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Hernandez v. Choi

United States District Court, D. Maryland

November 13, 2014

JOSE ANTONIO HERNANDEZ, et al., Plaintiffs,
v.
DANIEL B. CHOI, et al., Defendants.

MEMORANDUM OPINION

THEODORE D. CHUANG, District Judge.

Pending before the Court is the parties' Joint Motion for Approval of Settlement. ECF No. 36. The parties assert that the Court should approve their agreed-upon settlement, consisting of hack wages, liquidated damages, and attorney's fees, resolving the allegations in the Complaint arising under the Fair Labor Standards Act ("FLSA"). 29 U.S.C. § 201 et seq. (2012). The Court has reviewed the Motion and held a hearing by telephone on the Motion on October 30, 2014. See ECF No. 37. For the reasons set forth below, the Motion is GRANTED and the settlement is APPROVED.

BACKGROUND

On November 25, 2010, Plaintiff's Jose Antonio flernandez and Andelino De Leon filed a Complaint against Daniel B. Choi. Pyoung R. Choi, DTI International, Inc. ("DTI"), East Greenhill. Inc., Green World Enterprises. Inc., Metro Greenfield LLC, and All-Seasons Food Corporation (collectively, "Defendants") alleging that, while working for one or inure of the Defendants as grocery clerks at a Bestway Supermarket in Falls Church. Virginia, they had not received overtime pay (one and one-half times their huurly rate) for hours worked in excess of 40 hours per week, in violation of FLSA. Cotnpl. ¶¶ 16-19, ECF No, 1. On April 23, 2014, Hernandez, De Leon, and a third plaintiff, Edgar Domingo Chitay (collectively. "Plaintiffs"), filed an Amended Complaint adding allegations that Chitay had not been paid overtime during his work as a grocery clerk for Defendants at a Bestway Supermarket in Adelphi. Maryland. Am. Compl. ¶¶ 18-27, ECF No. 18. Both the Complaint and the Amended Complaint asserted that the lawsuit was brotieht as a collective action under 29 U.S.C. § 216(b) on behalf of the class of potential litigants who had worked for Defendants without receiving overtime pay. Id. ¶¶ 29-32.

At an Initial Status Conference on June 30. 2014, the parties requested, and the Court agreed, that discovery would proceed in two phases, with a three-month first phase of discovery relating to collective action certification only, to he followed by the filing of a class certification motion. See Revised Scheduling Order, ECF No. 28. The second phase of discovery, relating to all other discovery, would not commence until a decision on the collective action certification question had been made. During the first phase of discovery, Plaintiffs propounded interrogatories and document requests, to which Defendants responded. They also conducted depositions of Defendants Daniel Choi and Pyoung Choi. On September 2, 2014. Defendants filed a Motion the Partial Summary Judgment as to Plaintiff Chitay in which they argued that documentary evidence, specifically biometric timecards and pay ledgers, established that Chitay was properly compensated for his overtime work. Mot. Summ. J. ¶ 3, ECF Nos. 31, 32. Plaintiffs opposed the Motion. ECF No. 33.

On October 3, 2014, after the close of the first phase of discovery, the parties filed, and the Court granted, a Joint Motion to Stay All Deadlines to allow for a period of settlement negotiations. Joint Mot. to Stay, ECF No. 34, 35. On October 21, 2014, the parties tiled a Joint Motion for Approval of Settlement in which, they reported that the parties had conducted settlement discussions beginning on or about August 15. 2014. Joint Mot. Approval Settlement ¶ 14, ECF No. 36. After initial discussions did not lead to a resolution, the parties restarted settlement negotiations on October 8. 2014 and exchanged relevant information. Id. ¶¶ 14-15. The parties then reached a settlement consisting of the following:

1. Hernandez and De Leon would each receive (a) $15, 125.48 in gross wages, minus applicable taxes and deductions: and (b) $15, 125.48 in liquidated damages;
2. Chitay would receive (a) 15.102.90 in gross wages, minus applicable taxes and deductions: and (b) $15.102.90 in liquidated damages;
3. Defendants would pay $90, 000 to Plaintiffs' counsel liar attorney's fees and costs.

Id. ¶ 15.

DISCUSSION

1. Legal Standard

Congress enacted the FLSA to protect workers from substandard wages and oppressive working hours. Barrentine v. Ark-Best Freight Sys., 450 U.S. 728, 739 (1981). Because of the significant inequalities in bargaining power between employers and employees, the statute's provisions are mandatory and generally are not subject to bargaining, waiver, or modification by contract or settlement. See Brooklyn Say. Bank v. O'Weil. 324 U.S. 697. 706 (1945). A court approved stipulated judgment or settlement is an exception to that rule. See D.A. Schulte, Inc. v. Gangi. 328 U.S. 108. 113 n.8 (1946); Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350. 1355 (11th Cir. 1982). Such a settlement may be approved provided that it reflects a "reasonable compromise of disputed issues" rather than "a mere waiver of statutory rights brought about by an employer's overreaching." Lynn's Food Stores, 679 F.2d at 1354: accord Samoa v. LBDP. Inc., No. DKC-12-1083. 2013 WL 2949047, at *2 (D. Md. June 13, 2013).

Although the United States Court of Appeals for the Fourth Circuit has not specifically identified the factors to be considered in approving FLSA settlements, district courts in this circuit typically employ the considerations set forth by the United States Court of Appeals for the Eleventh Circuit in Lynn's Food Stores. See, e.g., Lopez v. NTI. LLC, 748 F.Supp.2d 471, 478 (D. Md. 2010); see also Saman, 2013 WL 2949047 at *3: Hoffman v. First Student. Inc., No. WDQ-06-1882, 2010 WL 1176641, at *2 (D. Md. Mar. 23. 2010). An FLSA settlement generally should be approved if it reflects "a fair and reasonable resolution of a bona fide dispute over FLSA provisions." Lynn's Food Stores, 679 F.2d at 1355. The analysis includes consideration of (1) whether there are FLSA issues actually in dispute; (2) the fairness and reasonableness of the settlement; and (3) the reasonableness of the attorney's fees, if included in the agreement. Saman, 2013 WL 2949047, ...


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