Collins v. Sanderson Farms, Inc., Civil Action No. 06-2946.
| Decision Date | 09 July 2008 |
| Docket Number | Civil Action No. 06-3835.,Civil Action No. 06-2946. |
| Citation | 568 F.Supp.2d 714 |
| Parties | Annie COLLINS on behalf of herself and All Others Similarly Situated v. SANDERSON FARMS, INC. (Production Division), et al. |
| Court | U.S. District Court — Eastern District of Louisiana |
Robert Lyle Salim, Robert L. Salim, Attorney at Law, Natchitoches, LA, Joseph Thomas Anderson, Anderson & Boutwell, Hammond, LA, William S. Hommel, Jr., William S. Hommel, Jr., William S. Hommel, Jr., PC, Tyler, TX, for Plaintiff.
Aub A. Ward, Naquin & Ward, Baton Rouge, LA, Brian P. McCafferty, Kenney, Lennon & Egan, Plymouth Meeting, PA, Michael Hamilton, Provost, Umphrey Law Firm, LLP, Nashville, TN, Roger K. Doolittle, Attorney at Law, Jackson, MS, for Consol Plaintiffs.
Walter W. Christy, Coats | Rose, New Orleans, LA, for Intervenor.
Clyde H. Jacob, III, Christopher E. Moore, Coats | Rose, New Orleans, LA, for Defendant.
By separate order, the Court has granted the motion of plaintiffs in this Fair Labor Standards Act ("FLSA") collective action, Annie Collins on behalf of herself and All Others Similarly Situated ("plaintiffs") and defendants, Sanderson Farms, Inc. (Production Division) and Sanderson Farms, Inc. (Processing Division) (collectively, "Sanderson Farms") for final approval of a settlement of this lawsuit. Rec. Doc. 278. A hearing was held on this motion on June 19, 2008. The Court issues this opinion to explain its order approving the settlement under the applicable law.
The plaintiffs brought suit on behalf of herself and other past and present employees at the poultry processing plants of Sanderson Farms, Inc., in Mississippi, Louisiana, Texas, and Georgia, claiming that they should be compensated for time spent donning and doffing protective gear and equipment, cleaning and sanitizing, and walking to and from work stations. The named plaintiff, an hourly, non-exempt employee, alleged violations of her statutory employment right to receive pay for all compensable time and overtime worked for the defendants, under the FLSA, 29 U.S.C. § 201, et seq., and sought to represent all other similarly situated past and present employees and to have the action certified as a collective action pursuant to Section 16(b) of the FLSA, 29 U.S.C. § 216(b). The parties agreed to authorize a collection action under this section, and reached the proposed settlement affecting the processing and foods employees that don and doff protective and sanitary equipment.1
The Settlement Agreement setting out in greater detail the terms of the proposed settlement is entered in the record at Rec. Doc. 271 (Amended Second Stipulation of Settlement Agreement). The agreement provides a settlement fund of $3,120,000 to play claims of the class, which totals approximately 8300 employees, litigation and settlement costs, and attorney's fees. The claims fund from which the plaintiffs' claims will be paid totals $2,450,000. Attorney's fees total $770,000,2 which is 25% of the original settlement amount of $3,000,000. The defendants did not object to fees for plaintiffs' counsel in this amount, and the parties requested joint approval of the fees.
Eligible class members who have opted into the lawsuit will be paid from the claims fund according to an agreed-upon formula, which provides for the payment of $.0913 per hour for each hour worked between June 4, 2004 and August 1, 2007. Based on an average wage rate for Sanderson Farms employees of $9.13 an hour, this computes to 4.8 minutes of pay per day for donning and doffing and walking to and from work stations. See Rec. Doc. 278 at 6-7, 7 n. 3. This rate reflects the calculation of Sanderson Farms' expert of a maximum of 8 minutes per day spent donning and doffing and traveling to and from work stations prior to June 1, 2006, when new smock stations were in place at all facilities3 and a maximum of 4 minutes per day thereafter until August 1, 2007. This compensation is net of any fees and expenses, which are to be paid to plaintiffs' counsel separately under the settlement agreement.
In addition, Sanderson Farms has changed its time keeping practices by compensating its employees for time spent traveling to and from their work stations, and donning and doffing before and after their shifts, and by providing meal breaks that are free of donning and doffing activities.
This Court must approve any settlement reached by the parties which resolves the claims in this action brought under Section 16(b) of the FLSA. The Court's role in this situation is in many ways comparable to, but in others quite distinguishable from, that of a court in a settlement of a class action brought pursuant to FED.R.CIV.P. 23, and derives from the special character of the substantive labor rights involved. Accordingly, it is appropriate to briefly discuss the rights at issue.
The FLSA was enacted for the purpose of protecting all covered workers from substandard wages and oppressive working hours. Barrentine v. Arkansas-Best Freight System, 450 U.S. 728, 739, 101 S.Ct. 1437, 67 L.Ed.2d 641 (1981); 29 U.S.C. § 202(a). It was designed to ensure that each employee covered by the Act would receive "[a] fair day's pay for a fair day's work and would be protected from the evil of overwork as well as underpay." Id. at 739, 101 S.Ct. 1437 (internal citations and quotations omitted). Congress recognized that "due to the unequal bargaining power as between employer and employee, certain segments of the population required federal compulsory legislation to prevent private contracts on their part which endangered national health and efficiency and as a result the free movement of goods in interstate commerce." Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697, 706-07, 65 S.Ct. 895, 89 L.Ed. 1296 (1945). The provisions of the statute are mandatory, and not subject to negotiation and bargaining between employers and employees. Id. at 707, 65 S.Ct. 895; Lynn's Food Stores, Inc. v. U.S. ex rel. U.S. Dept. of Labor, Employment Standards Admin., Wage and Hour Div., 679 F.2d 1350 (11th Cir.1982). Under Section 16(b), an employer who violates Section 206 or 207 is liable to the employee or employees affected in the amount of their unpaid minimum or overtime compensation, and for an additional equal amount as liquidated damages. 29 U.S.C. § 216(b).
The Supreme Court issued two opinions in the 1940s that defined the scope of private settlement and waiver of claims under Section 16(b). In O'Neil, the Court refused to give effect to a waiver signed by employees of their right to liquidated damages under the FLSA. The Court noted that at issue were private rights that affected the public interest, and that in such circumstances such rights cannot be waived or released if such release would thwart the legislative policy the grant of the private right was designed to effectuate. 324 U.S. at 707, 65 S.Ct. 895. "No one can doubt but that to allow waiver of statutory wages by agreement would nullify the purposes of the Act." Id. It went on to conclude that the same policy considerations forbidding waiver of basic minimum and overtime wages also prohibits waiver of employees rights to liquidated damages. Id. The liquidated damages provision is not penal in nature, but rather constitutes compensation for all the damages employees (earning statutory subsistence wages) are likely to sustain when they are not paid on time. Id. at 707-08, 65 S.Ct. 895. That is, "double payment must be made in the event of delay in order to insure restoration of the worker to that minimum standard of well-being." Id. at 707, 65 S.Ct. 895.
The next year, the Court in D.A. Schulte, Inc. v. Gangi, 328 U.S. 108, 66 S.Ct. 925, 90 L.Ed. 1114 (1946), held that FLSA barred a private settlement agreement, in which employees agreed to release an employer from liquidated damages claims in return for full payment of wages arguably due and unpaid, even where there was a bona fide dispute as to whether the employees were covered by the Act. "We think the purpose of the Act, which we repeat from the O'Neil case was to secure for the lowest paid segment of the nation's workers a subsistence wage, leads to the conclusion that neither wages nor the damages for withholding them are capable of reduction by compromise of controversies over coverage." Id. at 116, 66 S.Ct. 925. The Court recognized, in essence, that the same unequal bargaining power between employers and employees that underlies the Act and its rule that private parties may not negotiate subminimum wages, would potentially be present in any private settlement of claims for such wages. See also Walton v. United Consumers Club, 786 F.2d 303, 306 (7th Cir.1986); Hohnke v. U.S., 69 Fed.Cl. 170, 175 (Fed.Cl.2005).
In a well-reasoned and oft-cited decision, the Eleventh Circuit concluded that there are two ways in which back wage claims arising under the FLSA can be settled or compromised by employees and employers. Lynn's Food Stores, 679 F.2d 1350. In addition to the waiver by employees of the right to bring suit for both unpaid wages and liquidated damages when the Secretary of Labor supervises a settlement pursuant to 29 U.S.C. § 216(c), the court recognized that "[w]hen employees bring a private action for back wages under the FLSA [under § 216(b)], and present to the district court a proposed settlement, the district court may enter a stipulated judgment after scrutinizing the settlement for fairness." Id, at 1353 (citing Gangi, 328 U.S. 108, 66 S.Ct. 925, and Jarrard v. Southeastern Shipbuilding Corp., 163 F.2d 960, 961 (5th Cir.1947)).
In order to approve a settlement proposed by an employer and employees of a suit brought under the FLSA...
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