United States District Court, D. Maryland
PETER J. MESSITTE, District Judge.
Nemecio Llamas Lopez and Ramiro Bravo ("Plaintiffs") have sued Amerigal Construction Co., Inc., and Luis A. Ezequiel (collectively, "Amerigal"), alleging violations of the Maryland Wage Payment and Collection Law ("MWPCL"), Md. Code Ann., Lab. & Empl. §§ 3-501 et seq., and the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 206, 207. Plaintiffs and Amerigal have now reached a settlement, and ask for the Court to approve the settlement and dismiss with prejudice all claims in the Complaint. For the reasons that follow, the Court GRANTS the Joint Motion for Settlement, ECF No. 19, and DISMISSES WITH PREJUDICE the remaining counts of the Complaint, ECF No. 1, as to all Defendants.
Factual and Procedural Background
Amerigal is a construction company with its principal place of business in Maryland, and Ezequiel was an owner, agent, or principal of Amerigal. The Plaintiffs are both former employees of Amerigal who worked as concrete laborers, and were paid at an hourly rate. Plaintiffs allege that Amerigal failed to pay each plaintiff any overtime premium for hours worked in excess of 40 in the work week. The Complaint sought relief not only for the named Plaintiffs. but also, per 29 U.S.C. § 216(b), a class of similarly situated opt-in litigants (the "Putative Plaintiffs"). No such Putative Plaintiff opted-in to the action. Neither the Joint Motion for Settlement nor the Settlement Agreement purported to resolve any claims asserted on behalf of the Putative Plaintiffs.
Plaintiffs filed the Complaint on February 24, 2015. ECF No. 1. Amerigal did not answer the Complaint. Instead, the parties engaged in informal discovery and settlement discussions, and on March 24. 2015, submitted the pending Joint Motion for Settlement. ECF No. 6.
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 Say. 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 Stores, 679 F.2d at 1355; Lomascolo v. Parsons Brinckerhoff, Inc., 2009 WI, 3094955, at *10 (E.D. Va. Sept. 28, 2009); Lane v. Ko-Me, LLC, 2011 WL 3880427, at *2-3 (D. Md. Aug. 31, 2011)).
Bona Fide Dispute
In deciding whether a bona fide dispute exists as to a defendant's liability under the FLSA, courts examine the pleadings in the case, along with the representations and recitals in the proposed settlement agreement. See Lomascolo, 2009 WI. 3094955, at *16-17.
The parties stipulate that, after exchange of informal discovery, they agree on the number of hours and amounts paid to Plaintiffs during each week of their employment by Amerigal. See ECF No. 6-1, at 3-4. Based on these figures, Plaintiff Llamas Lopez argues that he was underpaid for overtime in the amount of $2, 577.22; Plaintiff Bravo argues that he was underpaid for overtime in the amount of $1, 771.75. See id. Other than Amerigal's statement that it seeks to settle the matter "solely" in order to avoid the inconvenience and costs of litigation of Plaintiffs' claims, see id. at 2, the parties' submissions are unclear about what, if any, bona fide dispute exists as to Amerigal's liability under the FLSA. However, there appear to be a few discrepancies between the number of overtime hours alleged in the Complaint, and the number of overtime hours to which the parties stipulate in the Joint Motion for Settlement. Compare, e.g., ECF No. 1, at 4 (alleging that Llamas-Lopez worked 65 hours in the week ending October 19, 2013) ...