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Corea v. SLDB, LLC

United States District Court, D. Maryland

October 4, 2018

CARLOS SUAZO COREA, et al., Plaintiffs
SLDB, LLC, et al., Defendants


          Paula Xinis United States District Judge

         Pending before the Court is Plaintiffs Carlos Suazo Corea, Saturnino Romero Boquin, and Karen Reyes' third motion to approve settlement with consent of Defendants SLDB, LLC, Shen Lin, and David Beeker. ECF Nos. 23, 24. Plaintiffs filed this action alleging that Defendants failed to pay overtime wages in violation of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq.; 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. 1. For the reasons that follow, the Court GRANTS the parties' motion and approves the settlement.

         I. BACKGROUND

         Plaintiffs worked as hourly employees in the kitchen of Defendants' restaurant, Sarku Japan. ECF No. 1 ¶¶ 1, 15. Plaintiffs allege that Defendants paid Plaintiffs one rate for all work, including for overtime. Id. The complaint avers that Corea is owed approximately $15, 000 in overtime wages, Boquin is owed approximately $21, 000 in overtime wages, and Reyes is owed approximately $4, 000 in overtime wages. Id. ¶¶ 34-36.

         On September 27, 2018, the parties jointly moved for the Court to approve a third settlement agreement. ECF No. 23.[1] After informal discovery, Plaintiffs learned that, under their theory of the case, their unpaid overtime wages would be $7, 112.35 for Corea, $17, 758.29 for Boquin, and $2, 115.55 for Reyes. Id. at 2. The settlement agreement provides Plaintiffs with 85% of their maximum potential recovery, in both overtime and liquidated damages, under the FLSA. Id. The agreement also provides $9, 700 in attorneys' fees and costs. Id. The Plaintiffs' explained how their attorneys spent their time on the case and their hourly billing rates. Id. at 6- 7. In the agreement, Defendants deny all liability to Plaintiffs. ECF No. 24 at 7. Finally, the agreement releases all claims, by each party, related to Plaintiffs' employment with Defendants. Id. at 6-7.


         Because Congress enacted the FLSA to shield workers from substandard wages and working conditions arising from the unequal bargaining power between workers and 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., 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)); see also Acevedo v. Phoenix Pres. Grp., Inc., No. PJM 13-3726, 2015 WL 6004150, 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.'” Hackett v. ADF Rest. Invs., 259 F.Supp.3d 360, 365 (D. Md. 2016) (quoting Beam v. Dillon's Bus Serv., Inc., No. DKC 14-3838, 2015 WL 4065036, at *3 (D. Md. July 1, 2015)). More particularly, “[t]he settlement must reflect a ‘fair and reasonable resolution of a bona fide dispute over FLSA provisions.” Hackett, 259 F.Supp.3d at 365 (quoting Beam, 2015 WL 4065036, at *3)). 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. Hackett, 259 F.Supp.3d at 365. The Court addresses each factor in turn.

         III. ANALYSIS

         A. Bona Fide Dispute

         In 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 Brinckerhoff, Inc., No. 1:08cv1310 (AJT/JFA), 2009 WL 3094955, at *10 (E.D. Va. Sept. 28, 2009). Here, Defendants “expressly deny any wrongdoing or liability of any kind.” ECF No. 24 at 7. Defendants maintain that no labor laws were violated and that, even if there were violations, Defendants did not act willfully. ECF No. 23 at 3. Accordingly, the threshold factor of bona fide dispute is met.

         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 settlement contrasted with the potential recovery. Hackett, 259 F.Supp.3d at 365.

         The Court finds the agreement is fair and reasonable. The parties agree that discovery was “extensive” and that Plaintiffs' counsel had “all the useful information he could ever hope to obtain.” ECF No. 23 at 3. The case is relatively “simple” and Plaintiffs' counsel believes this agreement is an “optimal resolution.” Id. at 4. Plaintiffs' counsel has litigated over one hundred wage and hour cases. Id. Although the agreement includes a general release of claims related to Plaintiffs' employment, Defendants have fairly compensated Plaintiffs for the release. See Duprey v. Scotts Co., LLC, 30 F.Supp.3d 404, 410 (2014). The recovery itself is fair and reasonable because it provides Plaintiffs with nearly the maximum ...

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