United States District Court, D. Maryland, Southern Division
J. HAZEL, District Judge.
Fair Labor Standards Act ("FLSA") case, Plaintiffs
are former traffic controllers (commonly referred to as
"flaggers") who allege that Defendant PowerComm
Construction, Inc. and its owner, Defendant David Kwasnik,
Sr. (collectively, "PowerComm"), failed to pay them
appropriate overtime wages. The parties have now entered a
settlement agreement and jointly request that the Court
approve the settlement over the objection of named Plaintiffs
Gregory Randolph and Dana Brown, as well as opt-in Plaintiffs
Lenard Pringle, Leslie Gross, and Eunise Melton
(collectively, the "Objectors"). A Fairness Hearing
was conducted on February 18, 2016, during which parties
presented oral arguments and the Objectors each testified.
For the reasons explained below, the Court will approve the
proposed settlement agreement.
is an electrical utility construction company. See
ECF No. 21 at 22. David Kwasnik, Sr. is the President
and CEO of PowerComm. See id. Plaintiffs are
individuals who work or have worked as flaggers for
PowerComm. See ECF No. 136-1-136-68. A flagger
directs vehicles in traffic to ensure the safety of road
workers and traffic while construction is being performed on
the road. See ECF No. 130-2 at 2.
typically contracts with other companies to provide
construction, upgrading, and maintenance services for
overhead and underground distribution centers. See
ECF No. 21 at 22. Specifically, PowerComm is hired to: erect
utility poles and towers: replace poles, conductors,
insulators, and transformers: install fiber-optic and coaxial
cable: cast in place manholes; and, remediate and demolish
bridges, roads, sidewalks, and buildings. See id.
During the relevant time period, PowerComm had one contract
to provide flaggers to the Potomac Electric Power Company
("PEPCO"). See id. at 23: see
also ECF No. 130-3 at 23. The flaggers typically
reported to the PowerComm yard in the morning and remained
until PowerComm instructed them where to go. See ECF
No. 130-3 at 55-56. PowerComm would then send the flaggers to
the location requested by PEPCO. See id. at 24.
filed their Complaint on June 12, 2013, alleging violations
of the FLSA and the Maryland Wage and Hour Law
("MWHL") for failure to pay overtime. See
ECF No. 1. On August 14, 2013 and September 27, 2013,
PowerComm filed motions for summary judgment regarding the
individual claims of Plaintiffs Gregory Randolph and Dana
Brown, respectively, arguing that Plaintiffs were independent
contractors not covered by the FLSA. See ECF Nos. 20
& 34. Judge Paul Grimm denied PowerComm's motions for
summary judgment and conditionally certified the case as a
collective action under the FLSA. See ECF Nos. 50 &
51. Since then, more than fifty Plaintiffs have opted-in to
the collective action.
2, 2014, PowerComm filed a third motion for partial summary
judgment, arguing that if PowerComm did violate the FLSA, it
had done so in good faith thus making liquidated damages
unavailable. See ECF Nos. 82 & 83. The Court denied
this motion as premature. See ECF No. 116. On August
5, 2014, Plaintiffs filed a Motion for Protective Order and
for Sanctions, arguing that PowerComm had improperly paid
some of the opt-in Plaintiffs to opt-out of the collective
action. See ECF No. 89. On August 29, 2014, the
Court prohibited PowerComm from further contact with
Plaintiffs regarding this lawsuit and invalidated all opt-out
forms. See ECF No. 104.
filed a fourth Motion for Summary Judgment on January 23,
2015, along with a Motion to Decertify the Conditional
Collective Action. See ECF Nos. 128 & 129.
Plaintiffs filed a Cross-Motion for Partial Summary Judgment
and a Motion for Nonconditional Certification on February 6,
2015. See ECF Nos. 130 & 131.
parties' motions for summary judgment were granted, in
part, and denied, in part. ECF No. 142. In its August 21,
2015 Memorandum Opinion, the Court found that Plaintiffs are
PowerComm employees covered by the FLSA and that liquidated
damages would be applied if judgment for the Plaintiffs is
rendered. Id. The Court denied PowerComm's
motion for summary judgment based on their contention that
Plaintiffs failed to timely opt-in and failed to allege a
compensable claim. Id. PowerComm's motion for
summary judgment on the issue of the statute of limitations
was granted with respect to certain Plaintiffs whose claims
were therefore dismissed but denied with regard to certain
other Plaintiffs whose claims therefore remained.
Id. Finally, the Court certified Plaintiffs'
collective FLSA action. Id.
the resolution of dispositive motions, a Scheduling Order was
issued setting a trial date of February 18, 2016. ECF No.
148. On December 29, 2015, the parties filed a Motion to
Schedule Fairness Hearing to determine the fairness of and
approve a settlement agreement reached by the parties. ECF
No. 156. An Order granting the Motion for Fairness Hearing
was entered and, after appropriate notice was approved and
issued, a Fairness Hearing was held on February 18, 2016, the
date previously set for trial. At the hearing, named
Plaintiffs Gregory Randolph and Dana Brown, as well as opt-in
Plaintiffs Lenard Pringle, Leslie Gross, and Eunise Melton,
testified regarding their objections to the settlement
agreement. The general concern of Pringle, Gross, and Melton
was with their specific proposed settlement payments, with
some challenging the amounts being received by other opt-in
Plaintiffs. Counsel for the Plaintiffs contended that the
settlement amount reflected his concerns with the case,
including difficulties maintaining contact with certain
Plaintiffs and concerns about the Defendants' ability to
pay if a judgment for a more significant amount was reached
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 1350, 1354
(11th Cir. 1982); see also Lopez v. NTI,
LLC, 748 F.Supp.2d 471, 478 (D. Md. 2010) (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, 30
F.Supp. 3d 404 (D. Md. 2014). Before approving a 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 "(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." Duprey, 30 F.Supp.
3d at 408. "These factors are most likely to be
satisfied where there is an assurance of an adversarial
context' and the employee is represented by an attorney
who can protect [his] rights under the statute.'"
Id. (citing Lynn's Food Stores, Inc.,
679 F.2d at 1354).
the Fourth Circuit has not directly addressed the factors to
consider in determining whether an [FLSA class settlement]...
is fair and reasonable, various federal courts have
analogized to the fairness factors generally considered for
court approval of class action settlements under Rule
23(e).'" Hoffman v. First Student, No.
WDQ-06-1882, 2010 WL 1176641 (D. Md. Mar. 23, 2010)
(alteration in original) (citing Lomascolo v. Parsons
Brinkernoff, Inc., No. I:08cv1310, 2009 WL 3094955, at
*10 (E.D. Va. ...