United States District Court, D. Maryland, Southern Division
CHARLES B. DAY UNITED STATES MAGISTRATE JUDGE
Amy Alloways (“Alloways”), Michele Higginson
(“Higginson”), and Christy McGee
(“McGee”) (hereinafter collectively
“Plaintiffs”), on behalf of themselves and other
similarly situated individuals, brought suit against
Defendant The Cruise Web, Inc. (“Defendant”),
alleging violations 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., for failure to pay
minimum wage and overtime compensation. Pls.' Class &
Collective Compl. for Wages Owed (“Pls'
Compl.”), ECF No. 1. Plaintiffs brought these claims as
a collective action under the FLSA, 29 U.S.C. § 216(b),
and as a class action under Federal Rule of Civil Procedure
23. Plaintiffs sought damages from Defendant, including
liquidated and treble damages. On February 22, 2018, the
Court approved the parties' Stipulation and Joint Motion
Regarding Conditional Certification, which conditionally
certified the case as a collective class action under the
FLSA. See Paperless Order Approving Parties'
Stipulation & Joint Mot. Regarding Conditional
Certification, Messitte, J., ECF No. 21; Findings of Fact
& Conclusions of Law & Order Approving Conditional
Certification of Class (“Order Approving Conditional
Certification of Class”), ECF No. 23. Plaintiffs and
Defendant eventually reached a settlement, and on October 26,
2018, Plaintiffs filed an unopposed motion seeking
preliminary approval of the parties' agreement. Pls.'
Unopposed Mot. for Preliminary Approval of the Class Action
Settlement & Unopposed Mot. to Approve Settlement
Agreement & Release of Wage Claims Under Fed. & Md.
Law (“Pls.' Unopposed Mot. for Preliminary
Approval”), ECF No. 46. Attached to that motion as an
exhibit was a copy of the settlement agreement. Class Action
Settlement Agreement (“Settlement Agreement”),
ECF No. 46-3. After a telephone conference, this Court
granted the parties' motion. Paperless Order Granting
Mot. for Settlement (“Preliminary Approval
Order”), Day, J., Dec. 20, 2018, ECF No. 48.
pending before the Court is Plaintiffs' Unopposed Motion
for Final Approval of the Class/Collective Action Settlement
(“Pls.' Unopposed Mot. for Final Approval”),
ECF No. 50. Plaintiffs seek an order that: (1) grants final
approval of the Settlement Agreement between Plaintiffs and
Defendant in the total gross amount of $60, 000.00; (2)
grants final certification of the settlement class pursuant
to Federal Rule of Civil Procedure 23; (3) grants final
certification of this matter as a collective action pursuant
to 29 U.S.C. § 216(b); (4) approves a payment of $32,
000.00 to class counsel for their attorneys' fees and
litigation expenses; (5) approves an incentive payment
totaling $6, 000.00 to be divided as outlined in the
Settlement Agreement to Plaintiffs McGhee, Alloways,
Higginson, and Derek Cade; and, (6) dismisses this action with
prejudice. Pursuant to Federal Rule of Civil Procedure 23(f),
a Final Fairness and Approval Hearing (“Fairness
Hearing”) took place on March 4, 2019, at which counsel
for both parties were present. ECF No. 51. At the request of
the Court, the parties each submitted supplemental filings
with additional information necessary to make a determination
on this matter. See Def.'s Supplemental
Statement in Supp. of Unopposed Mot. for Final Approval, Mar.
4, 2019, ECF No. 52; Pls.' 2d Supplement in Supp. of
Their Unopposed Mot. for Final Approval, Mar. 5, 2019, ECF
reasons that follow, the Court hereby GRANTS
Plaintiff's Unopposed Motion, APPROVES
the parties' Settlement Agreement without modification,
and orders this case be DISMISSED WITH
PREJUDICE. A separate Order shall issue.
September 20, 2017, Plaintiffs commenced this proceeding
against Defendant alleging the commission payment plan used
by Defendant to compensate Plaintiffs violated the FLSA,
MWHL, and MWPCL. Pls.' Compl. ¶¶ 98-165.
Defendant is a for-profit travel agency that
“specializes in planning cruises.” Id.
at ¶¶ 4-9, 33. The named Plaintiffs and members of
the proposed class all worked as “cruise
consultants” (“Cruise Consultant(s)”) for
Defendant. Id. at ¶ 10. The job of a Cruise
Consultant was to provide booking and customer support
services to prospective clients seeking to reserve a cruise
through Defendant's company. Id. at ¶¶
38-50, 56. This involved cold calling, returning messages,
data entry, completing and compiling paperwork, and other
administrative tasks. Id. All the tasks for a
particular reservation had to be completed within a
twenty-four-hour window or it would be considered
“late” and the Cruise Consultant could face
“repercussions.” Id. at ¶ 50.
Defendant controlled the hours worked by each Cruise
Consultant by managing their schedules, determining the
number of Cruise Consultants it would employ, and setting
“strict protocols” it expected to be followed at
all times. Id. at ¶¶ 57-69.
to Plaintiffs, this job was time consuming and often resulted
in Cruise Consultants “regularly work[ing] through
their entire shifts without a break” as well as
“well past the times their shifts were scheduled to
end” in order to complete tasks within the timeframe
Defendant expected. Id. at ¶¶ 50-59. There
were also “simply not enough employees to handle all of
the work.” Id. at ¶ 58. According to
Plaintiffs, Defendant was “well aware” of the
situation but was more concerned about its customers than its
employees. Id. at ¶¶ 59, 61.
compensated its Cruise Consultants according to a commission
payment plan.Id. at ¶¶ 74, 83. For
the first six (6) months of their employment, each Cruise
Consultant was in a training period and compensated according
to the “Training Period Commission Plan.”
Id. at ¶ 74. Under this plan, Cruise
Consultants received the same set amount of pay on a
bi-weekly basis regardless of the number of sales they made.
Id. If they exceeded their sales expectations, a
Cruise Consultant was supposed to receive a percentage of
“all net agency commissions” as a commission paid
out at the end of the training period. Id. at ¶
75. According to Plaintiffs, while some Cruise Consultants
received a commission at the end of the training period, it
did not exceed fifty percent (50%) of their pay. Id.
at ¶ 77. As a result of this payment plan and the number
of hours each individual worked, Plaintiffs asserted that
they were entitled to overtime in accordance with the FLSA
and Maryland law. Id. at ¶ 81.
December 18, 2017, Defendant filed an answer that denied
Plaintiffs' allegations that it had knowingly violated
the FLSA and Maryland's wage and hour laws. Def.'s
Answer, ECF No. 11. Defendant also asserted a number of
defenses. Id. at 15-19. These included the defense
that, due to its commission payment plans, Plaintiffs were
barred from bringing this suit as they were “exempt
from overtime ” pursuant to Section 7(i) of the
and the related provision under Maryland law. Id. at
same day, Plaintiffs filed a motion to obtain conditional
class certification under the FLSA. Mot. for Conditional
Certification of a Collective Class, ECF No. 10. Before the
Court could rule on the motion, the parties filed a
stipulation in which they agreed to the parameters of the
proposed class in order “[t]o avoid the expense
associated with motion practice at the preliminary stage of
conditional certification, and to allow putative class
members to make an informed decision regarding whether to
join [the] lawsuit on a conditional basis . . . .”
Stipulation & J. Mot. Regarding Conditional Certification
¶ 3, Dec. 22, 2017, ECF No. 14. After a telephone
conference and additional materials were submitted, the
Honorable Peter J. Messitte issued an order approving
conditional certification of the class under the FLSA only
and made certain findings of fact and conclusions of law.
See Order Approving Conditional Certification of
Class. This order conditionally certified the putative class
as “[C]ruise [C]onsultants who participated in
Defendant's training period pay plan” during the
period in question (“the Collective Settlement
Class”). See Id. (noting the similarities
between the putative class members and
“incorporate[ing] by reference the terms and conditions
of the [p]arties' Stipulation”). The parties also
agreed to a 60-day opt-in period, which closed on May 21,
2018. Joint Status Report & Request for Early Settlement
Conference (“May 24 Joint Status Report”) ¶
3, May 24, 2018, ECF No. 34. During that time, seven
additional former employees filed consents to join the
and Defendant eventually reached a Settlement Agreement, and
on October 26, 2018, Plaintiffs filed an unopposed motion
seeking preliminary approval of their Settlement Agreement.
See Pls.' Unopposed Mot. for Preliminary
Approval. The Settlement Agreement contemplates certification
of a settlement class consisting of 54 individuals who worked
for Defendant as Cruise Consultants during the period in
question. Settlement Agreement 17-18. In very basic terms,
the Settlement Agreement requires Defendants to pay a maximum
amount of $60, 000.00 to be divided as follows: (1) $11,
000.00 for unpaid wages to be divided among the participating
class members; (2) $11, 000.00 for liquidated damages to be
divided among the participating class members; (3) $6, 000.00
total for incentive payments to be divided among Plaintiff
Alloways ($2, 000.00), Plaintiff McGhee ($2, 000.00),
Plaintiff Higginson ($1, 000.00), and Plaintiff Cade ($1,
000.00); and (4) $32, 000.00 in attorneys' fees and
expenses to be paid to class counsel and (where applicable)
to each participating class member. Id. at 6. The
amount of unpaid wages and liquidated damages each class
member would be entitled to would be calculated individually.
Id. This matter was then referred to the undersigned
for all further proceedings. After a telephone conference,
the Court issued an order granting the motion and
preliminarily approving the Settlement Agreement. The
Preliminary Approval Order conditionally certified the
following class pursuant to Federal Rule of Civil Procedure
23(a)(1)-(4) and 23(b) (the “Rule 23 Settlement
Every Cruise Consultant who participated in Defendant's
training period commission pay plan at any time between
September 21, 2014 and February 22, 2018.
Preliminary Approval Order appointed Plaintiffs Alloways,
Higginson, and McGee as class representatives. The
Preliminary Approval Order also appointed The Law Offices of
Peter T. Nicholl as class counsel and RG/2 Claims
Administration LLC (“RG/2 Claims”) as claims
administrator. Finally, the Preliminary Approval Order
approved the notice forms provided by the parties; instructed
the parties to comply with the notice protocols set forth in
the Settlement Agreement; and set a date for the Fairness
February 25, 2019, Plaintiffs filed their Unopposed Motion
for Final Approval. The Fairness Hearing was held on March 3,
2019, at 10:00 a.m., after which the parties submitted
supplemental information as requested by the Court.
See Def.'s Supplemental Statement in Supp. of
Unopposed Mot. for Final Approval; Pls.' 2d Supplement in
Supp. of Their Unopposed Mot. for Final Approval.
carefully considering the terms of the Settlement Agreement,
Plaintiffs' Unopposed Motion for Final Approval, the
supplemental materials in support thereof, and the statements
of counsel for both parties at the Fairness Hearing held on
March 3, 2019, the Court now addresses whether the proposed
class should receive final certification; whether the
Settlement Agreement is fair, reasonable, and adequate;
whether the Settlement Agreement represents a fair compromise
of a bona fide FLSA dispute; and whether class
counsel's request for attorneys' fees and costs, as
well as an incentive payment for certain individual
plaintiffs, should be granted. Each of these issues will be
addressed in turn.
Final Certification of the Settlement Class
seeking approval of the proposed Settlement Agreement, the
parties are resolving a “hybrid wage-and-hour law
case” due to the combination of collective action
claims raised under the FLSA and state law claims brought as
a class action under Federal Rule of Civil Procedure 23
(“Rule 23”). See Edelen v. Am. Residential
Servs., LLC, No. Civ. A. DKC 11-2744, 2013 WL 3816986,
at *3 (D. Md. July 22, 2013); see also Shaver v. Gills
Eldersburg, Inc., Civ. No. 14-3977-JMC, 2016 WL 1625835,
at *1 (D. Md. Apr. 25, 2016). As a result, this Court must
assess the request for final class certification under two
separate standards. See Edelen, 2013 WL 3816986, at
Certification of the Collective Settlement
the FLSA, plaintiffs may maintain a collective action against
their employer for violations under the act pursuant to 29
U.S.C. § 216(b).” Quinteros v. Spark le
Cleaning, Inc., 532 F.Supp.2d 762, 771 (D. Md. 2008).
The statute provides in relevant part:
An action . . . may be maintained against any employer . . .
in any Federal or State court of competent jurisdiction by
any one or more employees for and in behalf of himself or
themselves and other employees similarly situated. No.
employee shall be a party plaintiff to any such action unless
he gives his consent in writing to become such a party and
such consent is filed in the court in which such action is
U.S.C. § 216(b). This requirement that potential
plaintiffs provide the court with their affirmative consent
to be a part of the suit is known as “an
‘opt-in' scheme.” Edelen, 2013 WL
3816986, at *3 (citing Quinteros, 532 F.Supp.2d at
771). Determining whether to certify a collective action
under the FLSA is a two-stage process. Id. (citing
Syrja v. Westat, Inc., 756 F.Supp.2d 682, 686 (D.
Md. 2010). Stage one requires “a ‘threshold
determination' [ ] be made regarding ‘whether the
plaintiffs have demonstrated that potential class members are
similarly situated, such that court-facilitated notice to the
putative class members would be appropriate.”
Id. (quoting Syria, 756 F.Supp. at 686)
(internal quotation marks omitted); see also Shaver,
2016 WL 1625835, at *2 (“Preliminary approval should be
granted when a proposed settlement is ‘within the range
of possible approval,' subject to further consideration
after a final fairness hearing . . . .”).
Judge Messitte issued an order finding that Plaintiffs
“made the required ‘modest factual showing'
that they are ‘similarly situated' to other cruise
consultants working for Defendant during their six-month
training periods.” Order Approving Conditional
Certification of Class ¶ 7. This conditional
certification was “limited to Plaintiffs'
allegation that Defendant's Training Period Commission
Plan violates the FLSA.” Id. at ¶ 7 n.2.
Accordingly, Plaintiffs have meet the requirements of the
first stage of the evaluation for final approval of their
Collective Settlement Class.
second stage of the evaluation requires “a ‘more
stringent inquiry' . . . to determine whether the
plaintiffs are, in fact, ‘similarly situated' . . .
.” Edelen, 2013 WL 3816986, at *4 (citing
Rawls v. Augustine Home Health Care, Inc., 244
F.R.D. 298, 300 (D. Md. 2007)). Even in situations where
settlement agreements have been made, the court must still
make a final determination on whether to certify the class.
See Id. In doing so, courts consider a variety of
factors, including: “(1) the disparate factual and
employment settings of the individual plaintiffs; (2) the
various defenses available to [the] defendant which appear to
be individual to each plaintiff; and (3) fairness and
procedural considerations.” Rawls, 244 F.R.D.
at 300 (internal quotation marks omitted) (discussing the
“decertification” process). Due to the overlap
between class certifications under Rule 23 of the Federal
Rules of Civil Procedure, “these factors need only be
‘address[ed] . . . in passing.'”
Edelen, 2013 WL 3816986, at *4 (citations omitted).
the claims of each member of the Collective Settlement Class
have the same factual underpinning. Each member was employed
in the same position (Cruise Consultant) and went through the
same training period, during which they were allegedly
compensated by the same commission payment plan. The class as
a whole is therefore “similarly situated” to the
representative Plaintiffs. Additionally, Defendant has not
raised any defenses that are individualized in nature.
See Def.'s Answer 16-19. “In any event,
individualized defenses typically raise concerns because they
pose case management problems; such complications are largely
irrelevant where a collective class is being certified for
settlement purposes.” Edelen, 2013 WL 3816986,
at *5 (citing Amchem Prods., Inc. v. Windsor, 521
U.S. 591, 620 (1997)). Finally, with respect to fairness, a
settlement resolving the FLSA claims of all Cruise
Consultants who went through the six-month training period is
an effective and efficient means of resolving the common
issue of the legality of the Defendant's commission
the Court finds that Plaintiffs are similarly situated to the
members of the Collective Settlement Class and, accordingly,
final certification pursuant to Section 216(b) of the FLSA is
Rule 23 Class Certification
as a class action under Rule 23 is also a two-stage process:
a class must meet the four prerequisites under Rule 23(a) and
fall within one of the three subdivisions of Rule 23(b).
Calderon v. GEICO Gen. Ins. Co., 279 F.R.D. 337,
345-46 (D. Md. 2012). When parties seek to settle a case on
behalf of a Rule 23 certified class, the court is required to
“‘pay undiluted, even heightened attention'
to class certification requirements . . . .”
Edelen, 2013 WL 3816986, at *5 (citing Amchem
Prods., 521 U.S. at 620 (internal quotation marks
omitted)). This Court has already preliminarily approved the
certification of the proposed Rule 23 Settlement Class.
See Preliminary Approval Order. Accordingly, it will
now consider the proposed Rule 23 Settlement Class with
heightened attention to the requirements laid out in Rule 23.
Rule 23(a) Prerequisites
Federal Rule of Civil Procedure 23(a),
One or more members of a class may sue . . . as
representative parties on behalf of all members only if: (1)
the class is so numerous that joinder of all members is
impracticable; (2) there are questions of law or fact common
to the class; (3) the claims or defenses of the
representative parties are typical of the claims or defenses
of the class; and (4) the representative parties will fairly
and adequately protect the interests of the class.
Calderon, 279 F.R.D. at 345 (citing Fed.R.Civ.P.
23(a)). Based on a review of the parties' submissions and
counsel's representations during the Fairness Hearing,
the Court finds the Rule 23 Settlement Class meets the
numerosity, commonality, typicality, and adequacy
prerequisites of Rule 23(a).
inquiry of numerosity is not simply one of numbers as there
is no set threshold by which a class is deemed numerous
enough to meet this first requirement. See Edelen,
2013 WL 3816986, at *5. Rather, the inquiry must look to
whether it would be “impracticable” to join each
individual member's case. Craighead v. Full
Citizenship of Maryland, Inc., No. CV PX-17-595, 2018 WL
3608743, at *2 (D. Md. July 27, 2018) (citation omitted). In
making this determination, the court considers factors such
as “the possible geographic disbursal of the claimants,
the small size of individual ...