Where the settlement resolved a genuine dispute over overtime wages and was fair and reasonable, it was accepted.
Rear end
This is a collective action for unpaid overtime wages pursuant to the Fair Labor Standards Act, or FLSA. The parties agreed to settle the matter at a settlement conference with a magistrate judge. Thereafter, the parties submitted a joint motion for consent to the settlement.
Analysis
The court must first determine whether the settlement resolves a factual dispute regarding the violation of the FLSA statute. It does that. The parties disputed whether plaintiffs were entitled to unpaid overtime wages under the FLSA. Disagreements regarding wage rates and entitlement to additional wages may create a genuine dispute as to the defendant’s liability.
By providing evidence of the representation of the parties that they “know the important facts that affect the case and have adequately evaluated the benefits of the settlement and the possible risks of continuing the lawsuit,” the court found that the parties had the opportunity to “correctly assess the responsibilities and aspects of their finances.” [the] case.”
Furthermore, when the parties reached a settlement agreement, the case had been pending for more than six months. The parties said they “have had ample opportunity to review their claims and defenses and to enter into settlement negotiations.” In addition, without resolution, the parties faced “complex, expensive, and protracted” litigation, including “disputes over class discovery” and challenges “on the brevity of certification and verification, liabilities and damages.” The parties acknowledged that “a trial will be a difficult, unpredictable and costly exercise” with risks for both sides – including the risk of “uncertain and unpromising resolution of the disputed issues.”
There is no evidence in the record that the payment agreement was produced by fraud or collusion. Therefore, the court finds that the absence of fraud or collusion also weighs in favor of granting the settlement.
After reviewing their experience and qualifications, the court finds that the plaintiffs’ counsel has the breadth of experience and knowledge necessary to prosecute and resolve this matter in favor of the plaintiffs. Therefore, this point has the meaning of accepting the agreement of the proposed agreement.
Because of the potential defense and risk of plaintiffs’ claims, plaintiffs’ success was not guaranteed. Therefore, this point also has the meaning of accepting the proposed agreement.
Payments
The settlement agreement provides that each eligible claimant will receive an equal share of the $35,000 trust fund, representing 20% of back wages and 80% of liquidated damages. The parties represent that “the decision is now justified by the combination of long-term litigation costs against potential costs.” Based on these submissions, the court is satisfied that the amount of the settlement is reasonable in relation to the plaintiff’s likelihood of recovery.
In addition, the court accepts a just and reasonable payment of a service fee of $500 to each of the two lead plaintiffs in this case. Counsel for the prosecution points out that the lead prosecutors were “active at the start of this case, as well as throughout its successful prosecution,” that they “spent time meeting with counsel, discussing the facts and circumstances of the charges, and engaging in trial strategies” and that “[w]despite their efforts, this case may never have been brought.”
Attorney’s fees
The proposed settlement provides for payment of attorney’s fees in the amount of $24,000. Based on counsel’s experience, rates prevailing in the relevant market and the agreement of the parties, the court finds that counsel’s hourly rates of between $375-$575 are reasonable. The court finds that the consultant has charged enough time in this case according to the time and work spent, the novelty and difficulty of the questions presented, the knowledge required to perform legal services, the experience and reputation of the consultant and the results obtained.
A consolidated FLSA approval proposal has been filed.
Hernandez Chirinos v. Avena Contracting LLC, Case No. 2:25-cv-418, March 23, 2026. EDVA at Norfolk (Walker). VLW 026-3-141. 21 pp.
Full Letter Comments
VLW 026-3-141
Virginia Lawyers Weekly
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