United States District Court, D. Maryland, Southern Division
XINIS, UNITED STATES DISTRICT JUDGE
Wilman Ortega (Plaintiff) and Defendants Choice Stairways,
Inc., Kenneth T. Cleaver and Juan David Lopez, (collectively,
“Defendants”), jointly move for approval of a
settlement agreement. Plaintiff filed this action alleging
that Defendants denied him overtime pay in violation of the
Fair Labor Standards Act (“FLSA”), 29 U.S.C.
§ 201 et seq., and the Maryland Wage and Hour
Law (“MWHL”), Md. Code, Lab. & Empl. Article
(“LE”) § 3-401 et seq., and the
Maryland Wage Payment and Collection Law
(“MWPCL”), Md. Code, LE § 3-501 et
seq. ECF No. 1.
Court has reviewed the Complaint, the parties' Joint
Motion for Approval of Settlement Agreement, and the
Settlement Agreement and Release. ECF No. 7. For the reasons
explained below, the Court finds that bona fide
disputes exist under the FLSA, the settlement agreement is a
fair and reasonable compromise of the disputes, and the
attorney's fees are reasonable. See Lynn's Food
Stores, Inc. v. United States, 679 F.2d 1350, 1355 (11th
Cir. 1982); Leigh v. Bottling Group, LLC, No. DKC
10-0218, 2012 WL 460468, at * 4 (D. Md. Feb. 10, 2012);
Lopez v. NTI, LLC, 748 F.Supp.2d 471, 478 (D. Md.
2010). Therefore, the Court will GRANT the motion and
instruct the clerk to close this case.
Ortega worked for Defendants as an hourly employee in the
manufacturing and distributing operations on a reoccurring
basis between May 2014 and and July 22, 2016. ECF No. 1 at
¶¶ 10-11. Plaintiff alleges that he was denied
overtime wages during this time period for hours worked in
excess of forty hours per work week. Id.
filed the initial Complaint on July 26, 2016. The parties
engaged in early and fruitful settlement negotiations. ECF
No. 7-1 at 6. On August 29, 2016, the parties submitted the
Joint Motion for Settlement Approval. Id.
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 at 1354; see also Lopez, 748 F.Supp.2d at
478 (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, 407 (D. Md. 2014). Before
approving an 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 (emphasis added). To
do so, courts examine whether there are FLSA issues actually
in dispute, the fairness and reasonableness of the
settlement, and the reasonableness of the attorney's
fees. Duprey, 30 F.Supp.3d. at 408 (internal
citations omitted). “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).
Bona Fide Dispute
determining whether a bona fide dispute over FLSA
liability exists, the Court reviews the pleadings, any
subsequent court filings, and the parties' recitals in
the proposed settlement. See Lomascolo v. Parsons
Brinkernoff, Inc., No. 1:08cv1310 (AJT/JFA), 2009 WL
3094955 at *10 (E.D. Va. Sept. 28, 2009). Here, defendants
expressly denied liability in response to Plaintiff's
complaint and make no admissions of liability. Whether
Plaintiff is entitled to overtime wages as a covered employee
under the FLSA is a fact-specific inquiry that is frequently
at the heart of FLSA litigation. See, e.g.,
Schultz v. Capital Int'l Sec., Inc., 466 F.3d
298 (4th Cir. 2006). Further, the parties also agree that
bona fide disputes exist with regard to awarding
exemplary damages under the MWPCL. ECF No. 7-1 at 4.
Accordingly, this factor is satisfied.
Fairness & Reasonableness
determining whether a settlement of FLSA claims is fair and
reasonable, the Court may consider the following:
(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 class counsel and class members after receiving notice of
the settlement whether expressed directly or through failure
to object; and (6) the probability of ...