United States District Court, D. Maryland
Mariella Bustos, Plaintiff, represented by Gregg Cohen
Greenberg, Zipin, Amster and Greenberg, LLC.
Santos Reyes, Plaintiff, represented by Gregg Cohen
Greenberg, Zipin, Amster and Greenberg, LLC.
Services, Inc., Defendant, represented by Andre Tyler Hammel,
Hammel Law LLC.
Claudete Sebben, Defendant, represented by Andre Tyler
Hammel, Hammel Law LLC.
Catering, Inc., Defendant, represented by Andre Tyler Hammel,
Hammel Law LLC.
DEBORAH K. CHASANOW, District Judge.
pending and ready for resolution in this Fair Labor Standards
Act ("FLSA") case is a joint motion for approval of
a settlement agreement (the "Agreement"). (ECF No.
26). The issues have been briefed, and the court now rules,
no hearing being deemed necessary. Local Rule 105.6. Because
the Agreement represents a fair and reasonable resolution of
a bona fide FLSA dispute, it will be approved.
Mariella Bustos and Roni Santos Reyes (collectively, the
"Plaintiffs") allege that Defendants M.K. Catering,
Inc. ("M.K. Catering"), JCCS Services, Inc.
("JCCS Services"), and Claudette Sebben
(collectively, the "Defendants") employed them to
work at a warehouse during the week and at catering events on
weekends but failed to compensate them for their overtime
hours. Plaintiffs aver that they received salaries for their
weekday warehouse jobs and an hourly wage for their weekend
catering duties. In total, Plaintiffs contend that they
worked approximately fifty hours per week. Ms. Bustos avers
that she was employed by Defendants from September 2010
through April 21, 2015 and received a salary of $40, 000.00
for the warehouse position and an hourly rate of $30.00 per
hour for the catering position. Ms. Reyes avers that she was
employed from 2008 through April 21, 2015 and received a
salary of $35, 000.00 for the warehouse position and an
hourly rate of $30.00 per hour for the catering position.
commenced this action by filing a complaint on April 23,
2015. (ECF No. 1). The complaint alleges that Defendants
failed to pay Plaintiffs time and a half wages for hours
worked in excess of forty hours per week in violation of the
FLSA and the Maryland analog statutes. After the court denied
Defendants' motion to dismiss (ECF No. 16), and after the
close of discovery, the case was referred to Magistrate Judge
Charles B. Day for mediation (ECF No. 19). Eight months
later, the parties filed the pending motion for approval of
the Agreement. (ECF No. 26). The Agreement provides that,
upon court approval, Defendants will pay Plaintiffs and their
attorney $20, 500.00. (ECF No. 26-1 ¶ 1). Ms. Bustos is to
receive $7, 500.00, Ms. Reyes is to receive $6, 000.00, and
Plaintiffs' attorney is to receive $7, 000.00. (
Id. ¶ 1(a)). Defendants, pursuant to the Agreement,
do not admit liability, but agree to settle in order to avoid
further costs of litigation. ( Id. ¶ 2). In exchange
for the settlement amount, Plaintiffs agree to waive and
release all claims against Defendants. ( Id. ¶ 4).
The Agreement also contains a "nondisparagement"
clause, pursuant to which Plaintiffs may not communicate with
any current or former employee or contractor of Defendants
"for the purpose of encouraging or inciting that
individual to initiate any administrative action or
litigation of any kind against any of the Defendants." (
Id. ¶ 3).
initial review of the pending motion, the undersigned issued
a memorandum opinion and order directing the parties to
supplement the record with information that would enable the
court to conduct a proper assessment of the proposed
settlement. ( See ECF No. 27). Plaintiffs
supplemented the motion by providing a declaration from their
counsel, Gregg C. Greenberg. (ECF No. 28). The declaration
includes: additional information regarding the qualifications
of counsel; a more detailed factual background, including
Plaintiffs' salaries and hourly rate; and more specific
information regarding the time expended by Plaintiffs'
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 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)). Then, 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