United States District Court, D. Maryland, Southern Division
MEMORANDUM OPINION & ORDER
W. Grimm United States District Judge.
November 25, 2015, Plaintiffs Mi Ja Park and Eun Young Bang
filed this action against their former employer, Myung Ga of
MD, Inc., doing business as Lighthouse Tofu, and its
owner-operators ("Lighthouse)) alleging that Lighthouse
failed to pay them minimum wages and overtime compensation in
violation of the Fair Labor Standards Act ("FLSA",,
29 U.S.C. SS 201-219, and the Maryland Wage and Hour Law
("MWHL",, Md. Code Ann., Lab. & Empl. SS 3-401
to 3-430. Compl. ¶¶ 1-2, ECF No.
1. In addition, the Complaint alleges that Lighthouse's
failure to pay minimum wages and overtime compensation also
violated the Maryland Wage Payment and Collection Law
("MWPCL",, Md. Code Ann., Lab. & Empl. SS 3-501
to 3-509.Id. ¶ 2. On July 29,
206,, the parties jointly moved for court approval of the
settlement agreement they have executed. Jt. Mot. & Mem.,
ECF NO.8. I find the net amount Park and Bang are to receive
to be fair and reasonable in light of the facts of this case.
and Bang worked as waitresses at Lighthouse Tofu for periods
of about four-and-a-half and three-and-a-half years
respectively before their August 2015 termination.. Compl.
¶¶ 17-20. The Plaintiffs allege
that Lighthouse paid them hourly wages between $3.00 and
$4.00 during their tenures and typically required them to
work sixty hours a week. Id.
¶¶ 22-24. Park and Bang also
allege that Lighthouse stole their tips by requiring equal
distribution of tips among all Lighthouse employees but
subjecting only tips collected by the waitresses and not
those collected by the owner-operators to distribution.
Id. ¶¶ 26-27. The
Plaintiffs further allege that Lighthouse retaliated against
them by terminating their employment only days after they
complained of underpayment of wages and tip theft.
Id. ¶¶ 36-39.
Settlement Agreement: "release(s] Defendants ... to and
from any claims . . . arising from any
omissions, acts, or facts that have occurred up until and
including the Effective Date of this Settlement Agreement .
., . ." Agreement ~ 3, ECF No. 8-1. The
Agreement provides for litigation costs but not
attorneys' fees. Jt. Mot. & Mem. 3.
FLSA Settlement Generally
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. To that
end, the statute's provisions are mandatory and generally
are not subject to bargaining, waiver, or modification by
contract or settlement. See Brooklyn Sav. Bank v.
0'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 employerss
overreaching.'" Saman v. LBDP, Inc., No.
DKC-12-1083, 2013 WL 2949047, at *2 (D. Md. June 13, 2013)
(quoting Lynn's Food Stores, Inc. v. United
States, 679 F.2d 1350, 1354 (1tth Cir. 1982)).
the Fourth Circuit has not addressed the factors to be
considered in approving FLSA settlements, "district
courts in this circuit typically employ the considerations
set forth by the Eleventh Circuit in
Lynn's Food Stores." Id.
at *3 (citing Hoffman v. First Student, Inc., No.
WDQ-06-1882, 2010 WL 1176641, at *2 (D. Md. Mar. 23, 2010);
Lopez v. NT!, 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, " which includes findings with regard
to (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., No. 08-1310, 2009 WL 3094955, at *10 (E.D. Va.
Sept. 28, 2009); Lane v. Ko-Me, LLC, No.
DKC-10-2261, 2011 WL 3880427, at *2-3 (D. Md. Aug. 31,
2011)). 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."
Lynn's Food Stores, 679 F.2d at
Bona Fide Dispute
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.
The Joint Motion and Memorandum makes clear that several
issues are in bona fide dispute. Most importantly,
the parties disagree about whether Park and Bang were
permitted to keep all of the tips they received and whether
they received notice of a tip credit; the number of overtime
hours they worked; whether they were paid for hours they did
not work; and whether their termination was retaliation for
engaging protected activity under the FLSA and Maryland law.
Fairness & Reasonableness
evaluating the fairness and reasonableness of this
settlement, I must consider:
(1) the extent of discovery that has taken place; (2) the
stage of the proceeding,, 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 plaintiff; (5) the
opinions of class counsel . . . ; and (6)
the probability of plaintiff['s] ...