Dahl v. Bay Power Inc.

Background

Dana Dahl, an employee who worked as an Inside Sales Representative, brought this Fair Labor Standards Act (FLSA) collective action against Bay Power Inc. and other defendants. She alleged that the defendants failed to pay overtime required by the FLSA to her and other current and former non-exempt Inside Sales Representatives who worked more than 40 hours in a week and earned a commission or non-discretionary bonus. The proposed group covered work performed from October 9, 2017, through October 9, 2020. There were 18 potential opt-in plaintiffs in addition to Dahl, and the parties agreed that conditional certification of an FLSA collective was appropriate.

Legal standard

The court explained that FLSA overtime claims generally cannot be settled without supervision by the Secretary of Labor or a district court. It applied the standard that a settlement must be a fair and reasonable resolution of a genuine dispute about FLSA requirements. The court also considered whether the proposed award of attorney’s fees and costs was reasonable.

Settlement terms and analysis

The defendants agreed to pay each opt-in plaintiff who timely joined the settlement the amount listed in the settlement agreement. The calculations used the defendants’ time and payroll data and accounted for hours worked, pay, and bonuses. The proposed payments equaled 100% of the calculated damages for failing to include non-discretionary bonuses and commissions in the regular rate used to calculate overtime, including liquidated damages.

If the opt-in plaintiffs timely submitted consent forms, the agreement provided Dahl a $500 service award. The release covered wage-and-hour claims under the FLSA and similar state and municipal laws that were alleged or reasonably arose from the acts at issue in the lawsuit, including related liquidated damages, interest, and penalties for the specified period. It did not release unrelated claims, including workers’ compensation, unemployment compensation, or discrimination claims, or claims that could not legally be released.

The court found a bona fide, or genuine, dispute because the defendants disputed the alleged failure to pay proper overtime and asserted defenses including the statute of limitations and good faith. Although the case had been resolved quickly without motions practice testing the allegations or defenses, the court found that the litigation was adversarial and that Dahl’s ability to recover all damages, including liquidated damages, was uncertain.

The court concluded that the settlement was fair and reasonable under the circumstances. It emphasized that the plaintiffs would receive 100% of their calculated damages, including liquidated damages, and that the release was limited to claims reasonably arising from the lawsuit’s wage-and-hour allegations.

Plaintiffs’ counsel was to receive $30,233.39 in fees and costs. The court noted that this represented about 60% of the approximately $49,000 in billed hours and costs, was negotiated as a separate settlement item, and was in addition to the amounts owed to the plaintiffs. The court found the agreed fees and costs reasonable.

Order

Judge Gilliam granted the parties’ joint motion for settlement approval. The court directed the parties to perform their obligations under the settlement agreement and notice procedure; appointed plaintiffs’ counsel as collective-action counsel; and conditionally certified a collective consisting of all non-exempt Inside Sales Representatives employed by Bay Power, Inc., and/or Donna Butcher between October 9, 2017, and October 9, 2020. The court approved the settlement notice and consent forms, approved the proposed notice period and procedure for submitting consent forms, and directed the parties to file a status report within 30 days after the notice period ended. The parties were also directed to submit a stipulated judgment and dismissal with that report.