United States District Court, W.D. Wisconsin
WILLIAM M. CONLEY DISTRICT JUDGE.
their complaint, plaintiffs Martha Hernandez and Yolanda Cole
assert claims on behalf of themselves and similarly situated
employees for violations of the Fair Labor Standards Act, 29
U.S.C. § 201 et seq., and Wisconsin state law
against defendants Cameo Investments, LLC, Cameo Investments
II, LLC, which both operate under the business Centerfolds
Cabaret. Specifically, plaintiffs allege that
defendants failed to pay them minimum wage as required under
the FLSA and Wisconsin law and also fined them in violation
of Wisconsin law. (Compl. (dkt. #1).) After defendants answered
and filed a counterclaim but before the court even held a
preliminary pretrial conference, the parties reached a
settlement. Before the court is the parties' joint motion
for settlement. (Dkt. #20.)
settlement only concerns the claims brought by the two
individual plaintiffs, and does not involve any FLSA
collective action or Rule 23 class claims. The settlement
agreement releases all claims, and the parties seek dismissal
of the entire action with prejudice. Still, because the
settlement involves FLSA claims, the parties seek court
avoid a challenge to the validity of a settlement of FLSA
claims, either approval by a court or the Department of Labor
is required. See Walton v. United Consumers Club,
786 F.2d 303, 306 (7th Cir. 1986) (“[T]he Fair Labor
Standards Act is designed to prevent consenting adults from
transaction about minimum wages and overtime pay. Once the
Act makes it impossible to agree on the amount of pay, it is
necessary to ban private settlements of disputes about pay.
Otherwise the parties' ability to settle disputes would
allow them to establish sub-minimum wages.”). In
approving a settlement, the court must determine whether the
settlement's terms and conditions represent “a fair
and reasonable resolution of a bona fide dispute over FLSA
provisions” and reflect a “compromise of disputed
issues [rather] than a mere waiver of statutory rights
brought about by an employer's overreaching.”
Lynn's Food Stores, Inc. v. U.S. Dept. of Labor,
679 F.2d 1350, 1354-55 (11th Cir. 1982).
forth in the joint motion and in the attached settlement
agreement, defendants have agreed to pay a total of $10, 000,
with $2, 500 to plaintiff Hernandez; $1, 000 to plaintiff
Cole; and $6, 500 to plaintiffs' counsel for fees and
costs. The parties disagree as to whether plaintiffs are or
were ever “employees” under the FLSA; whether
they ever performed at defendants' exotic dance club at
any time during the three-year statutory period; and whether
the moneys plaintiffs received from defendants' customers
met or exceeded the minimum wage obligations. After
exchanging discovery, the parties agree that defendants'
records show that plaintiffs performed, at most, a de
minimis number of shifts during the FLSA recovery
period, though plaintiffs identified potential witnesses to
challenge those records. Regardless, it appears that there
are serious questions as to whether plaintiffs qualified as
employees under the FLSA, and, if so, whether they would be
able to demonstrate any significant damages. In light of
these substantial questions, the court agrees with the
parties that the $2, 500 payment to Hernandez and $1, 000
payment to Cole represents “a fair and reasonable
resolution of a bona fide dispute over FLSA provisions”
and reflects a “compromise of disputed issues.”
Lynn's Food Stores, 679 F.2d at 1354-55.
settlement agreement also encompasses payment of $6, 500 in
attorneys' fees and costs. While the court would normally
be troubled by a settlement agreement where 65% of the fund
is allocated for attorneys' fees and costs, here, the
amount of money is so small, that this concern is lessened.
Given the time counsel spent in drafting the complaint,
reviewing discovery, negotiating a settlement and seeking
approval, the court concludes that the amount of negotiated
fees is also fair and reasonable, especially in light of the
limited value of plaintiffs' individual claims.
IT IS ORDERED that:
parties' joint motion for approval of settlement (dkt.
#20) is GRANTED.
claims in this action are DISMISSED WITH PREJUDICE. The
clerks' office is directed to close this case.
 Plaintiffs also named Cameo Family
Investments, LLC, as a defendant, but the court previously
dismissed that defendant based on the parties'
stipulation. (Dkt. ##10, 11.)
 In the joint motion to approve
settlement, the parties include allegations that are not from
this action. (Joint Mot. (dkt. #20) ¶¶ 1-2.) The
court has disregarded those paragraphs, and has instead