United States District Court, D. Maryland
TYLER JOHNSON, et al., Individually and on behalf of similarly situated employees
HELION TECHNOLOGIES, INC.
DEBORAH K. CHASANOW UNITED STATES DISTRICT JUDGE
pending and ready for resolution in this employment
collective action is the joint motion for approval of
acceptance of offer of judgment and entry of judgment filed
by Defendant Helion Technologies, Inc., and Plaintiff Matt
Willis. (ECF No. 34). The issues have been briefed, and the
court now rules, no hearing being deemed necessary. Local
Rule 105.6. Because the proposed offer and acceptance of
judgment represent a fair and reasonable resolution of a
bona fide FLSA dispute, the motion will be granted.
Tyler Johnson and William Toomey, filed a complaint on behalf
of themselves and those that are similarly situated on
October 23, 2018. (ECF No. 1). The complaint alleges that
Defendant “improperly classified them as exempt
employees and/or failed to pay them 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
Ann., Lab. & Empl. § 3-401, et seq., and
the Maryland Wage Payment and Collection Law
(“MWPCL”), Md. Code, LE § 3-501 et
seq. (ECF No. 34-1, at 2; ECF No. 1). Plaintiff, Matt
Willis, filed a notice of consent to become a party-plaintiff
on October 24, 2018. (ECF No. 3).
December 14, 2018, Helion's counsel sent to Mr.
Willis' counsel an Offer of Judgment to be presented to
Mr. Willis[.]” (ECF No. 34-1, at 2). The offer proposed
“to allow judgment to be entered against Defendant, and
in favor of Plaintiff Willis, in the total amount of $5,
700.00, exclusive of attorneys['] fees and
costs[.]” (ECF No. 34-2, at 4). “On December
27, 2018, Mr. Willis, through his counsel, informed
Helion's counsel that he had decided to accept the
Offer.” (ECF No. 34-1, at 2). “Thereafter, the
Parties . . . determined that $6, 112.00 is an appropriate
amount of attorneys' fees and costs to allocate to work
performed for Mr. Willis in this matter by his
counsel.” (Id.). “Based on that
determination, ” (ECF No. 34-1, at 2) Plaintiff Willis
accepted the Rule 68 offer on February 5, 2019, (ECF No.
Hazel outlined the proper interplay between the FLSA and Rule
68 in Banegas v. Gen. Lawn Serv. Corp., No.
13-cv-3728-GJH, 2014 WL 12740666, at *1 (D.Md. July 17,
Federal Rule of Civil Procedure 68(a) instructs the court to
enter judgment after receiving an accepted offer of judgment.
However, the [FLSA] . . . does not permit settlement or
compromise except with (1) supervision by the Secretary of
Labor or (2) a judicial finding 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.”
Lynn's Food Stores, Inc. v. U.S., 679 F.2d 1350,
1354 (11th Cir. 1982); see also Lopez v. NTI,
LLC, 748 F.Supp.2d 471 (D.Md. 2010) (explaining that
courts assess FLSA settlements for reasonableness).
Accordingly, the FLSA modifies Rule 68(a) such that in claims
filed under the FLSA, the court will enter judgment when
presented with an offer and acceptance only after the court
is satisfied that the settlement is a reasonable compromise.
Accord Umana v. JMD Restaurants, Inc., No.
18-cv-290-PX, 2018 WL 4829178, at *1 (D.Md. Oct. 4, 2018);
Acevedo v. Phoenix Pres. Grp., Inc., No.
13-cv-3726-PJM, 2015 WL 6004150, at *2 (D.Md. Oct. 8, 2015);
Reyes v. Clime, No. 14-cv-1908-PWG, 2015 WL 3644639,
at *4 (D. Md. June 8, 2015).
the United States Court of Appeals for the Fourth Circuit has
not directly addressed the factors to be considered in
deciding whether to approve such settlements, district courts
in this circuit typically employ the considerations set forth
by the United States Court of Appeals for the Eleventh
Circuit in Lynn's Food Stores.
See, e.g., Duprey v. Scotts Co.
LLC, 30 F.Supp.3d 404, 407-08 (D.Md. 2014);
Lopez, 748 F.Supp.2d at 478. An FLSA settlement
generally should be approved if it reflects “a fair and
reasonable resolution of a bona fide dispute over
FLSA provisions.” Lynn's Food Stores, 679
F.2d at 1355. Thus, as 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 1354. Then, as a
second step, the terms of the proposed settlement agreement
must be assessed for fairness and reasonableness, which
requires weighing a number of factors, including:
(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.
Hackett v. ADF Rest. Investments, 259 F.Supp.3d 360,
365 (D. Md. 2016) (quoting Saman v. LBDP, Inc., No.
12-cv-1083-DKC, 2013 WL 2949047, at *3 (D.Md. June 13,
2013)); see also Duprey, 30 F.Supp.3d at 408, 409.
Finally, where a proposed settlement of FLSA claims includes
a provision regarding attorneys' fees, the reasonableness
of the award must also “be independently assessed,
regardless of whether there is any suggestion that a
‘conflict of interest taints the amount the wronged
employee recovers under a settlement agreement.'”
Lane v. Ko-Me, LLC, No. 10-cv-2261-DKC, 2011 WL
3880427, at *3 (Aug. 31, 2011) (citation omitted).
Bona Fide Dispute
deciding whether a bona fide dispute exists as to a
defendant's liability under the FLSA, courts examine the
pleadings in the case, along with the representations and
recitals in the proposed [ ] agreement.”
Duprey, 30 F.Supp.3d at 408. Here, there is a
bonda fide dispute. Plaintiff Willis “filed a
notice of consent, alleging that Helion owed him overtime
compensation.” (ECF Nos. 34-1, at 4; 3). Helion alleges
that it “reviewed its internal records and determined
that [it] . . . did not owe Mr. Willis overtime compensation
and that, even ...