United States District Court, D. Maryland, Southern Division
XINIS, UNITED STATES DISTRICT JUDGE.
Bobbie Ellis (“Plaintiff” or “Ellis”)
and Defendant Panco Management of NJ, LLC
(“Defendant”) jointly move for approval of a
settlement agreement. Plaintiffs filed this action alleging
that Defendants denied them 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. 18.
Court has reviewed the Complaint, the parties' Joint
Motion for Approval of Settlement Agreement, and the
Settlement Agreement and Release. ECF Nos. 4, 18 & 18-1. 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.
worked as a leasing agent for Defendant between November 4,
2014 and September 8, 2016. ECF No. 4, at ¶ 7-8.
Plaintiff alleges that she was denied overtime wages during
this time period for hours worked in excess of forty hours
per work week. Id. at ¶ 13. Plaintiff filed
suit on February 2, 2017. ECF No. 1. The parties immediately
engaged in ongoing settlement discussions and exchanged
informal discovery. See ECF No. 18, at ¶ 4. On
September 6, 2017, 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. “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. See Lomascolo v. Parsons
Brinkernoff, Inc., No. 1:08cv1310 (AJT/JFA), 2009 WL
3094955 at *10 (E.D. Va. Sept. 28, 2009). Here, while
Plaintiff claimed she was denied overtime wages, Defendant
initially contested Plaintiff's position and even in
settlement does not admit liability. ECF Nos. 9, 18 at ¶
3. 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). Accordingly, the Court finds
that a bona fide dispute existed between the
Fairness & Reasonableness In 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 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
exhibits supporting the request for attorney's fees
demonstrate that the parties devoted a significant amount of
time to settlement negotiations which spanned months. ECF No.
19, at 2. The parties also began the discovery process both
formally and informally. Id. Thus, the parties had
sufficient opportunity to “obtain and review evidence,
to evaluate their claims and defenses[, ] and to engage in
informed arms-length settlement negotiations with the
understanding that it would be a difficult and costly
undertaking to proceed to trial of this case.”
Lomascolo, 2009 WL 3094955, at *11.
evidence suggests that the parties engaged in any fraud or
collusion in the settlement. Under the settlement agreement,
Plaintiff will receive $3, 100 for unpaid wages. Given that
the Plaintiff claimed $6, 831 in unpaid wages, and
“[i]n light of the risks and costs associated with
proceeding further and Defendant['s] potentially viable
defenses, this amount appears to reflect a reasonable
compromise over issues actually in dispute.” Saman
v. LBDP, ...