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Rivera v. Kantutas Restaurant, LLC

United States District Court, D. Maryland, Southern Division

April 27, 2018



          Paul W. Grimm United States District Judge

         On March 3, 2017, Plaintiff Roxana Rivera filed this action against her former employer, Kantutas Restaurant, LLC and its owner, Maria M. Peredo (“Defendant”) alleging that Defendants 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. Compl. ¶¶ 12-13, ECF No. 2. In addition, the Complaint alleges that Defendants' 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. ¶¶ 1, 15. On September 6, 2017, the parties jointly moved for court approval of the settlement agreement they have executed. Jt. Mot. & Mem., ECF No. 30. I find the net amount Rivera 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.

         I. BACKGROUND

         Rivera worked as a waitress at Kantutas Restaurant from approximately July 6, 2013 to December 23, 2016. Compl. ¶ 10. Plaintiff alleges that she typically worked fifty-four hours per week. Id. ¶ 11. Plaintiff alleges that she did not receive her pay in consistent increments and that Defendants paid her below the federal and state minimum wages during her tenure, was never paid overtime, and that her employers failed to comply with the tip credit requirements of the FLSA and MWHL. Id. ¶ 12-15. Plaintiff alleges that she was owed approximately $44, 225.00 in uncompensated overtime and minimum wages. Jt. Mot. & Mem. 5.

         The Settlement Agreement:

releases Defendants . . . from any and all claims . . . whether known or unknown, that arose or may have arisen . . . and acceptance of this Agreement and all provisions set forth herein is in full accord and satisfaction of the claims set forth in the Litigation and to any claims or damages asserted directly, indirectly which could have been asserted, should have been asserted, or could be asserted in the Litigation. This Release is intentionally broad.

         Agreement ¶ 4, ECF No. 30-1. The Agreement provides for litigation costs and attorneys' fees. Id. ¶ 1; Jt. Mot. & Mem. 5. The parties have agreed to settle this case for $35, 000 based on the following terms: Defendants are to pay Rivera $19, 500 in wage-based and liquidated damages; and Defendants are to pay Rivera's attorneys, Zipin, Amster & Greenberg, LLC, $15, 500.00 in fees and costs. Agreement ¶ 1.


         a. FLSA Settlement Generally

         Congress 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)).

         Although 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.

         b. Bona Fide Dispute

         In 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 Rivera ever worked more than forty hours in a work week, whether she was paid, and if Defendants abided by the tip-credit requirements. Jt. Mot. & Mem. 2.

         c. Fairness & ...

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