United States District Court, D. Maryland
Deborah K. Chasanow, United States District Judge.
parties in this employment case filed a motion for
appropriate relief on November 23, 2018 (ECF No. 26) and a
joint motion to approve settlement on May 13, 2019 (ECF No.
37). The motion to approve settlement states that, upon court
approval, Defendants Pho Eatery, Inc. and Tim Do
(collectively, “Defendants”) will pay Plaintiff
Jose Santos Amaya Diaz (“Plaintiff”) $11, 000 in
“gross pay.” (ECF No. 37-1, at 3). Defendants
will also pay Plaintiff's attorneys $1, 356.63 for costs.
(Id., at 2). The issues have been briefed, and the
court now rules, no hearing being deemed necessary. Local
Rule 105.6. Because the proposed settlement agreement
represents a fair and reasonable resolution of a bona
fide FLSA dispute, the settlement will be approved and
Plaintiff's motion for appropriate relief will be denied
filed a complaint against Pho Eatery, Inc., Tim Do, Oanh
Nguyen, and Quynh Vu on October 6, 2017 alleging four counts:
(1) violation of the Fair Labor Standards Act
(“FLSA”); (2) violation of the Maryland Wage and
Hour Law (“MWHL”); (3) violation of the Maryland
Wage Payment and Collection Law (“MWPCL”); and
(4) violation of the Montgomery County Code § 27-68.
(ECF No. 1, at 7-13). Defendant Pho Eatery, Inc. filed an
answer and Defendants Do, Nguyen, and Vu filed a motion to
dismiss for failure to state a claim and lack of jurisdiction
on February 8, 2018. (ECF Nos. 6 & 7). Plaintiff filed an
amended complaint on March 10, 2018 without consent or leave
of court which omitted the individual Defendants. (ECF No.
11). Consequently, individual Defendants Do, Vu and Nguyen
were dismissed and Defendants' motion to dismiss was
denied as moot on April 3, 2018. (ECF No. 12). The parties
filed a joint request for settlement conference on April 17,
2018 (ECF No. 13) and the case was referred to Magistrate
Judge Charles Day on April 18, 2018 for alternative dispute
resolution (ECF No. 14).
filed a second amended complaint on June 4, 2018, once again
naming Tim Do as a Defendant. (ECF No. 18). The parties held
a settlement conference before Judge Day on July 10, 2018.
The discovery period closed on November 26, 2018 and the
parties filed a joint status report indicating that discovery
was “substantially completed.” (ECF No. 27, at
1). The parties held a second, more fruitful settlement
conference on April 5, 2019. Although they did not submit a
written settlement agreement to the court, the joint motion
sets forth the significant terms.
to Plaintiff's second amended complaint, Defendants
employed Plaintiff “from 2013 until approximately
January 6, 2017 as a non-exempt food preparation employee
primarily at its Gaithersburg, Maryland Location . . . and
occasionally at its Rockville  location[.]” (ECF No.
18, at 4). Plaintiff asserts that, from June 1, 2015 until
the end of his employment, he “generally worked 60-72
hours per week” and “Defendants failed to pay
[him] the required wage of 150% of his regular pay . . . for
all hours worked in excess of 40 hours per week[.]”
(Id., at 5-6). Plaintiff adds that “Defendants
failed to pay the full minimum wage of $10.75” per hour
after Maryland increased the minimum wage to that rate
effective October 1, 2016. (Id., at 6). Finally,
Plaintiff claims that Defendants failed to provide him
vacation time over a three-year period, totaling $2, 400.00.
(Id., at 7). As a result, Plaintiff seeks entry of
judgment “against Defendants in the amount of $48,
372.00, representing base wages of $16, 124.00 unpaid[, ]
plus statutory treble damages of an additional $32, 248.00,
plus interest, costs and attorneys' fees as authorized by
statute or rule.” (Id., at 13).
Joint Motion to Approve Settlement
Congress enacted the FLSA to protect workers from the poor
wages and long hours that can result from significant
inequalities in bargaining power between employers and
employees, the provisions of the FLSA are mandatory and,
except in two narrow circumstances, are generally not subject
to bargaining, waiver, or modification by contract or
settlement. See Brooklyn Sav. Bank v. O'Neil,
324 U.S. 697, 706-07 (1945). Under the first exception, the
Secretary of Labor may supervise the payment of back wages to
employees, who waive their rights to seek liquidated damages
upon accepting the full amount of the wages owed.
See 29 U.S.C. § 216(c). Under the second
exception, a district court can approve a settlement between
an employer and an employee who has brought a private action
for unpaid wages pursuant to Section 216(b), provided 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.
United States, 679 F.2d 1350, 1354
(11th Cir. 1982); see also Duprey v. Scotts
Co., 30 F.Supp.3d 404, 407 (D.Md. 2014).
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, 30 F.Supp.3d at 407-08; Lopez v. NTI,
LLC, 748 F.Supp.2d 471, 478 (D.Md. 2010). 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
(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 Restaurant Invs., 259 F.Supp.3d 360,
365 (D.Md. 2016) (quoting Saman v. LBDP, Inc.,
DKC-12-1083, 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. DKC-10-2261, 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 settlement agreement.”
Duprey, 30 F.Supp.3d at 408. As already explained,
Plaintiff's second amended complaint alleges that
Defendants committed a litany of wage violations.
Defendants' answers to Plaintiff's second amended
complaint deny Plaintiff's allegations, indicating that
the parties differ in their view of the amount of
compensation Plaintiff was owed and whether he received
vacation pay. (See ECF Nos. 20 & 21).
Additionally, the parties' memorandum in support of
motion to approve settlement agreement states that the
1) precisely how many hours and weeks Plaintiff worked during
the relevant period; 2) the effective hourly rate for
Plaintiff as calculated over the disputed hours; 3) the lack
of strict uniformity in hours over the roughly 18-month
period from approximately July 1, 2015 until early January
2017[;] 4) the issue of whether the [MWPCL] applied to
Plaintiff's claims, and, if so, whether wages had been
withheld as a result of a bona fide dispute within the
meaning of the [MWPCL]; 5) whether Defendants acted willfully
or recklessly of their obligations under the FLSA;  6)
whether the Defendants  acted reasonably and in good faith
for purposes of potential defenses to a liquidated damages