GREGORY J. KELLY, Magistrate Judge.
This cause came on for consideration without oral argument on the following motion filed herein:
On April 14, 2017, Plaintiff filed a complaint against Defendant alleging unpaid overtime under the Fair Labor Standards Act (the "FLSA"), 29 U.S.C. § 201 et seq.
In Lynn's Food Stores, Inc. v. United States Department of Labor, 679 F.2d 1350, 1352-53 (11th Cir. 1982), the Eleventh Circuit addressed the means by which an FLSA settlement may become final and enforceable:
Thus, unless the parties have the Secretary of Labor supervise the payment of unpaid wages owed or obtain the Court's approval of the settlement agreement, the parties' agreement is unenforceable. Id. Before approving an FLSA settlement, the Court must scrutinize it to determine if it is a fair and reasonable resolution of a bona fide dispute. Id. at 1354-55. If the settlement reflects a reasonable compromise over issues that are actually in dispute, the Court may approve the settlement. Id. at 1354.
In determining whether the settlement is fair and reasonable, the Court should consider the following factors:
See Leverso v. SouthTrust Bank of Ala., Nat'l Assoc., 18 F.3d 1527, 1531 n.6 (11th Cir. 1994); Hamilton v. Frito-Lay, Inc., No. 6:05-cv-592-Orl-22JGG, 2007 WL 328792, at *2 (M.D. Fla. Jan. 8, 2007), report and recommendation adopted, 2007 WL 219981 (M.D. Fla. Jan. 26, 2007). The Court should be mindful of the strong presumption in favor of finding a settlement fair. See Cotton v. Hinton, 559 F.2d 1326, 1331 (5th Cir. 1977).
In FLSA cases, the Eleventh Circuit has questioned the validity of contingency fee agreements. Silva v. Miller, 307 F. App'x 349, 351 (11th Cir. 2009) (citing Skidmore v. John J. Casale, Inc., 160 F.2d 527, 531 (2d Cir. 1947) ("We have considerable doubt as to the validity of the contingent fee agreement; for it may well be that Congress intended that an employee's recovery should be net")). In Silva, the Eleventh Circuit held:
Id. at 351-52.
An alternate means of demonstrating the reasonableness of attorney fees and costs was set forth in Bonetti v. Embarq Mgmt. Co., 715 F.Supp.2d 1222 (M.D. Fla. 2009). In Bonetti, the Honorable Gregory A. Presnell held:
Id. at 1228 (emphasis added). Judge Presnell maintained that if the matter of attorney fees is "addressed independently and seriatim, there is no reason to assume that the lawyer's fee has influenced the reasonableness of the plaintiff's settlement." Id. The undersigned finds Judge Presnell's reasoning persuasive.
In the Motion, Plaintiff claims $7,618.80 in unpaid overtime compensation. Doc. No. 31 at 3. The Agreement provides that Plaintiff will receive $4,500 for settling his FLSA claim. Doc. No. 31-1 at 2. Since Plaintiff is receiving less than the amount claimed, Plaintiff has compromised his FLSA claim. Caseres v. Texas de Brazil (Orlando) Corp., No. 6:13-cv-1001-Orl-37KRS, 2014 WL 12617465, at *2 (M.D. Fla. April. 2, 2014) ("Because [plaintiff] will receive under the settlement agreement less than she averred she was owed under the FLSA, she has compromised her claim within the meaning of Lynn's Food Stores").
This case involves disputed issues of FLSA liability, which constitutes a bona fide dispute. Doc. No. 31 at 1-2, 5. Mindful of the uncertainty, costs, and risks associated with continued litigation, the parties decided to amicably resolve their dispute. Id. at 7. The parties were represented by experienced counsel during the settlement negotiations. Id. at 6. Considering the foregoing, along with the strong presumption favoring settlement, it is recommended that the Court find the settlement amount to be fair and reasonable.
The Agreement contains a release provision that releases Defendant "from any causes of action that the Plaintiff may have as alleged [in this case] arising under the FLSA or any other wage law/statute either federal or state." Doc. No. 31-1 at 3. This Court has required separate consideration for releases, but only when such releases are broad, general, or not limited to certain claims. See Moreno v. Regions Bank, 729 F.Supp.2d 1346, 1351-52 (M.D. Fla. 2010); Middleton v. Sonic Brands L.L.C., Case No. 6:13-cv-386-Orl-28KRS, 2013 WL 4854767, at *3 (M.D. Fla. Sept. 10, 2013) (approving a settlement agreement providing $100 as separate consideration for a general release). Here, the release provision is limited to any causes of action that Plaintiff may have alleged in this case that arises under the FLSA or any other federal or state wage law. Doc. No. 31-1 at 3. Because of the Agreement's limited release, no separate consideration is required. Accordingly, it is recommended that the Court find the Agreement's release provision to be fair and reasonable.
The Agreement also contains a provision in which the parties agree "not to make disparaging comments about the other, and not to comment upon or discuss further the matters contained in this Agreement." Doc. No. 31-1 at 5. The provision also states that "Plaintiff warrants that he . . . will not further disclose, communicate, disseminate and/or publicize . . . the existence of [the] terms and conditions of this Agreement . . ." Id. Courts within this District have questioned the propriety of non-disparagement and non-disclosure provisions on the fairness and reasonableness of an FLSA settlement. See Pariente v. CLC Resorts and Developments, Inc., No. 6:14-cv-615-Orl-37TBS, 2014 WL 6389756, at *5 (M.D. Fla. Oct. 24, 2014) (finding that nondisclosure provisions in FLSA settlement agreements "thwart...Congress's intent to ensure widespread compliance with the FLSA") (internal quotations omitted); Weldon v. Backwoods Steakhouse, Inc., No. 6:14-cv-79-Orl-37TBS, 2014 WL 4385593, at *4 (M.D. Fla. Sept. 4, 2014) (noting that non-disparagement clauses are generally rejected in FLSA settlement agreements and citing authority). Nevertheless, courts have approved such provisions when separate consideration is given. See Smith v. Aramark Corp., Case No. 6:14-cv-409-Orl-22KRS, 2014 WL 5690488, at *3-4 (M.D. Fla. Nov. 4, 2014) (approving FLSA settlement providing separate consideration for a confidentiality and non-disparagement clauses); Caamal v. Shelter Mortg. Co., LLC, Case No. 6:13-cv-706-Orl-36KRS, 2013 WL 5421955, at *4 (M.D. Fla. Sept. 26, 2013) (approving FLSA settlement providing $500 as separate consideration for a non-disparagement clause).
The Motion and the Agreement do not state that separate consideration was given for the Agreement's non-disparagement and non-disclosure provision. Doc. Nos. 31, 31-1. Furthermore, the Motion does not address why the non-disparagement and non-disclosure provision was included in the Agreement. Doc. No. 31. Because of a severability clause, the non-disparagement and non-disclosure provision is not fatal to the Agreement. Doc. No. 31-1 at 5. Accordingly, it is recommended that the Court strike the non-disparagement and non-disclosure provision pursuant to the Agreement's severability clause.
The Agreement contains a future employment waiver. Doc. No. 31-1 at 6. The undersigned finds that future employment waivers are different from general releases, in that Plaintiff, as a former employee of Defendant, knows exactly what he is relinquishing when he agrees not to seek future employment with Defendant. After reviewing the Agreement, there is no indication that the future employment waiver undermines the Agreement's fairness. Accordingly, it is recommended that the Court find the future employment waiver to be fair and reasonable.
Under the Agreement, Plaintiff's counsel will receive $2,500 for fees and costs. Doc. No. 31-1 at 2. The parties represent that "Plaintiff's attorneys' fees and costs were negotiated separately from the amounts claimed . . ." Doc. No. 31 at 7. Such a representation adequately establishes that the issue of attorneys' fees and costs was agreed upon without regard to the amount paid to Plaintiff. See Bonetti, 715 F. Supp. 2d at 1228. Accordingly, pursuant to Bonetti, it is recommended that the Court find the Agreement's attorneys' fee provision to be fair and reasonable.
Based on the foregoing, it is
A party has fourteen days from this date to file written objections to the Report and Recommendation's factual findings and legal conclusions. A party's failure to file written objections waives that party's right to challenge on appeal any unobjected-to factual finding or legal conclusion the district judge adopts from the Report and Recommendation. 11th Cir. R. 3-1.