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Cerritos v. 4806 Rugby Avenue LLC

United States District Court, D. Maryland

May 17, 2018

MARIA ROSA CORNEJO CERRITOS et al, Plaintiffs,
v.
4806 RUGBY AVENUE LLC et al., Defendants.

          MEMORANDUM OPINION

          PETER J. MESSITTE, JUDGE

         Plaintiffs Maria Rosa Cornejo Cerritos and Maria Zelaya have brought suit against pro se Defendants 4806 Rugby Avenue LLC, doing business as Yamas Mediterranean Grill ("Yamas Grill"), and its owner, Tony George Alexis, 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, ef seq. Plaintiffs 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 Consent Motion to Approve Settlement, ECF No. 13, and DISMISSES WITH PREJUDICE all counts of the Complaint, ECF No. 1, as to both Defendants.

         L FACTUAL AND PROCEDURAL BACKGROUND

         Yamas Grill is a corporate entity owned by Defendant Alexis. ECF No. 1 ¶¶ 8-9. Until recently, Yamas Grill was functioning as a restaurant in Bethesda, Maryland. Plaintiff Cornejo Cerritos worked as a kitchen hand at Yamas Grill from approximately January 12, 2015 until it closed in January 2018. Id. ¶ 11. Plaintiff Zelaya was also a kitchen hand for Yamas Grill and worked there from approximately July 11, 2017, until January 2018. Id. ¶ 12. Plaintiffs filed a Complaint on December 20, 2017. alleging that Defendants failed to pay them minimum wage or overtime wages. Id. ¶¶ 15-25. Moreover, they allege, that since approximately October 15, 2017, Defendants failed to pay them anything at all for hours worked. Id. ¶ 26.

         Although Defendants failed to timely answer the Complaint, they eventually filed a Motion for Hearing and a Reasonable Time for Defendants to Hire an Attorney. ECF No. 7. In their Motion, Defendants disputed the pending allegations, noting that the restaurant went out of business due to construction around the property and that Plaintiffs were problem employees. Id. The Court granted Defendants' request for additional time to find an attorney. ECF No. 9. However, on May 1, 2018, before Defendants had obtained an attorney or filed responsive pleadings, the parties filed a Joint Stipulation of Dismissal with Prejudice. ECF No. 10.

         On May 2, 2018, the Court, in a Memorandum Order, directed the parties to submit a joint motion for approval consistent with this Court's practice in FLSA cases. ECF Nos. 11, 12. That Motion is now before the Court.

         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.'" 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)).

         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 al. 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 Alexis. Specifically, Plaintiffs allege that they often worked more than 40 hours a week, they were underpaid, and they were not paid overtime. ECF No. 1 ¶¶ 19-25. Defendants deny these facts. In his Motion for Reasonable Time to Find an Attorney, Defendant Alexis asserts that the restaurant's business was slow and that he had to cut back on payroll. ECF No. 7 ¶ 7. According to Defendant Alexis, he offered Plaintiffs a lighter work schedule, which they refused. Id. ¶¶ 7-8.

         The parties also dispute the total No. of hours Plaintiff Zelaya worked and her status as an employee of Yamas Grill. See ECF No. 7 ¶ 11.

         The parties thus stipulate, and the Court finds, that a bona fide dispute exists as to Defendants' liability under the FLSA, the resolution of which would ...


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