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Guardado v. Unicorn Cleaning Co., Inc.

United States District Court, D. Maryland

August 30, 2017

MARIA ADELA GUARDADO, Plaintiff
v.
UNICORN CLEANING CO., INC., ET AL., Defendants

          MEMORANDUM OPINION

          PETER J. MESSITTE, UNITED STATES DISTRICT JUDGE.

         Maria Adela Guardado ("Plaintiff) has brought suit against Unicorn Cleaning Company ("Unicorn") and Rosa Ivette Clabaugh (formerly Vasquez) ("Defendants"), alleging violations of the Maryland Wage and Hour Law ("MWHL"), Md. Code Ann., Lab. & Empl. §§ 3-401 et seq., the Maryland Wage Payment and Collection Law ("MWPCL"), Md. Code Ann., Lab. & Empl. §§ 3-501 et seq., and the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201, et seq. Plaintiff and Defendants have now reached a settlement and ask for the Court to approve the settlement and dismiss with prejudice all claims in the Complaint. For the reasons that follow, the Court GRANTS the Joint Motion for Settlement and Dismissal Without Prejudice, ECF No. 10, and DISMISSES WITH PREJUDICE all counts of the Complaint, ECF No. 1, as to both Defendants.

         I.

         Factual and Procedural Background

         Unicorn is a commercial and residential cleaning company owned by Clabaugh that operates and does business in Maryland. ECF No. 1 ¶¶ 4, 5. Plaintiff worked as a cleaning laborer for Unicorn from approximately October 21, 2013 through September 15, 2016. ECF No. 1¶17.

         Plaintiff filed a Complaint on December 13, 2016, alleging that during the time of her employment, she was paid at an hourly rate of $6.00 and $7.00, rates below Maryland's minimum wage of $7.25 as of January 1, 2013. Id. ¶ 18. She also alleges that she worked approximately fifty (50) hours per week and was never compensated at the required overtime rate for those hours worked over forty hours. Id. ¶ 19. On August 7, 2017, before Defendants filed responsive pleadings, the parties filed a Joint Motion for Approval of Settlement and Dismissal with Prejudice, ECF No. 10.

         II.

         Standard of Review

         Congress enacted the FLSA to protect workers from the poor wages and long hours that may result from the significant inequalities in bargaining power between employers and employees. To that end, the statute's provisions are mandatory and 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). 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 employer's overreaching.'" Soman 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 (11th Cir. 1982)).

         In reviewing FLSA settlements for approval, "district courts in this circuit typically employ the considerations set forth by the Eleventh Circuit in Lynn's Food Stores." Beam v. Dillon's Bus Serv., Inc., No. DKC 14-3838, 2015 WL 4065036, at *3 (D. Md. July 1, 2015) (citing Hoffman v. First Student, Inc., No. WDQ-06-1882, 2010 WL 1176641, at *2 (D. Md. Mar. 23, 2010)); Lopez v. NTI, 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." Beam, 2015 WL 4065036, at *3 (quoting Lynn's Food Stores, Inc. v. U.S. By & Through U.S. Dep't of Labor, Employment Standards Admin., Wage & Hour Div., 679 F.2d 1350, 1355 (11th Cir. 1982)). The court considers (1) whether there are FLSA issues actually in dispute, (2) the fairness and reasonableness of the settlement, and (3) the reasonableness of the attorneys' fees, if included in the agreement. Id.

         III.

         Bona Fide Dispute

         In deciding whether a bona fide dispute exists as to a defendant's liability under the FLSA, the court examines the pleadings in the case, along with the representations and recitals in the proposed settlement agreement. See Lomascolo v. Parsons Brinckerhoff Inc., et ah, No. L08CV1310 (AJT/JFA), 2009 WL 3094955 at *16-17 (E.D. Va. Sept. 28, 2009).

         In this case, the parties dispute the individual liability of Defendant Clabaugh. Plaintiff argues that Clabaugh can be held liable because she had economic control over the employment relationship. Ford v. Karpathoes, Inc., No. ELH-14-00824, 2014 WL 6621997 at *3 (D. Md. Nov. 20, 2014) ("Generally, where an individual exercises control over the nature and structure of the employment relationship, or economic control over the relationship, that individual is an employer within the meaning of the FLSA and is subject to liability.") (quotation and citation omitted). Specifically, Plaintiff alleges that Clabaugh had such control because she owned Unicorn, had the power to hire, ...


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