United States District Court, D. Maryland
MARIELLA BUSTOS, et al.
JCCS SERVICES, INC., et al.
MEMORANDUM OPINION AND ORDER
DEBORAH K. CHASANOW UNITED STATES DISTRICT JUDGE
15, 2016, Plaintiffs Mariella Bustos and Roni Santos Reyes
(collectively, the “Plaintiffs”) and Defendants
JCCS Services, Inc., Claudete Sebben, and M.K. Catering, Inc.
(collectively, the “Defendants”) filed a joint
motion and memorandum for approval of their Fair Labor
Standards Act (“FLSA”) settlement agreement. (ECF
No. 26). They have not, however, included sufficient
information in their motion for the court to make a
determination as to the reasonableness of the settlement
Congress enacted the FLSA to protect workers from the poor
wages and long hours that can result from significant
inequalities in bargaining power between employers and
employees, the statute’s provisions are mandatory and,
except in two narrow circumstances, are 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). Under the first exception, the
Secretary of Labor may supervise the payment of back wages to
employees, who waive their rights to seek liquidated damages
upon accepting the full amount of the wages owed.
See 29 U.S.C. § 216(c). Under the second
exception, a district court can approve a settlement between
an employer and an employee who has brought a private action
for unpaid wages pursuant to Section 216(b), 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.” Lynn’s Food Stores, Inc. v.
United States, 679 F.2d 1350, 1354 (11th Cir.
1982); see also Duprey v. Scotts Co. LLC, 30
F.Supp.3d 404, 407-08 (D.Md. 2014).
the United States Court of Appeals for the Fourth Circuit has
not directly addressed the factors to be considered in
deciding motions for approval of such settlements, district
courts in this circuit typically employ the considerations
set forth by the Eleventh Circuit in Lynn’s Food
Stores. See, e.g., Duprey, 30
F.Supp.3d at 407-08; Lopez v. NTI, LLC, 748
F.Supp.2d 471, 478 (D.Md. 2010). Pursuant to Lynn’s
Food Stores, an FLSA settlement generally should be
approved if it reflects “a fair and reasonable
resolution of a bona fide dispute over FLSA
provisions.” Lynn’s Food, 679 F.2d at
1355. Thus, as a first step, the bona fides of the
parties’ dispute must be examined to determine if there
are FLSA issues that are “actually in dispute.”
Lane v. Ko-Me, LLC, No. DKC-10-2261, 2011 WL
3880427, at *2 (D.Md. Aug. 31, 2011) (citing Dees v.
Hydradry, Inc., 706 F.Supp.2d 1227, 1241-42 (M.D.Fla.
2010)). As explained in Dees, 706 F.Supp.2d at
The parties’ motion  must describe the nature of the
dispute (for example, a disagreement over coverage,
exemption, or computation of hours worked or rate of pay)
resolved by the compromise. Parties wishing to compromise a
coverage or exemption issue must describe the
employer’s business and the type of work performed by
the employee. The employer should articulate the reasons
for disputing the employee’s right to a minimum wage or
overtime, and the employee must articulate the reasons
justifying his entitlement to the disputed wages. If the
parties dispute the computation of wages owed, the parties
must provide each party’s estimate of the number of
hours worked and the applicable wage. In any
circumstance, the district court must ensure the bona fides
of the dispute; implementation of the FLSA is frustrated if
an employer can extract a disproportionate discount on FLSA
wages in exchange for an attenuated defense to payment.
as a second step, the terms of the proposed settlement
agreement must be assessed for fairness and reasonableness,
which requires weighing a number of factors, including:
“(1) the extent of discovery that has taken place; (2)
the stage of the proceedings, including the complexity,
expense and likely duration of the litigation; (3) the
absence of fraud or collusion in the settlement; (4) the
experience of counsel who have represented the plaintiffs;
(5) the opinions of  counsel . . .; and (6) the probability
of plaintiffs’ success on the merits and the amount of
the settlement in relation to the potential recovery.”
Lomascolo v. Parsons Brinckerhoff, Inc., No.
08–cv–1310, 2009 WL 3094955, at *10 (E.D.Va.
Sept. 28, 2009); see also Duprey, 30 F.Supp.3d at
408 (citations and internal quotation marks omitted).
the parties have not outlined certain key aspects of the
information generally necessary under Lynn’s Food
Stores, and the record does not contain sufficient
information for the court to discern whether the settlement
terms are fair and reasonable. The complaint does not request
a specific amount in damages, and the parties have not
provided the number of overtime hours that Plaintiffs allege
to have worked without receiving overtime pay or their hourly
wage for the relevant time periods. These figures are not
found anywhere in the record, and without them, the parties
leave the court to speculate the amount of Plaintiffs’
potential recovery and the reasonableness of the settlement.
Moreover, the motion and settlement agreement contain only a
passing mention to the amount of attorney’s fees
requested (ECF No. 26, at 3 n.1), which is insufficient for
the court to assess their reasonableness under the
traditional lodestar method.
it is this day of July, 2016, by the United States District
Court for the District of Maryland, ORDERED that:
parties supplement the record within fourteen (14) days,
providing supporting information as described in the
memorandum opinion to enable the court to conduct ...