United States District Court, D. Maryland
PETER J. MESSITTE UNITED STATES DISTRICT
Jorge Rivera Nolasco has sued Wok Express International, Inc., Yingying Xiang, and Xinfu Mu (collectively, “Wok Express”), alleging violations of the Maryland Wage and Hour Law (“MWHL”), Md. Code Ann., Lab. & Empl. §§ 3-401 et seq., 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. Nolasco and Wok Express 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 (Paper No. 29), and DISMISSES WITH PREJUDICE this case.
Factual and Procedural Background
Nolasco is a resident of Maryland. Defendant Wok Express International, Inc., doing business as Wok Express Chinese Restaurant, is a Maryland corporation. Defendants Yingying Xiang and Xinfu Mu are the owners of Wok Express.
Nolasco alleges that he was employed by Wok Express as a cook and security agent from July 6, 2011 through June 10, 2014, and worked an average of seventy-nine hours per week.
Throughout this period, he alleges that he was paid $325.00 in cash weekly, which equates to a rate of $4.11 per hour. Nolasco alleges that Wok Express knowingly and intentionally violated his rights under Maryland and federal law. He alleges that he is owed approximately $59, 536.13 in minimum and overtime wages and also seeks statutory damages under the MWPCL and the FLSA.
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 Stores, 679 F.2d at 1355; Lomascolo v. Parsons Brinckerhoff, Inc., 2009 WL 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 WL 3094955, at *16–17.
First, the parties here dispute how many hours Nolasco actually worked each week. They also dispute the amount that he was paid weekly. Most importantly, Wok Express denies that the FLSA and MWHL apply to it, since its tax returns reflect gross sales of less than $250, 000.00 for each of the years Nolasco worked there. See Russell v. Continental Restaurant, Inc., 430 F.Supp.2d 521, 524 (D. Md. 2006) (citing 29 U.S.C. § 203(s)(1)(A)(ii)) (“In order for an enterprise to be ‘engaged in commerce, ’ it must have annual gross value of sales made or business done in excess of $500, 000.”); Md. Code Ann., Lab. & Empl., § 3-403(a)(12) (requiring gross sales in excess ...