Owens v. Easy Store-It, Inc.

• Court: U.S. District Court — Middle District of Florida
• Writing for the Court: PATRICIA D. BARKSDALE United States Magistrate Judge
• Decision Date: 09 December 2020
• Docket Number: NO. 3:20-cv-1085-J-34PDB,3:20-cv-1085-J-34PDB
• Citation: Owens v. Easy Store-It, Inc., NO. 3:20-cv-1085-J-34PDB (M.D. Fla. Dec 09, 2020)
• Parties: JACK OWENS AND KATHY OWENS, Plaintiffs, v. EASY STORE-IT, INC., ETC., Defendants.

JACK OWENS AND KATHY OWENS, Plaintiffs, v. EASY STORE-IT, INC., ETC., Defendants.

NO. 3:20-cv-1085-J-34PDB

United States District Court Middle District of Florida Jacksonville Division

December 9, 2020

Report and Recommendation

In this action under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201-219, and Florida law, the parties move under Lynn's Food Stores, Inc. v. U.S. by & through U.S. Dep't of Labor, 679 F.2d 1350, 1354 (11th Cir. 1982), for approval of a settlement and dismissal of the action with prejudice. Doc. 8.

Background

Jack and Kathy Owens filed this action in September 2020. Doc. 1. In the complaint, they allege these facts.

The defendants—Easy Store-It, Inc., The Benson Living Trust, and Linda Rae Benson—operate a self-storage and office-rental facility. Doc. 1 ¶ 3. Benson is a supervisor, manager, and owner involved in daily operations. Doc. 1 ¶ 32. She directly supervised the Owenses and decided compensation and work hours. Doc. 1 ¶¶ 32, 33.

The Owenses started working for Easy Store-It and the trust in September 2011, performing "a variety of services related to the operation of a self-storage business." Doc. 1 ¶¶ 23-26. Easy Store-It and the trust maintained no records of daily or weekly hours worked. Doc. 1 ¶¶ 27-30. Jack Owens "was not paid wages, cash-in-hand, by the [d]efendants." Doc. 1 ¶ 31.

The Owenses bring three claims against all defendants: one FLSA claim by Jack Owens for unpaid minimum wages (count I); one Florida-law claim by Jack Owens for unpaid minimum wages (count II); and one FLSA claim by Kathy Owens for unpaid minimum wages (count III). Doc. 1 ¶¶ 35-56. They seek unpaid wages, liquidated damages, attorney's fees, costs, and post-judgment interest. Doc. 1 ¶¶ 41, 56. For the Florida-law claim, Jack Owens also seeks a declaration that the defendants violated Florida law and prejudgment interest. Doc. 1 ¶ 48.

The complaint includes these statements: "[T]he defendants regularly owned and operated a business enterprise, respectively, engaged in commerce or in the production of goods for commerce as defined in §3(r) and 3(s) of the FLSA, 29 U.S.C. §203(r) and 203(s)," Doc. 1 ¶ 4; Easy Store-It and the trust were covered enterprises under the FLSA, Doc. 1 ¶¶ 5, 6; the Owenses regularly handled goods or materials moved in interstate commerce and manufactured outside of Florida, including office supplies, telephones, and "other materials necessary for the operation/cleaning of self-storage units," Doc. 1 ¶ 7; the Owenses are individually covered under the FLSA because they regularly used instrumentalities of interstate commerce, "particularly as to persons outside the State of Florida," Doc. 1 ¶¶ 9, 10; Easy Store-It and the trust operate "as a single, unified enterprise," Doc. 1 ¶ 15; Easy Store-It and the trust were employers, Doc. 1 ¶¶ 17, 18; and Benson "is personally liable for" wage violations, Doc. 1 ¶ 32.

In October 2020, the defendants moved to dismiss the complaint. Doc. 7. Relying on an affidavit from Benson and other evidence, they contend that the FLSA does not apply because there is no enterprise coverage (no annual gross sales of at least $500,000) and no individual coverage (the Owenses engaged in no interstate commerce). Doc. 7. They further contend that without the FLSA claims, there is no supplemental jurisdiction for the Florida-law claim.¹ Doc. 7 at 2.

The defendants explain Benson became the sole owner of Easy Store-It after her husband died in July 2019. Doc. 7 at 3. Benson and the trust own the property on which the headquarters for Easy Store-It sits. Doc. 7 at 3. Benson is the sole trustee and beneficiary of the trust. Doc. 7 at 3. The trust has no business operations or employees. Doc. 7 at 3. The Owenses do not allege Easy Store-It had annual gross sales of more than $500,000, and between 2015 and 2019, annual gross sales never exceeded $201,693. Doc. 7 at 4-5. Jack Owens contracted to provide general building and ground maintenance services that involved no regular use of telephone, mail, or travel outside Florida. Doc. 7 at 5. Kathy Owens contracted to serve as an office manager and her duties—greeting customers, recording payments, answering the telephone, taking inventory—involved no travel outside Florida or the regular use of telephone or mail for communication with others outside Florida. Doc. 7 at 5.

The same month, before a response to, and a ruling on, the motion to dismiss, the parties filed the current motion for approval of a settlement. Doc. 8.

Motion

The parties explain the Owenses worked as "on-site, live-in, property managers for the [d]efendants' self-storage warehouse business." Doc. 8 at 1. The Owenses contend they were not paid minimum wage based on the hours worked and the fact they had to pay to live in an apartment on the defendants' property. Doc. 8 at 1-2. The defendants "vehemently" dispute any wage violation. Doc. 8 at 2.

The parties explain that they have agreed to resolve the dispute because of many factual disputes, including: whether the defendants are a covered enterprise under the FLSA considering their annual gross sales; whether the Owenses are individually covered under the FLSA by engaging in interstate commerce; whether Benson is individually liable as an employer; whether the Owenses are entitled to liquidated damages; whether the trust is an employer; whether Easy Store-It and the trust operate as a unified enterprise; whether the defendants kept appropriate records; whether any FLSA violation was willful; the number of hours the Owenses worked; whether the defendants' recordkeeping complies with the FLSA; and whether the defendants retaliated against the Owenses. Doc. 8 at 2-3. Regarding retaliation, the parties explain that the settlement includes resolution of a contemplated amendment to the complaint to add retaliation claims under the FLSA and Florida law. Doc. 8 at 3. (The basis for the claims is not stated, but the parties explain the Owenses still worked for the defendants when counsel sent pre-suit demand letters. Doc. 8 at 3.) The parties add that settlement is appropriate given the risks of continued litigation during a pandemic. Doc. 8 at 3.

The parties explain that the defendants agree to pay $34,155: $7300 in attorney's fees and costs, separately negotiated from the amounts to the Owenses and considering "extensive pre-suit negotiations"; $4500 to Jack Owens in wages plus anequal amount in liquidated damages; $2655 to Jack Owens in exchange for a release from any retaliation claim under the FLSA or Florida law; $4500 to Kathy Owens in wages plus an equal amount in liquidated damages; and $6200 to Kathy Owens in exchange for a release from any retaliation claim under the FLSA or Florida law. Doc. 8 at 3-4.

The parties contend that settlement is appropriate because of the factual issues and the defendants' financial resources. Doc. 8 at 4. The parties observe that if the Court grants the defendants' motion to dismiss, the Owenses would be entitled to nothing. Doc. 8 at 4. The parties assert that they have made good-faith arguments and have reached a fair and reasonable resolution of bona fide disputes. Doc. 8 at 4. The parties state that the settlement accounts for the uncertainty of trial and other factors, including the probability of success, the range of recovery, and the attorneys' opinions. Doc. 8 at 4. The parties ask the Court to approve the settlement and dismiss the action with prejudice. Doc. 8 at 4.

Agreement

The agreement includes introductory recitals, including that the Owenses believe the defendants retaliated against them after the filing of this action; that the defendants deny any wrongdoing and agree to the settlement because of the expense of litigation, length of time to resolve the action, inconvenience, and disruption to business operations; that the Owenses are competent to enter into the agreement, have had a reasonable amount of time to consider it, and enter into the agreement knowingly and voluntarily; and that the parties agree the settlement is fair and in the best interest of all parties. Doc. 8-1 at 1.

The agreement, Doc. 8-1, includes: a provision stating that the defendants will pay $34,155 (as described above) at certain times and the parties separately negotiated the attorney's fees, ¶ 2; a provision that the Owenses agree to release the defendants from FLSA and other claims regarding the payment of wages orretaliation, ¶ 3; a provision about the timing and content of a joint motion to dismiss this action, ¶ 4; provisions about the entirety of the agreement, severability, and modification, ¶¶ 5-7; a provision about attorney's fees in an action to enforce the agreement, ¶ 8; a provision that the Owenses enter into the agreement knowingly and voluntarily, ¶ 9; provisions about a binding agreement and construction, ¶¶ 10-11; a provision that Florida law should govern the agreement, ¶ 12;² and provisions about caption constructions and counterpart originals, ¶¶ 13-14.

Authority

Passed in 1938, the FLSA establishes minimum wages and maximum hours "to protect certain groups of the population from substandard wages and excessive hours which endanger[ ] the national health and well-being and the free flow of goods in interstate commerce." Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697, 706 (1945).

If an employee proves his employer violated the FLSA, the employer must pay him unpaid wages (for up to two years or three if the employer intentionally violated the law, McLaughlin v. Richland Shoe Co., 486 U.S. 128, 135 (1988)), an equal amount as liquidated damages (absent the employer's proof of good faith and reasonable grounds for believing it was not violating the FLSA, 29 U.S.C. § 260), and attorney's fees and costs. 29 U.S.C. § 216(b).

To foster the FLSA's purpose and to prevent an employer from using its superior bargaining position to take advantage of an employee, the Eleventh Circuit, in Lynn's Food Stores, Inc. v. U.S. by & through U.S. Dep't of Labor, 679...