United States District Court, D. Maryland, Southern Division
CHARLES B. DAY UNITED STATES MAGISTRATE JUDGE
Maurice Hickman (“Plaintiff”) brought claims for
failure to pay minimum wage and overtime compensation under
the Fair Labor Standards Act (“FLSA”), 29 U.S.C.
§ 201, et seq., the Maryland Wage and Hour Law
(“MWHL”), Md. Code Ann., Lab. & Empl.
§§ 3-401, et seq., and the Maryland Wage
Payment and Collection Law (“MWPCL”), Md. Code
Ann., Lab. & Empl. §§ 3-501, et seq.
Plaintiff brought these claims as a collective action under
the FLSA, 29 U.S.C. § 206(b) and as a class action under
Federal Rule of Civil Procedure 23. Plaintiff sought damages,
including liquidated and treble damages, from Defendants G.C.
of Capital Centre, LLC, and Both, Inc., (collectively
“Defendants”). On January 24, 2019, the parties
submitted a Joint Motion for Approval of Settlement Agreement
(“Joint Motion”), ECF No. 36. The parties'
settlement agreement (hereinafter the “Settlement
Agreement”) states that Defendants will pay Plaintiff a
total sum of $12, 500.00 in compensation for his claims.
However, due to Plaintiff's retainer agreement with his
counsel, $5, 643.00 of that will be paid to Plaintiff's
counsel as reimbursement for attorneys' fees and costs
incurred throughout these proceedings, leaving Plaintiff with
$6, 857.00. The Court has reviewed the Joint Motion, the
accompanying memorandum in support (hereinafter the
“Memorandum in Support”), and the applicable law.
No. hearing is deemed necessary. See Local Rule
105.6 (D. Md.). For the reasons that follow, the Court hereby
GRANTS the parties' Joint Motion without
modification as: (1) there exists a bona fide
dispute; (2) the settlement agreement is both fair and
reasonable under the Saman test; and, (3) while
there is a dearth of information by which to make the
assessment, the attorneys' fees agreed to appear
reasonable under Saman as they are in line with what
other cases have settled for, they represent a significant
reduction from what Plaintiff's counsel incurred while
prosecuting this case, and Plaintiff's retainer agreement
does not appear to permit him to agree to any other division
of damages. A separate Order shall issue.
A Bona Fide Dispute Exists
enacted the FLSA to protect workers from poor wages and long
hours, which are often the result of power imbalances between
workers and employers. Saman v. LBDP, Inc., No. Civ.
A. DKC-12-1083, 2013 WL 2949047, at *2 (D. Md. June 13,
2013). Even when parties submit a joint motion seeking
approval for a settlement agreement, the Court must undertake
a multi-step review of the agreement and any attorney's
fees requested to ensure its reasonableness. Id.
“[A]s a first step, the bona fides of the
parties' dispute must be examined to determine if there
are FLSA issues that are ‘actually in
dispute.'” Id. at *3 (citing Lane v.
Ko- Me, LLC, Civ. A. No. DKC-10-2261, 2011 WL 3880427,
at *2 (D. Md. Aug. 31, 2011) (citation omitted)).
bona fide dispute exists in this case. Plaintiff
commenced this proceeding on April 27, 2018. Pl.'s Compl.
ECF No. 1. Plaintiff was employed as a “server”
at Defendants' Golden Corral restaurant in Largo,
Maryland. Pl.'s Compl. ¶ 4. According to the
Complaint, Golden Corral is a “buffet-style
restaurant, where patrons do not order food, but rather
serve themselves from the buffet line.” Pls.'
Compl. ¶ 13. Plaintiff part-time worked as a server for
Defendants between June 2013 to December 2015 and May 2016
through October 2017. Pl.'s Compl. ¶ 15. Plaintiff
alleges that he earned approximately $3.63 to $4.00 per hour
and that “Defendants utilized a ‘tip credit'
in varying amounts for each hour worked by Plaintiff”
in an effort to comply with federal, state, and local minimum
wage laws. Pl.'s Compl. ¶¶ 16-19. However,
Plaintiff alleges that he was required to work more than
twenty percent (20%) of the time “performing non-tip
producing work”-such as wiping down tables and
restocking condiments-which prevented him from earning tips.
Pl.'s Compl. ¶ 21-29. As a result, Defendants failed
to pay him minimum wage. Pl.'s Compl. ¶ 20.
Plaintiff also asserted he was a part of a class of servers
all of whom were similarly situated. Pl.'s Compl.
¶¶ 31-43. Defendants denied all liability in their
response to the Complaint. Defs.' Answer, ECF No. 22.
Defendants asserted that at times servers would receive wages
“equal to or greater than” what is required by
federal, state, and local laws. Defs.' Answer 5-6.
Defendants made no admissions of liability with this
Settlement Agreement. See generally Mem. in Supp. In
fact, in the Memorandum in Support, Defendants argue that the
law has changed concerning the “tip credit”
maximum percentage restrictions such that Plaintiff's
allegations-even if true-do not constitute a violation of the
FLSA and other laws. Mem. in Supp. 2-4. Accordingly, the
parties were and remain at odds with one another in regard to
Plaintiff's compensation-or lack thereof-as an employee
The Settlement Agreement Passes the Saman
bona fide dispute exists, the next step in the
analysis is to assess the fairness and reasonableness of a
settlement agreement using the following factors:
(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 plaintiffs; (5) the opinions
of [ ] counsel ...; and (6) the probability of
plaintiffs' success on the merits and the amount of the
settlement in relation to the potential recovery.
Saman, 2013 WL 2949047, at *3 (quoting Lomascolo
v. Parsons Brinckerhoff, Inc., No. 08-cv-1310, 2009 WL
3094955, at *10 (E.D. Va. Sept. 28, 2009)).
the parties Memorandum in Support does not address all the
Saman factors, the Court still finds the Settlement
Agreement to be fair and reasonable as Plaintiff is
recovering a significant amount of money considering the fact
he was working part-time during the weeks in dispute and a
trial would have been tedious as he would have had to present
evidence to show he worked more than twenty percent (20%) of
the time doing non-tip producing work.
Extent of discovery
was no mention in the Joint Motion or the Memorandum in
Support of any discovery having taken place nor is there any
indication that any discovery took place from the docket.
Stage of the Proceedings
settlement comes only 10 months after the case was filed with
the Court. There is no indication from the Joint Motion or
the Memorandum in Support where in the course of litigation
this matter is.
Absence of Fraud or Collusion
is no evidence that the Settlement Agreement is the product
of fraud or collusion. “There is a presumption that no
fraud or collusion occurred between counsel, in the absence
of any evidence to the contrary.” Saman, 2013
WL 2949047, at *5 (quoting Lamscolo, 2009 WL
3094955, at 12). Here, even with this settlement, the parties
remain at odds over whether Plaintiff is owed anything or
would prevail at trial. See Mem. in Supp. 2-5.
Further, Defendants are confident they would prevail at
trial-and Plaintiff appears to agree there is a risk that he
would lose. Mem. in Supp. 2-5. For Plaintiff, he will be
recovering some amount of the wages he alleges he is owed and
Defendants are avoiding the cost and uncertainty of a trial
to prove their position. Mem. in Supp. 2-5. Accordingly, the
Settlement Agreement appears to be mutually beneficial but
not the product of fraud or collusion.