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Hickman v. G.C. of Capital Centre, LLC

United States District Court, D. Maryland, Southern Division

February 27, 2019

G. C. OF CAPITAL CENTRE, LLC, et al., Defendants.



         Plaintiff 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”).[1] 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.[2] A separate Order shall issue.

         I. Analysis

         A. A Bona Fide Dispute Exists

         Congress 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)).

         A 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 of Defendants.

         B. The Settlement Agreement Passes the Saman Test

         If a 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)).

         While 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.

         1. Extent of discovery

         There 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.

         2. Stage of the Proceedings

         This 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.

         3. Absence of Fraud or Collusion

         There 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.

         4. ...

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