factors the court weighs when considering approval of an FLSA settlement agreement for a class action include: (1) the extent of discovery conducted; (2) the stage of the proceedings; (3) the absence of fraud or collusion in the settlement; (4) the experience of counsel who have represented the plaintiffs; (5) the opinions of class counsel and class members and (6) the amount of settlement in relation to the potential recovery.

Regarding the first and second factors, this case has been actively litigated for almost two years. Third, there is neither evidence, nor even a suggestion, of any collusion on the part of the parties. Fourth, plaintiffs’ counsel are experienced in FLSA cases, labor and employment law and collective and class actions. Fifth, both sides agree that the settlement is a fair and reasonable compromise between the parties. Sixth, the amount of settlement in relation to the potential recovery is reasonable in light of the strengths and weaknesses in each party’s case.

With 20 opt-in plaintiffs, the $85,000 settlement amount designated for the plaintiffs will average out to $4,250 per opt-in plaintiff, accounting for 90% of opt-in plaintiffs’ collective overtime pay over a two-year statutory period. As a result, the amount of settlement in relation to the potential recovery weighs in favor of approving the settlement.

Finally, the court must analyze attorneys’ fees in approving the proposed settlement. In support of their request for attorneys’ fees, plaintiffs’ counsel proffered itemized billing statements. Based on the lodestar calculations, plaintiffs’ counsel have expended more than $675,000 in attorneys’ fees, but are requesting a fee award in the amount of $110,000, an amount approximately 16% of the lodestar attorneys’ fees. While the amount of hours incurred has been suggested to be excessive, and the requested hourly rate for the lead attorneys is somewhat higher than this court has previously authorized, the court finds that the fee request is fair and reasonable.

For all these reasons, the court recommends that the settlement be accepted by the district judge.

District court opinion

The court adopts and approves in full the findings and recommendations set forth in the magistrate judge’s report and recommendation. Accordingly, the parties’ joint motion for settlement approval is granted.

Joint motion for settlement granted.

Epps v. Scaffolding Solutions LLC, Case No. 17-cv-562, Dec. 11, 2019. EDVA at Norfolk (Smith). VLW 019-3-598. 15 pp.

VLW 019-3-598