1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 DANA DAHL, Case No. 20-cv-07062-HSG

8 Plaintiff, ORDER GRANTING MOTION FOR

APPROVAL OF FLSA COLLECTIVE

9 v. ACTION SETTLEMENT

10 BAY POWER INC., et al., Re: Dkt. No. 35 11 Defendants.

12 13 Pending before the Court is the parties’ joint motion for approval of FLSA collective 14 action settlement. Dkt. No. 35 (“Mot.”). The Court held a hearing on the motion on May 27, 15 2021. For the following reasons, the Court GRANTS the motion for settlement approval. 16 I. BACKGROUND 17 Plaintiff Dana Dahl (“Plaintiff” or “Named Plaintiff”) was an employee of Defendants and 18 worked as an Inside Sales Representative for Defendants’ business, which primarily sold 19 electronic components. Dkt. No. 33 at 2. Plaintiff brought this action as a collective action under 20 the Fair Labor Standards Act (“FLSA”) on behalf of herself and all other current and former non- 21 exempt Inside Sales Representatives who earned a commission or non-discretionary bonus in 22 connection with work performed for the Defendants in any week in which they worked more than 23 forty hours at any time since October 9, 2017. Id. Plaintiff alleges that Defendants failed to pay 24 her and other Inside Sales Representatives the overtime compensation required by the FLSA. Dkt. 25 No. 1. There are 18 potential opt-in plaintiffs in addition to Named Plaintiff (“Opt-In Plaintiffs”). 26 Mot. at 4. The parties agreed that conditional certification of a collective action under the FLSA is 27 appropriate. Dkt. No. 33 at 2. 1 II. LEGAL STANDARD 2 The FLSA requires employers to pay their employees time and one-half for work 3 exceeding forty hours per week. See 29 U.S.C. § 207(a)(1). Most courts hold that an employee’s 4 overtime claim under FLSA is non-waivable, and therefore cannot be settled without the 5 supervision of either the Secretary of Labor or a district court. See Lynn’s Food Stores, Inc. v. 6 United States, 679 F.2d 1350, 1352-55 (11th Cir. 1982); Till v. Saks Inc., No. C 12-03903, 2014 7 WL 1230604, at *2 (N.D. Cal. Mar. 14, 2014); see also Otey v. CrowdFlower, Inc., No. 12-cv- 8 05524, 2014 WL 1477630, at *3 & n.5 (N.D. Cal. Apr. 15, 2014) (“Otey I”) (collecting cases 9 applying Lynn’s Food Stores). 10 “The Ninth Circuit has not established the criteria that a district court must consider in 11 determining whether an FLSA settlement warrants approval.” Otey v. CrowdFlower, Inc., No. 12- 12 cv-05524, 2015 WL 6091741, at *4 (N.D. Cal. Oct. 16, 2015) (“Otey II”). For that reason, courts 13 in this district apply the Eleventh Circuit’s widely-followed standard set forth in Lynn’s Food 14 Stores and consider whether the proposed settlement constitutes “a fair and reasonable resolution 15 of a bona fide dispute over FLSA provisions.” Id. (quoting 679 F.2d at 1355). “If a settlement in 16 an employee FLSA suit does reflect a reasonable compromise over issues . . . that are actually in 17 dispute,” the district court may approve the settlement. Lynn’s Food Stores, 679 F.2d at 1354. 18 III. DISCUSSION 19 The settlement in this case includes the following terms. Defendants have agreed to pay 20 every Opt-In Plaintiff who timely joins the settlement pursuant to the notice procedures the 21 amount set forth in Exhibit A to the settlement agreement (“Agreement”). Mot. at 4. Defendants 22 provided time and payroll data regarding Inside Sales Representatives during the relevant period, 23 and the alleged underpayment of overtime wages was calculated based on this available data. Id. 24 The calculations take into account the hours worked by Plaintiffs, as well as their pay and bonuses 25 received, and the allocated amounts are equal to 100% of damages calculated for failure to include 26 non-discretionary bonuses and commissions in the regular rate of pay prior to calculating overtime 27 pay, including liquidated damages. Id. If each Opt-In Plaintiff timely submits a consent form, the 1 $500.00 service award to Named Plaintiff. The Opt-in Plaintiffs, by executing a consent form, 2 provide the following release:

3 [E]ach Opt-In Plaintiff fully releases and discharges Defendants and each of their past, present and future owners, parent corporations, 4 related or affiliate companies, subsidiaries, officers, directors, employees, representatives, insurers, agents and any individual or 5 entity which could be jointly liable with Defendants (the “Released Parties”) from any and all claims, debts, penalties, liabilities, 6 demands, obligations, guarantees, expenses, damages, actions or causes of action of whatever kind or nature, whether known or 7 unknown, that were alleged or that reasonably arise out of the acts alleged in the Lawsuit, which includes all wage and hour claims under 8 the Fair Labor Standards Act and similar state and municipal laws governing lost wages, and including associated liquidated damages, 9 interest, and penalty claims that were asserted or could have been asserted between October 9, 2017 and October 9, 2020. Opt-In 10 Plaintiffs do not release any claim wholly unrelated to the wage and hour subject matter, specifically including those covered by workers’ 11 compensation, unemployment compensation or discrimination law, or any other claims that cannot be released by law. 12 Mot. at 4. 13 In order to approve the settlement, the Court must find that (1) the case involves a bona 14 fide dispute, (2) the proposed settlement agreement is fair and reasonable, and (3) the award of 15 costs is reasonable. 16 A. Bona Fide Dispute 17 “If a settlement in an employee FLSA suit does reflect a reasonable compromise over 18 issues, such as FLSA coverage or computation of back wages, that are actually in dispute[,] . . . 19 the district court [may] approve the settlement in order to promote the policy of encouraging 20 settlement of litigation.” Nen Thio v. Genji, LLC, 14 F. Supp. 3d 1324, 1333 (N.D. Cal. 2014) 21 (quoting Yue Zhou v. Wang's Restaurant, 2007 WL 2298046, *1 (N.D. Cal. Aug. 8, 2007)); Lynn’s 22 Food Stores, 679 F.2d at 1353 n.8 (requiring “settlement of a bona fide dispute between the parties 23 with respect to coverage or amount due under the [FLSA]”). “The purpose of this analysis is to 24 ensure that an employee does not waive claims for wages, overtime compensation, or liquidated 25 damages when no actual dispute exists between the parties.” Saleh v. Valbin Corp., No. 17-CV- 26 00593-LHK, 2018 WL 6002320, at *2 (N.D. Cal. Nov. 15, 2018) (citing Lynn’s Food Stores, 679 27 F.2d at 1353 n.8.). 1 of failure to pay proper overtime wages, and assert a number of affirmative defenses, including 2 application of the statute of limitations and good faith. See Dkt. No. 11 at 8-9; Mot. at 5. 3 Although there the parties reached a swift resolution of this case and did not engage in 4 motions practice to test either Plaintiff’s allegations or Defendants’ defenses, the Court notes the 5 adversarial nature of the litigation and the uncertainly of Plaintiff being able to recover all 6 damages, including liquidated damages, if the case proceeds. See Local 246 Util. Workers Union 7 of Am. v. S. California Edison Co., 83 F.3d 292, 297 (9th Cir. 1996) (noting that an employer can 8 avoid liquidated damages if it can establish “subjective and objective good faith in its violation of 9 the FLSA.”). Based on the disputed aspects of the case, the Court finds there to be a bona fide 10 dispute under the FLSA. 11 B. Fair and Reasonable Resolution 12 “To determine whether the settlement is fair and reasonable, the Court looks to the ‘totality 13 of the circumstances’ and the ‘purposes of FLSA.’” Saleh, 2018 WL 6002320 at *3 (quoting Selk 14 v. Pioneers Mem’l Healthcare Dist., 159 F. Supp. 3d 1164, 1173 (S.D. Cal. 2016)). Here, the 15 settlement provides for 100% of calculated damages for Plaintiff and Opt-In Plaintiffs, including 16 liquidated damages, which weighs heavily in favor of the settlement and alleviates concerns about 17 fraud or collusion. Further, the release clause is limited to those claims that could “reasonably 18 arise out of the acts alleged in the Lawsuit” and is not overly broad as it does not release claims 19 unrelated to the wage-and-hour subject matter. See Reyn’s Pasta Bella, LLC v. Visa USA, Inc., 20 442 F.3d 741, 748 (9th Cir. 2006) (“[A] federal court may release not only those claims alleged in 21 the complaint, but also a claim ‘based on the identical factual predicate as that underlying the 22 claims in the settled class action.’”). 23 Overall, considering the totality of the circumstances, the Court finds that the proposed 24 settlement is a fair and reasonable resolution of a bona fide dispute. 25 C. Attorneys’ Fees and Costs 26 The FLSA contains a mandatory fee– and cost-shifting provision. 29 U.S.C. § 27 216(b) (“The court in such action shall, in addition to any judgment awarded to the plaintiff or 1 action”); accord Dent v. Cox Comms. Las Vegas, Inc., 502 F.3d 1141, 1143 (9th Cir. 2007). 2 Because settlement of a FLSA claim results in a stipulated judgment (at least when in district 3 court), Lynn’s Food Stores, 679 F.2d at 1354, this provision applies even where parties settle an 4 individual action, Yue Zhou, 2007 WL 2298046 at *1. 5 Under the terms of the Agreement, Plaintiff’s Counsel is receiving $30,233.39. Mot. at 6. 6 This represents approximately 60% of the $49,000 in billed hours and costs incurred by Plaintiff’s 7 Counsel. Id. This amount was a separate line item in settlement negotiations and was over and 8 above the amount of damages owed to Plaintiffs. Id. Because Plaintiffs are receiving 100% of 9 their calculated damages, the negotiated attorney’s fee does not reduce the award to any Plaintiff. 10 Id; see Barbee v. Big River Steel, LLC, 927 F. 3d 1024, 1027 (8th Cir. 2019) (“When the parties 11 negotiate the reasonable fee amount separately and without regard to the plaintiff's FLSA claim, 12 the amount the employer pays to the employees’ counsel has no bearing on whether the employer 13 has adequately paid its employees in a settlement.” (citations omitted)).1 14 The Court finds that the agreed-upon fees and costs amount is reasonable. 15 IV. CONCLUSION 16 For the foregoing reasons, the Court GRANTS the parties’ joint motion for settlement 17 approval. The Court further: 18 1. DIRECTS the parties to perform their obligations in accordance with the terms of the 19 settlement agreement and notice procedure; 20 2. APPOINTS Plaintiffs’ counsel as collective-action counsel; 21 3. CONDITIONALLY CERTIFIES a collective of “All non-exempt Inside Sales 22 Representatives who were employed by Bay Power, Inc., and/or Donna Butcher at any time 23 between October 9, 2017 and October 9, 2020”; 24 4. APPROVES the Settlement Notice and Consent to Join Settlement forms to be sent to 25 Plaintiff and Potential Opt-In Plaintiffs, attached as Exhibits 2 and 3 to the Motion; 26

27 1 The Court notes that it is not adopting Plaintiff’s position that it is unnecessary for the Court to 1 5. APPROVES the parties’ proposed Notice Period and procedure for submission of 2 Consent to Join forms; and 3 6. DIRECTS the parties to submit a status report within 30 days of the end of the Notice 4 || Period, indicating that payments under the Settlement Agreement and Release have been tendered. 5 Simultaneously with that status report, the parties are DIRECTED to submit a stipulated 6 || judgment and dismissal. 7 IT IS SO ORDERED. 8 || Dated: 5/28/2021

won S. GILLIAM, JR. / 2 10 United States District Judge 11 12

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