United States District Court, D. Maryland
PETER J. MESSITTE, District Judge.
Herbert Brown and Richard Coles ("Plaintiffs") have sued Von Paris Enterprises, Inc. ("Von Paris") and Wesley Singleton ("Singleton"), alleging violations of the Maryland Wage Payment and Collection Law ("MWPCL"), Md. Code Ann., Lab. & Empl. §§ 3-505, 3-502, the Maryland Wage and Hour Law ("MWHL"), Md. Code Ann., Lab. & Empl. § 3-415(a), and the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 206, 207. They also allege unjust enrichment. Plaintiffs and Von Paris have now reached a settlement, and ask for the Court to approve the settlement and dismiss with prejudice all claims in the Amended Complaint. For the reasons that follow, the Court GRANTS the Joint Motion for Settlement [Dkt. 33], VACATES the entry of default against Defendant Wesley Singleton [Dkt. 30], and DISMISSES WITH PREJUDICE the remaining counts of the Amended Complaint [Dkt. 25] as to all Defendants.
Factual and Procedural Background
Von Paris is engaged in the business of providing moving, shipping and storage services, including transporting furniture and personal belongings for its customers, usually in connection with their change of personal residence. Von Paris transports such goods across state lines throughout the Mid-Atlantic region. In 2013, Singleton worked as an owner-operator pursuant to an independent contractor agreement with Von Paris, providing moving services in his personally-owned moving truck. Singleton first hired Plaintiff Brown to assist him with moving orders, and subsequently hired Brown's friend, Plaintiff Coles, to assist him.
After having Plaintiffs travel to several states for him, Singleton offered to pay Plaintiffs $450.00 per week for their work. Plaintiffs agreed. Von Paris alleges that it did not know how much Singleton agreed to pay Plaintiffs and did not participate in any decision regarding Plaintiffs' compensation by Singleton. Von Paris also maintains that it did not participate in Singleton's decision to hire either Brown or Coles. Plaintiffs were paid all of their compensation directly by Singleton. Von Paris paid Plaintiffs no wages or other form of compensation at any time.
Plaintiffs regularly reported to a Von Paris facility in Savage, Maryland in connection with their work, including the loading and unloading of goods. They unquestionably performed moving services for the benefit of Von Paris customers and in furtherance of Von Paris's business, traveling throughout Maryland and other states in the Mid-Atlantic region. While performing their work, Singleton and Plaintiffs rode in Singleton's truck and loaded and unloaded the belongings of Von Paris customers at the customers' homes. Plaintiffs also unloaded and packed boxes at Von Paris' facility in Savage, Maryland. Singleton alone supervised Plaintiffs' day-to-day performance of their duties.
After Plaintiffs began working for Singleton, Von Paris required Plaintiffs, as a condition of working for Von Paris customers, to complete an employment application and undergo a background check. Von Paris also required Plaintiffs, as a condition of working for Von Paris customers, to wear Von Paris uniforms during their work. Plaintiffs allege further that they were required to attend a mandatory training on packing and shipping for Von Paris customers. Von Paris denies that the training was required of Plaintiffs and maintains instead that attendance at any such training offered by Von Paris was voluntary for Plaintiffs. Except for the abovementioned application and background check information, Von Paris did not maintain any records of Plaintiffs' work, including records of work hours or compensation. Von Paris alleges that it had no knowledge of Plaintiffs' actual work hours, since it did not directly supervise or oversee Plaintiffs' day-to-day work. Plaintiffs did not record their work hours in any way, such as through a time clock or time sheets.
Plaintiffs allege that Brown worked for Singleton from June to mid-October 2013, and Coles worked from July to mid-October 2013. Plaintiffs allege that they were promised pay at the fixed rate of $450 hours per week, regardless of the number of hours per week they worked. Plaintiffs allege that they stopped working for Singleton because he was not paying them their promised compensation. They say they were paid as follows: both Plaintiffs received $400 for the month of July; $600 for the month of August; and $200.00 for the month of September. Brown was never compensated for the entire month of June.
Plaintiffs allege that they are owed approximately $5, 100 for hours worked between July and October and overtime pay estimated to be more than $3, 000 for each man. Specifically, they allege that they worked an average of 16 hours of overtime each week for 12 weeks, for a total of 192 overtime hours each. Brown is also owed approximately $1, 800 for the entire month of June.
Plaintiffs approached Mack Kean, a Von Paris employee, about their pay and were told that Singleton was the responsible party. Plaintiffs allege that after complaining about not receiving their agreed upon compensation to Singleton, he stopped calling them for work. Von Paris maintains that it notified Singleton in October 2013 that as a result of Coles's background check, Coles did not meet Von Paris's background security criteria and that he could no longer work on Von Paris job orders. Coles indicates he was not notified of that fact at that time, and that he did not learn of it until he received a letter from Von Paris after Coles's counsel sent a demand letter to Von Paris threatening litigation.
Von Paris alleges that it has no knowledge or information regarding the amount Singleton paid each Plaintiff. Von Paris maintains, however, that after Plaintiffs' work ended, Plaintiffs approached Von Paris and claimed wages owed by Singleton that were much less than the numbers they have demanded in this litigation-i.e., by approximately several thousand dollars each.
On February 17, 2014, Plaintiffs filed a Complaint in this Court against Von Paris and Singleton alleging violations of the FLSA, the MWPCL, and the MWHL, and a claim for unjust enrichment [Dkt. 1]. On April 14, 2014, Von Paris moved to dismiss, and alternatively sought an order of summary judgment [Dkt. 9]. After the parties fully briefed the disputed issues, a hearing was held on July 14, 2014. The Court granted Von Paris's Motion to Dismiss or in the Alternative Motion for Summary Judgment as to Count III (failure to keep records) and Count IV (fraudulent misrepresentation) of the original Complaint, but denied the Motion in all other respects [Dkt. 17]. Plaintiffs subsequently filed an Amended Complaint on July 24, 2014 [Dkt. 25], and Von Paris filed an Answer on August 22, 2014 [Dkt. 29].
On October 10, 2014, the parties filed a letter with the Court under Local Rule 111, advising the Court that the parties were entering into a settlement agreement [Dkt. 32]. On October 24, 2014, the parties filed a Joint Motion for Settlement Approval and Dismissal with Prejudice (the "Joint Motion") [Dkt. 33]. On November 20, 2014, the Court ordered the parties to file proposed findings of fact and conclusions of law regarding each of the disputed issues, as well as Plaintiffs' request for attorney's fees [Dkt. 34].
Standard of Review
Congress enacted the FLSA to protect workers from the poor wages and long hours that may result from significant inequalities in bargaining power between employers and employees. To that end, the statute's provisions are mandatory and generally not subject to bargaining, waiver, or modification by contract or settlement. See Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697, 706 (1945). Court-approved settlement is an exception to that rule, "provided that the settlement reflects a reasonable compromise of disputed issues' rather than a mere waiver of statutory rights brought about by an employer's overreaching.'" Saman v. LBDP, Inc., 2013 WL 2949047, at *2 (D. Md. June 13, 2013) (quoting Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350, 1354 (11th Cir. 1982)).
In reviewing FLSA settlements for approval, "district courts in this circuit typically employ the considerations set forth by the Eleventh Circuit in Lynn's Food Stores. " Saman, 2013 WL 2949047, at *3 (citing Hoffman v. First Student, Inc., 2010 WL 1176641, at *2 (D. Md. Mar. 23, 2010); Lopez v. NTI, LLC, 748 F.Supp.2d 471, 478 (D. Md. 2010)). The settlement must "reflect a fair and reasonable resolution of a bona fide dispute over FLSA provisions." Id. The Court considers (1) whether there are FLSA issues actually in dispute, (2) the fairness and reasonableness of the settlement in light of the relevant factors from Rule 23, and (3) the reasonableness of the attorneys' fees, if included in the agreement. Id. (citing Lynn's Food ...