White v. Northstar Media, Inc.

Background

Alanea White worked as an editor for Northstar Media, Inc. from June 2019 through December 2021 and also provided editorial services for the company’s online news services. White alleged that Northstar improperly classified her as exempt under the Fair Labor Standards Act (FLSA). She claimed unpaid overtime and alleged that she was paid less than the minimum weekly salary required for exempt employees. Northstar disputed whether the FLSA covered White and whether her claimed overtime was compensable; it also argued that its policies prohibited her from working more than 40 hours per week.

Settlement and Earlier Motion

The parties agreed to settle the case for a total payment of $20,537. The settlement provided for $6,000 in gross back wages, subject to specified tax and other deductions; $6,000 in liquidated damages; and $8,537 in attorneys’ fees and costs, consisting of $8,000 in fees and $537 in costs. The parties first sought approval of the settlement, but the court denied that motion without prejudice and requested information about whether the attorneys’ fees were negotiated separately and, if not, whether they were reasonable. The parties then submitted additional information and renewed their joint motion.

Court’s Analysis

The court assumed, without deciding, that judicial approval of the FLSA settlement was required. It found that the settlement involved a bona fide dispute, meaning a genuine disagreement about liability or the wages owed. The court also found the settlement fair and equitable because the parties exchanged enough information to evaluate the claims, White had experienced counsel, the negotiations were conducted at arm’s length, and there was no evidence that Northstar overreached. Excluding attorneys’ fees, White would receive more than $12,000, which the court viewed as a reasonable compromise in light of the uncertainty of success.

Because the attorneys’ fees were not separately negotiated, the court reviewed them for reasonableness using the lodestar method, which multiplies reasonable hours by a reasonable hourly rate. White’s attorney reported 60.2 hours at $370 per hour, producing a $22,274 lodestar. The $8,000 fee represented a 64.1% reduction from that amount and was also consistent with White’s representation agreement. The court therefore found the fees and costs reasonable.

Disposition

Judge Katherine Menendez granted the parties’ renewed joint motion for settlement approval. The court also ordered that the matter be dismissed with prejudice and directed that judgment be entered accordingly.