Brock v. Scheuner Corp.
| Citation | 841 F.2d 151 |
| Decision Date | 08 March 1988 |
| Docket Number | 86-6028,Nos. 86-6027,s. 86-6027 |
| Parties | 28 Wage & Hour Cas. (BN 893, 108 Lab.Cas. P 35,037 William E. BROCK, Plaintiff-Appellant, Cross-Appellee, v. The SCHEUNER CORPORATION; Tropical Freeze, Inc.; Venture Corporation; Joseph M. Scheuner; Fannie Scheuner, and Harriet Skupin, Defendants-Appellees, Cross-Appellants. |
| Court | United States Courts of Appeals. United States Court of Appeals (6th Circuit) |
Robert C. Haynes, U.S. Dept. of Labor, Nashville, Tenn., Linda Jan S. Pack, Washington, D.C., William J. Stone, argued, for plaintiff-appellant, cross-appellee.
Kathryn Carlyle, argued, Shields, Carlyle and Velander, Memphis, Tenn., for defendants-appellees, cross-appellants.
Before ENGEL, KRUPANSKY and NELSON, Circuit Judges.
Plaintiff-appellant William E. Brock, Secretary of the United States Department of Labor (Secretary) appealed from, and the defendants-appellees, three related corporations and their principal owners and officers (defendants), 1 cross-appealed from the district court's order enforcing a settlement agreement concluded by the parties in this action commenced by the Secretary to enforce the wage and hour provisions of the Fair Labor Standards Act (FLSA), 29 U.S.C. Sec. 201 et seq. The record disclosed the following facts.
On July 8, 1981, the Secretary commenced this action in the United States District Court for the Western District of Tennessee pursuant to the district court's jurisdiction to restrain violations of the FLSA under 29 U.S.C. Sec. 217. The action was initiated because a 1980 investigation conducted by the Wage and Hour Division of the United States Department of Labor disclosed that the defendants' employees had been underpaid as a result of several unlawful practices including inadequate overtime payments, shorted hours, improper deductions for employer-provided meals, and improper deductions for tips. In his complaint, the Secretary sought injunctive relief and back wages for approximately 1200 employees.
After the defendants had answered by denying the allegations contained in the complaint, the parties began settlement negotiations. In January, 1983, the Secretary indicated his willingness to settle the case for one-half of the approximately $350,000 which he calculated had been underpaid to the defendants' employees. On February 10, 1983, counsel for the defendants telephoned counsel for the Secretary to discuss a possible settlement. During that conversation, counsel for the parties agreed that the matter should be settled by entry of a consent judgment which would enjoin the defendants from withholding back wages due their employees and from further violations of the FLSA. Counsel also agreed that the defendants would compute the amount of back wages due each employee and would pay the amounts in five equal installments, the first installment to be payable contemporaneously with the entry of judgment and each installment to become due quarterly thereafter. It was further agreed that interest was to accrue at a rate of 12% per annum on all sums remaining unpaid six months after entry of judgment. Defendants offered to settle the amount of back wages for $150,000, but counsel for the Secretary rejected that offer as insufficient. Counsel for the parties attended a settlement conference on February 17, 1983 but were again unable to agree on the amount of back wages to be paid to the defendants' employees.
On February 18, 1983, counsel for the parties exchanged several telephone calls during which they agreed to settle for one-half of the total amount due defendants' employees as calculated by the Secretary, or $162,714.32. The parties further agreed that all sums remaining unpaid after three years, i.e., the amount due former employees who could not be located, were to revert to the United States Treasury. Counsel for the Secretary accepted the responsibility of reducing the agreement to writing.
On March 4, 1983, the Secretary mailed a proposed draft of the consent judgment to counsel for the defendants. In this draft agreement, the Secretary incorporated several provisions which had not been agreed upon by the parties. Importantly, the Secretary included a provision requiring all payments to be made by certified or cashier's check as distinguished from a regular draft drawn upon the defendant's bank. This provision would have deprived the defendants of the "float" on their money, i.e., if the checks were simply drawn on the defendants' bank accounts, the defendants would have had the opportunity to collect interest on their funds until the employees-payees had negotiated the checks and the funds had been paid by the defendants' bank.
The defendants objected to this and several other provisions incorporated into the Secretary's draft of the agreement and refused to sign the document. Defendants also requested a recalculation of the sum due under the agreement. On May 18, 1983, defendants dispatched their own draft of the agreement to the Secretary, which draft, inter alia, omitted the requirement that payments be made by certified or cashier's checks. The defendants' draft was unacceptable to the Secretary.
Unable to resolve the dispute, the Secretary moved the district court to enforce the settlement agreement on June 22, 1983. The defendants responded by asserting that no agreement had been finalized. The district court referred the motion to a magistrate who conducted a hearing on the matter on November 14 and 15, 1983. The magistrate issued his report and recommendation on May 8, 1984.
In his report, the magistrate concluded that the parties had indeed concluded an agreement settling the litigation on February 18, 1983. In particular, the magistrate decided that the parties had agreed (1) that the defendants would be enjoined from future violations of the FLSA; (2) that the defendants would pay $162,714.32 in back wages to their employees and would calculate the amount due to each employee; (3) that payment was to be made in five installments, the first due upon entry of judgment and each installment due quarterly thereafter; (4) that interest would accrue at a rate of 12% per annum on all sums remaining unpaid six months after entry of judgment; and (5) that all sums remaining unpaid after three years were to revert to the United States Treasury. The magistrate expressly noted that "[t]he use of certified or cashier's checks was not specifically discussed between the parties." Based upon these findings, the magistrate recommended that the settlement agreement be enforced as drafted by the Secretary, that the district court enter the judgment nunc pro tunc effective May 18, 1983 so that interest would accrue six months after that date, 2 and that attorneys fees incurred in the enforcement proceedings be awarded to the Secretary.
Defendants timely filed objections to the magistrate's report and recommendation. The district court considered the objections de novo, and on July 15, 1985, the court concluded that the parties had indeed reached an agreement incorporating the terms as specified by the magistrate. The district court...
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Chancellor v. City of Detroit
...fails on its merits. While it is true that this Court has the equitable power to enforce a settlement agreement, Brock v. Scheuner Corp., 841 F.2d 151, 154 (6th Cir.1988), that remedy is restricted to cases where there is no dispute or ambiguity as to either the entry into, or the terms of ......
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Rosen v. Tennessee Com'R of Finance and Admin.
...permitted to alter the terms of the agreement.'" Brown v. County of Genesee, 872 F.2d 169, 173 (6th Cir.1989) (quoting Brock v. Scheuner, 841 F.2d 151, 154 (6th Cir. 1988)); Accord Mallory v. Eyrich, 922 F.2d 1273, 1279 (6th Cir.1991). Yet, for a private agreement, the Court must expressly ......
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Rosen v. Tennessee Com'R of Finance and Admin.
...permitted to alter the terms of the agreement." Brown v. County of Genesee, 872 F.2d 169, 174 (6th Cir.1989) (quoting Brock v. Scheuner, 841 F.2d 151, 154 (6th Cir. 1988)); Accord Mallory v. Eyrich, 922 F.2d 1273, 1279 (6th Cir.1991). Yet, for a private agreement, the Court must expressly r......
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Cernelle v. Graminex
...and equitable power to enforce the terms of a settlement agreement entered into by the parties to litigation. Brock v. Scheuner Corp. , 841 F.2d 151, 154 (6th Cir. 1988) (quotations and citations omitted). In most cases, as here, the settlement results in the dismissal of a lawsuit. Thereaf......