Love v. Gannett Co.

• Decision Date: 24 September 2021
• Docket Number: 3:19-cv-296-BJB-RSE
• Parties: NICOLE LOVE, Plaintiff, individually and on behalf of those similarly situated, v. GANNETT CO. INC., GANNETT SATELLITE INFORMATION NETWORK, LLC, AND GCOE, LLC Defendants
• Court: U.S. District Court — Western District of Kentucky

NICOLE LOVE, Plaintiff, individually and on behalf of those similarly situated, v. GANNETT CO. INC., GANNETT SATELLITE INFORMATION NETWORK, LLC, AND GCOE, LLC Defendants

No. 3:19-cv-296-BJB-RSE

United States District Court, W.D. Kentucky, Louisville Division

September 24, 2021

MEMORANDUM OPINION & ORDER

BENJAMIN BEATON, UNITED STATES DISTRICT COURT.

Three of Gannett's former call-center employees sued Gannett raising several claims of unfair labor practices under state and federal law. See Original Complaint (DN 1).^[1] They invoked the “collective action” provision of the Fair Labor Standards Act. Id. at 2. Under the FLSA, Congress authorized plaintiffs to sue “for and in behalf of himself . . . and other employees similarly situated.” 29 U.S.C. 216(b).

After more than two years of litigation, two amended complaints (DNs 89 &139), and an order granting conditional certification of an FLSA collective (DN 123), the lone remaining named plaintiff, Nicole Love, asks the Court to approve the parties' settlement agreement and dismiss this case with prejudice. See Unopposed Motion for Settlement Approval &Dismissal (DN 136).

Judicial Approval of FLSA Settlements

“The Sixth Circuit has yet to rule definitively on the question” whether the FLSA requires court approval of settlement agreements. Steele v. Staffmark Invs. 172 F.Supp.3d 1024, 1026 (W.D. Tenn. 2016). The parties have asked the Court to approve their settlement of this FLSA case, consistent with the general practice in this judicial district. See, e.g., Mitcham v. Intrepid U.S.A Inc., No. 3:17-cv-703, 2019 WL 5496023, at *2 (W.D. Ky. May 28, 2019) (“As a general rule, employees' claims under the FLSA are non-waivable and may not be settled without supervision of either the Secretary of Labor or a district court.”) (quoting Gentrup v. Renovo Servs., LLC, No. 1:07-cv-430, 2011 WL 2532922, at *2 (S.D. Ohio Jun. 24, 2011)); Ross v. Jack Rabbit Servs LLC, No. 3:14-cv-44, 2016 WL 7320890, at *2 (W.D. Ky. Dec. 15, 2016) (“[C]ourts in the Sixth Circuit require a settlement agreement under the FLSA to be approved by the court.”).

Courts in this circuit apply the same analysis to settlement agreements in the FLSA context that they do in the Rule 23 context. See Mitcham, 2019 WL 5496023, at *2. They ask whether a proposed settlement agreement “is a ‘fair, reasonable, and adequate' resolution of a bona fide legal dispute.” Id.; Burnham v. Papa John's Paducah, LLC, No. 5:18-cv-112, 2020 WL 2065793, at *1 (W.D. Ky. Apr. 29, 2020). Courts also determine whether the settlement will distribute proceeds equitably and whether those distributions, any service award for the representative plaintiff, and the requested attorneys' fees are reasonable. See Burnham, 2020 WL 2065793, at *4-5.

A. The settlement resolves a bona fide dispute.

“A federal district court approving any settlement of claims must determine whether a bona fide dispute exists to ensure that plaintiff employees have not”-at least not without good cause- “relinquished their rights to compensation guaranteed by the statute.” Id. at *1 (quoting Ross, 2016 WL 7320890, at *2). “Without a bona fide dispute, no settlement could be fair and reasonable. Thus, some doubt must exist that Plaintiffs would succeed on the merits through litigation of their claims.” Id. (quoting Ross, 2016 WL 7320890, at *2).

The hard-fought litigation in this case leaves little doubt about the existence of a bona fide dispute. Gannett has denied the allegations of FLSA violations at each turn. See Answer to Original Complaint (DN 21); Answer to FAC (DN 93); Objection to Motion for Conditional Certification (DN 96) at 11-12. And Gannett continues to deny FLSA violations in the proposed settlement agreement itself. Settlement Agreement (DN 136-1) at 3-4. This proposed settlement plainly resolves a bona fide dispute. See Burnham, 2020 WL 2065793, at *1.

B. The settlement is a fair, reasonable, and adequate resolution of the dispute.

Courts generally “regard the adversarial nature of a litigated FLSA case to be an adequate guarantor of fairness.” Jones v. H&J Restaurants, No. 5:19-cv-105, 2020 WL 6205685, at *5 (W.D. Ky. Oct. 22, 2020). But courts in this district nevertheless generally apply a seven-factor test (originating in the Rule 23 context) for confirming that a settlement agreement is a fair, reasonable, and adequate resolution:

(1) the risk of fraud or collusion

(2) the complexity, expense and likely duration of the litigation

(3) the amount of discovery engaged in by the parties

(4) the likelihood of success on the merits

(5) the opinions of class counsel and class representatives

(6) the reaction of absent class members

(7) the public interest

Burnham, 2020 WL 2065793, at *2; Mitcham, 2019 WL 5496023, at *2; Ross, 2016 WL 7320890, at *2. Here, each of the applicable factors indicates the proposed settlement is fair, reasonable, and adequate.

First, absent evidence of fraud or collusion, the Court may presume none exists. See Burnham, 2020 WL 2065793, at *2 (quoting Ross, 2016 WL 7320890, at *3). Here, the parties agreed to a settlement only “after engaging in arm's-length negotiations with a well-respected wage and hour mediator through formal mediation.” Unopposed Motion at 7. No evidence of fraud or collusion exists in this case.

Second, no one doubts that “continuing to litigate this case would result in greater expense for both parties and increase the duration of the litigation.” Burnham, 2020 WL 2065793, at *2.

Third, the parties have engaged in substantial investigation of the claims and enough discovery to ensure that “the issues are well understood by both sides.” Unopposed Motion at 8; Mitcham, 2019 WL 5496023, at *3.

Fourth, the Court is in a relatively poor position to assess the likelihood of success on the merits because the parties have not argued many of the outstanding issues in this case. And the one issue most fully briefed-final certification of the collective-remains undecided after the Court's provisional decision. See Schneider v. Goodyear Tire & Rubber Co., No. 5:13cv2741, 2014 WL 2579637, at *2 (N.D. Ohio June 9, 2014). But as the Court noted in its Conditional Certification Order (DN 123), some questions certainly persist regarding who would prevail if the parties litigated this case to judgment.

Fifth, class counsel and the named plaintiff representing the collective both support the settlement. See Unopposed Motion at 9-10; Ross, 2016 WL 7320890, at *4 (support of counsel and collective representative weighs in favor of settlement approval).

The sixth factor-absent class members-is largely irrelevant in the FLSA context. Unlike in a Rule 23 settlement, no absent class members exist in this opt-in collective action. And the Court is unaware of any objections from those who have opted in, or attempted to opt in, to the collective. Ross, 2016 WL 7320890, at *4.

Seventh, and finally, the agreement promotes the “strong public interest in encouraging settlement” because it “reflects a reasonable compromise over issues actually disputed.” Id. at *4 (quoting In re Sketchers Toning Shoe Prods. Liab. Litig., No. 3:11-MD-2308, 2013 WL 2010702, at *7 (W.D. Ky. May 13, 2013)).

C. The settlement proceeds will be distributed equitably.

“As a part of its exacting and thorough examination of a class-action settlement, a court must ensure that the distribution of the settlement proceeds is equitable.” Burnham, 2020 WL 2065793, at *4 (quoting Crawford, 2008 WL 4724499, at *9); see also Int'l Union, United Auto., Aerospace, & Agric. Implement Workers of Am. v. Gen. Motors Corp., 497 F.3d 615, 629 (6th Cir. 2007) (“[T]he settlement need only be fair, reasonable, and adequate.”) (internal quotation marks omitted). “The need for equity in distributions of proceeds is no less in a collective-action settlement.” Burnham, 2020 WL 2065793, at *4 (quoting Crawford, 2008 WL 4724499, at *9).

As explained in the motion, “[e]ach FLSA Collective Member (including Plaintiff and Opt-In Plaintiffs) will be assigned a specific settlement amount based on the number of weeks he or she worked for Defendants during the Collective Period.” Unopposed Motion at 3; Settlement Agreement at 9. The Court agrees that this formula makes good sense in light of the work and violations alleged in this case, and therefore “ensures that the Net Settlement Amount is distributed fairly to the FLSA Collective Members.” Unopposed Motion at 12.

D. The service award for the named plaintiff is reasonable.

Courts often grant so-called service awards to named plaintiffs or collective representatives to compensate them “for the services they provided and the risks they incurred during the course of the class action litigation.” Ross, 2016 WL 7320890, at *5 (quoting Dillworth v. Case Farms Processing, Inc., No. 5:08-cv-1694, 2010 WL 776933, at *7 (N.D. Ohio, Mar. 8, 2010)); see, e.g., Ditsworth v. P&Z Carolina Pizza, No. 1:20-cv-84, 2021 WL 2941985, at *6 (W.D. Ky. July 13, 2021). “The Sixth Circuit has used the following factors to determine whether incentive awards are appropriate:

(1) the action taken by the Class Representatives to protect the interests of the Class Members and others and whether these actions resulted in a substantial benefit to Class Members;

(2) whether the Class Representatives assumed substantial direct and indirect financial risk; and

(3) the amount of time and effort spent by the Class Representatives in pursuing the litigation.”

Burnham, 2020 WL 2065793, at *4; see also Ross, 2016 WL 7320890, at *5 (same). Counsel must provide specific documentation of the time spent by an award recipient. “To ensure that these amounts are not in fact a bounty, ” courts require “counsel [to] provide the district court with specific...