United States District Court, E.D. Kentucky, Southern Division, London
MEMORANDUM OPINION AND ORDER
C. REEVES UNITED STATES DISTRICT JUDGE
parties have reached a proposed settlement of Plaintiff
Southerland's claims in this matter, which arise under
the Fair Labor Standards Act (“FLSA”), 28 U.S.C.
§ 207(a). [Record No. 24] One matter remains, however:
settlements involving FLSA claims must be approved by the
Court. See Lynn's Food Stores v. United States,
679 F.2d 1350, 1355 (11th Cir. 1982). The parties previously
sought approval of their agreement on September 5, 2018, but
that requelst was denied because the parties had not provide
sufficient information to allow the Court to determine
whether the agreement represented a fair and reasonable
resolution of a bona fide dispute. See Id. at 1355.
[Record Nos. 22, 26] The Court now considers the parties'
second joint motion for approval of their settlement
agreement. [Record No. 27');">27]
policy requires that employees' rights under the FLSA not
be compromised by settlement. Crawford v.
Lexington-Fayette Urban Cnty. Gov., No. 06-299, 2008 WL
4724499 (E.D. Ky. Oct. 23, 2008). As a result, the Court must
address the threshold question of whether the parties'
proposed settlement involves bona fide dispute regarding the
nature or existence of such rights. The plaintiff alleges
that the defendant failed to compensate him as required under
FLSA for overtime worked during his employment from January
2014 through March 2017. [Record No. 1] Employees are
afforded FLSA's protections, while independent
contractors are not. See Keller v. Miri Microsystems
LLC, 781 F.3d 799, 806 (6th Cir. 2015).
Supreme Court has recognized that employers are liable to
employees for overtime wages, even if the employer puts an
“independent contractor label” on the employee.
Id. at 806-07 (quoting Rutherford Food Corp. v.
McComb, 331 U.S. 722, 729 (1947)). The United States
Court of Appeals for the Sixth Circuit applies a common law
agency test to determine whether a hired party is an
independent contractor or an employee. Shah v. Deaconess
Hosp., 355 F.3d 496, 499 (6th Cir. 2004) (citing
Nationwide Mutual Ins. Co. v. Darden, 503 U.S. 318,
322 (1992)). See also Keller, 781 F.3d at 807
(citing Donovan v. Brandel, 736 F.2d 1114, 1116 (6th
Cir. 1984) (describing the substantively similar
consider the following factors:
the hiring party's right to control the manner and means
by which the product is accomplished; the skill required by
the hired party; the duration of the relationship between the
parties; the hiring party's right to assign additional
projects; the hired party's discretion over when and how
to work; the method of payment; the hired party's role in
hiring and paying assistants; whether the work is part of the
hiring party's regular business; and hired party's
employee benefits; and the tax treatment of the hired
Shah, 355 F.3d at 443 (citing Darden, 503
U.S. as 323-24). While the parties' entry into an express
“independent contractor” agreement is not
dispositive, it is some evidence of the relationship that the
parties intend to create. See Weary v. Cochran, 377
F.3d 522, 525-56 (6th Cir. 2004).
maintains that he was the defendant's employee because he
consistently worked for the defendant 75 to 80 hours per
week; his job required specialized knowledge, but not much
skill or initiative; the defendant provided the necessary
materials (other than a vehicle); he had no control over his
own profit or loss, and received hourly compensation; and
supervisors exercised extensive control over his work hours
and job duties. [Record No. 27');">27, p. 4] The defendant, on the
other hand, contends that Southerland was an independent
contractor prior to January 1, 2017, because he signed an
independent contractor agreement; he could work as many or as
few hours as he desired; he was not restricted from providing
services to other companies; and he had no supervisor during
the relevant period. Id. at 5.
factor is determinative. It is notable, however, that with
respect to the core issue of control, Southerland argues that
the defendant exercised significant control over his job
duties, while the defendant maintains that Southerland did
not have a direct supervisor during the relevant period.
See Werner v. Bell Family Med. Ctr., Inc., 529
Fed.Appx. 541 (6th Cir. 2013) (acknowledging that right to
control manner and means of work is a key consideration). And
despite the parties' express agreement that Southerland
was an independent contractor, other factors, such as the
defendant's provision of materials, suggest that
Southerland was an employee.
parties have established sufficiently that Southerland's
true employment status is in dispute. Thus, they have
demonstrated that a bona fide dispute exists. See e.g.,
Ross v. Jack Rabbit Servs., LLC, No. 3: 14-cv-44-DJH,
2016 WL 7320890, at *2 (W.D. Ky. Dec. 15, 2016).
Court also must determine whether the proposed settlement is
fair. Southerland's Complaint seeks unpaid overtime wages
from January 21, 2014, through March 13, 2017, as well as
liquidated damages. [Record No. 1, p. 3-4] His regular pay
rate was $14.00 per hour, and he contends that he is due $19,
721.94 in back pay wages for the two-year period preceding
the filing of this suit. [Record No. 27');">27, p. 4] The defendant
acknowledges that if the lawsuit continues, and the plaintiff
if successful, he could recover “approximately $36,
000.00 in back pay and liquidated damages alone.”
Id. at 5.
proposed settlement agreement awards Southerland a total of
$33, 000.00, $15, 999.06 of which will be payable to
Southerland's attorney. The $17, 000.94 payable to
Southerland approaches the amount he originally sought for
unpaid overtime wages. Liquidated damages are available in
cases of willful violations of the FLSA, which extend the
statute of limitations to three years. 29 U.S.C. §§
216(b), 255(a). The defendant maintains (based on the
good-faith disagreement regarding Southerland's
employment status) that any alleged violation of the FLSA was
not willful. Given the uncertainty and expense of ...