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Simpson v. Pure Technologies U.S., Inc.

United States District Court, D. Maryland

April 18, 2018

CODY SIMPSON, et al., Plaintiffs,


          Paula Xinis United States District Judge

         This Memorandum Opinion and Order addresses Plaintiff CODY SIMPSON (“Simpson”) and Defendant PURE TECHNOLOGIES, U.S., INC.'s (“Pure Technologies”) Joint Motion for Judgment. ECF No. 20. Simpson has accepted Pure Technologies' Offer of Judgment pursuant to Federal Rule Civil Procedure 68, and the parties request that this Court approve and enter the judgment. For the reasons that follow, the Court requires additional information before ruling on this motion.

         I. BACKGROUND

         Simpson is a former employee of Pure Technologies. ECF No. 1 at ¶ 9. On August 31, 2017, Simpson and co-Plaintiffs Nicholas Redding and Brian Miles (collectively “Plaintiffs”), filed a complaint on behalf of themselves and those similarly situated, alleging that Pure Technologies improperly classified Plaintiffs as salaried employees and failed to pay them overtime wages in violation of the Fair Labor Standards Act (“FLSA”), Maryland Wage and Hour Law (“MWHL”), and the Maryland Wage Payment and Collection Law (“MWPCL”). Id. at ¶¶ 65-68, 80, 84-85. Pure Technologies filed an answer on September 29, 2017, denying the allegations in the Complaint. ECF No. 4.

         On October 30, 2017, Plaintiffs moved to conditionally certify a class of similarly-situated Pure Technologies employees under the FLSA's collective action provision, 29 U.S.C. § 216(b). See ECF Nos. 11 & 11-1. On November 7, 2017, a telephone conference was held in which the Court determined that limited discovery was necessary before Defendant Pure Technologies would respond to Plaintiffs' Motion. ECF Nos. 14 & 15. Shortly thereafter, Pure Technologies sent Plaintiffs' counsel an Offer of Judgment for each respective Plaintiff. ECF No. 20-1 at 2. Simpson's Offer of Judgment was based on Pure Technologies' records, which showed that during the relevant time period of recovery (September 1, 2014 to September 30, 2016), Simpson worked 1, 0009.3 overtime hours, equaling $27, 932.64 in back wages and liquidated damages. ECF No. 20-1 at 3. Pure Technologies also proffered an additional, to-be-determined sum to cover reasonable attorneys' fees. ECF No. 20-1 at 3. On December 4, 2017, Simpson's counsel informed Pure Technologies that Simpson would accept the Offer of Judgment. Accordingly, Simpson was not deposed, and his case has not been included in Pure Technologies' opposition to Plaintiffs' pending motion to conditionally certify a “similarly-situated” class under the FLSA. Id.; see also ECF No. 18. On March 22, 2018, the parties filed the pending Joint Motion, seeking Court approval of Pure Technologies' Offer of Judgment. ECF No. 20.


         Because Congress enacted the FLSA to shield workers from substandard wages and working conditions arising from their unequal bargaining power as compared to their employers, the FLSA's requirements generally cannot be modified, waived, or bargained away by contract or settlement. See Brooklyn Saw Bank v. O'Neil, 324 U.S. 697, 706 (1945). However, Court-approved settlement is an exception to this rule where “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., DKLC-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)); see also Acevado v. Phoenix Preservation Grp., Inc., No. PJM-13-3726, 2015 WL 60041500, at *4 (D. Md. Oct. 8, 2015).

         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)). More particularly, 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 FLSA issues are 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. The Court addresses each factor in turn.

         III. ANALYSIS

         a. Bona Fide Dispute

         In determining whether a bona fide dispute exists as to the defendant's liability, the court examines the pleadings in the case and the representations in the proposed settlement agreement. See Johnson v. Heartland Dental, LLC, No. PJM-16-2154, 2017 WL 2266768, at *2 (D. Md. May 23, 2017); see also Lomascolo v. Parsons Brinckerhoff, Inc., No. 08-CV-1310, 2009 WL 3094955, at *10 (E.D. Va. Sept. 28, 2009). “A bona fide dispute exists when an employee makes a claim that he or she is entitled to overtime payment. To settle such a dispute, there must be a resolution of the number of hours worked or the amount due.” Lamascolo, 2009 WL 3094955, at *16.

         Here, Simpson alleged in the Complaint that from August 2014 through November 2016, Defendant misclassified him as a salaried employee and improperly denied him overtime compensation. ECF No. 1 at ¶¶ 68, 73, 83-84, 90)). Pure Technologies, on the other hand, maintains that all Plaintiffs were “exempt” employees under the FLSA and the MWHL, and therefore not entitled to overtime wages. See ECF Nos. 4 & 20-1. Accordingly, a bona fide dispute exists as to whether Simpson is a covered employee, implicating Pure Technologies' FLSA liability. Lamascolo, 2009 WL 3094955, at *16; see also ECF No. 20-1 at 5-6.

         b. Fairness and Reasonableness of the Settlement

         Courts evaluate the fairness and reasonableness of a settlement based on six factors: (1) the extent of discovery undertaken; (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 plaintiff's counsel; (5) the opinions of counsel; and (6) the probability of the plaintiff's success on the merits, and the amount of ...

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