United States District Court, D. Maryland, Southern Division
ALFONSO F. ELEJALDE, et al., Plaintiffs,
PERDOMO CONTRUCTION AND MANAGEMENT SERVICE, et al., LLC et al., Defendants.
J. HAZEL, UNITED STATES DISTRICT JUDGE.
Alfonso F. Elejalde, Bernard J. Junior Coles, Mauriel Grant,
Carlos Antonio Castro Blanco, Ramon Pina Rodriguez, Ronni
Alexis Martinez Reyes, Stanley L. Diggs, Shannon D. Edwards,
Jr., Norman E. Coleman, Everett A. Warren, DeSalles W.
Nelson, Jonathan L. Green, Jose J. Martinez Graziano, David
Colston, Jr., Franklin Rene Alvarez, Larry Rondell Hawkins,
Jesse Ronell Fields, Robert Eric Hunt, Jamar Turrell Delonta
Caper, Curtis Greene, Ramone Beasley, Darrell R. Green, Daryl
Christopher Wilson, Derrick Adkins, Tachere A. Diggs and
Khamsay Syrapcanakoun (collectively, "Plaintiffs")
filed this action against their former employer, Defendants
Perdomo Construction and Management Services, LLC and Orlando
Perdomo (collectively, "Defendants"), seeking
damages and other relief for Breach of Contract and for
Defendants' alleged failure to pay them overtime and
minimum wages in violation of the Fair Labor Standards Act
("FLSA"), 29 U.S.C. S 201 et seq., and the
Virginia Minimum Wage Act ("VMWA"), VA Code Ann.
§ 40.1-28.10. The parties now jointly
move for approval of a settlement agreement. ECF Nos. 28 and
29. The Court has reviewed the Complaint, the Answer and
Affirmative Defenses of the Defendants, the parties'
Joint Motion for Approval of Settlement Agreement, the
Settlement Agreement and Release and the Joint Supplemental
Submission Regarding Motion for Approval of Settlement
Agreement. ECF Nos. 1, 82 28, 28-2 & 29. For the reasons
explained below, the Court finds that bona fide
disputes exist regarding liability under the FLSA, the
settlement agreement is a fair and reasonable compromise of
the disputes, and the attorney's fees are reasonable.
See Leigh v. Bottling Group, LLC, DKC-10-218, 2012
WL 460468 at * 4 (D. Md. Feb. 10, 2012; Lopez v. NTI,
LLC, 748 F.Supp.2d 471, 488 (D. Md. 2010);
Lynn's Food Stores, Inc. v. United States, 679
F.2d 1350, 1355 (11th Cir. 1982). Therefore, the Court will
GRANT the motion and instruct the clerk to close this case.
to the Complaint, Plaintiffs worked for Defendants as
laborers from March 2014 through July 2014. See ECF
No. 1 ¶ 21. Payments made to Plaintiffs for their work
was below the amount the parties had agreed to by contract
and below the legal minimum wage requirement.. Id.
¶ 22, 24. Additionally, Plaintiffs were not paid at the
overtime rate of one and a half times their wage when they
worked in excess of forty hours per week as required by
federal and state law. Id. at 6. The Complaint
further alleges that Plaintiffs are owed "approximately
$190, 320 in straight time and overtime, " id.
¶ 25, and "$50, 000 in minimum and overtime wages
under the FLSA and the VMWA, " id. ¶ 26.
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 (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
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. Lomascolo v. Parsons
Brinkernoff, Inc., No. 1:08cv1310 (AJT/JFA), 2009 WL
3094955 at *10 (E.D. Va. Sept. 28, 2009). Here, a review of
the filings demonstrates that while Plaintiffs contend they
are entitled to overtime and minimum wages, Plaintiffs lacked
accurate records and had little evidence with regard to hours
worked or agreed upon wages. ECF No. 29 at 2. Indeed
Defendants assert that, for some Plaintiffs, there is no
record that they were ever employed by the Defendants or
that, if they were, they would be classified as employees
under relevant law. Id. Under these circumstance,,
the parties have sufficiently shown that bona fide
disputes regarding the extent of liability under the FLSA
exist in this case.
Fairness & Reasonablensss
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 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 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 plaintiffs' success
on the merits and the amount of the settlement in relation to
the potential recovery.
Lomascolo, 2009 WL 3094955 at *10. Here, the parties
began settlement talks soon after the entry of a discovery
scheduling order. ECF Nos. 12, 13. Given the current stage of
the litigation, significant expenses would be incurred if the
parties engaged in formal discovery, dispositive motions, and
possibly trial. See, e.g., Saman v. LBDP,
DKC-12-1083, 2013 WL 2949047 at *3 (D. Md. June 13, 2013..
Additionally, there has been no evidence to suggest any fraud
or collusion in the settlement. See ECF No. 30 at 2.
The settlement agreement is for a total of $20, 000.
See ECF No. 28-1 at 6. Although this is a modest sum
in comparison to the amount claimed in the Complaint, in
addition to the challenges to the Plaintiffs' case caused
by lack of documentation, the parties also considered that
the Defendant corporation is no longer a going concern and
further litigation may have diminished Defendants'
ability to later pay any compensation to Plaintiffs. As was
the case in Saman, "[i]n light of the risks and
costs associated with proceeding further and Defendants'
potentially viable defenses, this amount appears to reflect a
reasonable compromise over issues actually in dispute."
2013 WL 2949047 at *5 (citation and internal quotation marks
and brackets omitted).
the settlement agreement contains a general release of claims
beyond those in the Complaint, and a general release can
render an FLSA settlement agreement unreasonable, the Court
is not required to evaluate the reasonableness of the
settlement as it relates to non-wage-dispute claims if the
employee is compensated reasonably for the release executed.
See Duprey, 2014 WL 2174751 at *4. As explained
above, the Court finds that $20, 000 is reasonable for ...