United States District Court, D. Maryland, Southern Division
MEMORANDUM OPINION & ORDER
W. GRIMM, UNITED STATES DISTRICT JUDGE
March 3, 2017, Plaintiff Clara Garcia Eguizabal filed this
action against her former employers, Hu and Tan, Inc., doing
business as New Village, and 58Unity, LLC, also doing
business as New Village, and their owner-operators
(collectively “New Village”) alleging that New
Village failed to pay her minimum wages and overtime
compensation in violation of the Fair Labor Standards Act
(“FLSA”), 29 U.S.C. §§ 201-219, and the
Maryland Wage and Hour Law (“MWHL”), Md. Code
Ann., Lab. & Empl. §§ 3-401 to 3-430. Am.
Compl. ¶¶ 1-2, ECF No. 18. In addition, the
Complaint alleges that New Village's failure to pay
minimum wages and overtime compensation also violated the
Maryland Wage Payment and Collection Law
(“MWPCL”), Md. Code Ann., Lab. & Empl.
§§ 3-501 to 3-509. Id. ¶ 2. On
December 19, 2017, the parties jointly moved for court
approval of the settlement agreement they have executed. Jt.
Mot. & Mem., ECF No. 43. I find the net amount Eguizabal
is to receive to be fair and reasonable in light of the facts
of this case. Additionally, I approve the attorneys' fee
award under a lodestar calculation.
worked in the kitchen at New Village from approximately July
29, 2015 to November 16, 2016. Am. Compl. ¶ 11.
Plaintiff alleges that New Village paid her hourly wages
between $4.89 and $5.57 during her tenure and typically
required her to work sixty-six hours per week. Id.
¶¶ 26-35. Eguizabal also alleges that she typically
worked eleven hour days and occasionally worked every day in
a given week. Id. ¶¶ 31, 33. Plaintiff
alleges that she was owed approximately $29, 199.70 in
uncompensated overtime and minimum wages.
Settlement Agreement: “release[s] . . . and forever
discharge[s] Current and Former Defendants . . . from all and
every manner of action . . . which the Plaintiff ever had,
now has, or hereafter can, shall, or may have against Current
and/or Former Defendants . . . . This release also includes
any claim for attorney's fees.” Agreement ¶
5(a), ECF No. 43-1. The Agreement provides for litigation
costs and attorneys' fees. Jt. Mot. & Mem. 5. The
parties have agreed to settle this case for $17, 400 based on
the following terms: “Current Defendants” are to
pay Eguizabal $7, 600.00 in wage-based and liquidated
damages; “Former Defendants” are to pay Eguizabal
$2, 400.00 in non-wage based damages; and “Current
Defendants” are to pay Eguizabal's attorneys,
DCWAGELAW, $7, 400.00 in fees and costs. Agreement ¶
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.
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.'” 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 (11th 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. 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, ” 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 [her] rights under the statute.” Lynn's
Food Stores, 679 F.2d at 1354.
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 any violations occurred and which if
any of the current and former Defendants were responsible for
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 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 plaintiff; (5) the
opinions of class counsel . . .; and (6) the probability of