United States District Court, D. Maryland
EVEL YN CHAVEZ, et al. Plaintiff,
BESIE'S CORP., Defendant.
GEORGE J. HAZEL, District Judge.
Plaintiffs Evelyn Chavez, Karla Lizama, Jerry Calderon Argueta, Dinora Melendez, Brenda Campos, and Angelica Albizurez filed this action against their former employer Besie*s Corp., seeking damages and other relief for Besie's Corp.'s alleged failure to pay them minimum and overtime wages in violation of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., the Maryland Wage and Hour Law ("MWHL"), Md. Code. Lab. & Empl. Article ("LE") § 3-401 et seq., and the Maryland Wage Payment and Collection Law ("MWPCL"), Md. Code. LE § 3-501 et seq. ECF No. 1. Besie's Corp. answered the Complaint and filed a Motion to Dismiss Plaintiffs' MWPCL claims. See ECF Nos. 8 & 9. The Court granted, in part, and denied, in part, the motion. See ECF Nos. 18 & 19. At the Rule 16 Scheduling Conference, the parties requested an opportunity to conduct limited discovery prior to the entry of a formal Scheduling Order in an effort to resolve the case while limiting litigation costs. The request was granted. See ECF No. 22.
The parties now jointly move for approval of a settlement agreement and dismissal of the action with prejudice. ECF No. 27. The Court has reviewed the Complaint, the Answer filed by Defendant, the Motion to Dismiss MWPCL claims and the Opposition thereto, the parties-Joint Motion to Approve Settlement Agreement and to Dismiss Action with Prejudice, the Settlement and General Release Agreement, and the Itemization of Attorneys' Fees. ECF Nos. 1. 8-12. & 27. For the reasons explained below, the Court finds that a bona fide dispute exists regarding liability under the FLSA, the settlement agreement is a fair and reasonable compromise of the dispute, and the attorney's fees are reasonable. See Lynn's Food Stores. Inc. v. United States, 679 F.2d 1350. 1355 (11th Cir. 1982); Lopez v. NTI. LLC, 748 F.Supp.2d 471. 478 (D. Md. 2010): Leigh v. Bottling Group. LLC, DKC-10-0218, 2012 WL 460468 at * 4 (D. Md. Feb. 10, 2012). Therefore, the Court will GRANT the motion and instruct the clerk to CLOSE this case.
I. FACTUAL BACKGROUND
Plaintiffs worked for the Defendant at one of its three restaurants (the Gaithersburg, Maryland location). ECF No. 3 at ¶¶ 1-2 & ECF No. 27-1 at 1. The following chart represents the total hours (with a separate column representing overtime hours) that each Plaintiff claims to have worked during the three years preceding this lawsuit, the minimum wages that each Plaintiff believes they should have been paid, and the overtime wages that each Plaintiff believes they should have been paid. ECF No. 3 at ¶¶ 5-8.
Plaintiff Total Hours Overtime Hours Minimum Overtime Wages Earned Wages Earned Melendez 2, 420 660 $17, 545.00 $2, 393.00 Albizurez 1, 440 680 $10, 440.00 $2, 465.00 Chavez 3.075 507 $22, 294.00 $1, 838.00
Campos 4, 716 1, 890 $34, 191.00 $6, 851.00 Argueta 2, 400 400 $17, 400.00 $1, 450.00 Lizama 1, 440 160 $10, 440.00 $580.00
Plaintiffs agree that Defendant paid some of the Plaintiffs a small amount of money during the course of the employment, but Plaintiffs believe that the amount did not collectively exceed $5, 000.00 in addition to tips. Id. at ¶ 10-11.
A. FLSA Settlements
The FLSA does not permit settlement or compromise over alleged FLSA violations except with (1) supervision by the Secretary of Labor or (2) a judicial finding 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." Lynn's Food Stores. Inc., 679 F.2d at 1354; see also Lopez. 748 F.Supp.2d at 478 (explaining that courts assess FLSA settlements for reasonableness). These restrictions help carry out the purpose of the FLSA. which was enacted "to protect workers from the poor wages and long hours that can result from significant inequalities in bargaining power between employers and employees." Duprey v. Scotts Co. LLC, PWG-13-3496, 2014 WL 2174751 at *2 (D. Md. May 23. 2014). Before approving an FLSA settlement, courts must evaluate whether the "settlement proposed by an employer and employees... is a fair and reasonable resolution of a bona fide dispute over FLSA provisions." Lynn "s Food Stores. Inc., 679 F.2d at 1355 (italics not in original). To do so, courts examine whether there are FLSA issues actually in dispute, the fairness and reasonableness of the settlement, and the reasonableness of the attorney's fees. ...