Beltran v. Noonan et al

Filing 1258

ORDER: MOTION To INTERPRET CLASS ACTION SETTLEMENT 1250 is GRANTED. the Court finds that: the language of the Beltran Settlement Agreement bars Beltran class members from bringing state law, FLSA, and TVPRA claims arising out of au pair employmen t prior to the July 18, 2019 Effective Date against Sponsor Defendants; however, claims against host families pursuant to the TVPRA fall within the exception to Beltran Settlement Agreements Release, and are therefore not barred by the Beltran Settlement Agreement. The Clerk of Court is directed to close this case. SO ORDERED by Senior Judge Christine M. Arguello on 2/23/2023. (sphil, )

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Senior Judge Christine M. Arguello
Civil Case No. 14-cv-03074-CMA
JOHANA PAOLA BELTRAN,
LUSAPHO HLATSHANENI,
BEAUDETTE DEETLEFS,
ALEXANDRA IVETTE GNZALEZ,
JULIANE HARNING,
NICOLE MAPLEDORAM,
LAURA MEJIA JIMENEZ,
SARAH CAROLINA AZUELA RASCON,
CATHY CARAMELO,
LINDA ELIZABETH,
GABRIELA PEREZ REYES,
and those similarly situated,
v.

Plaintiffs,

INTEREXCHANGE, INC.,
USAUPAIR, INC.,
GREATAUPAIR, LLC,
EXPERT GROUP INTERNATIONAL INC., d/b/a Expert AuPair,
EURAUPAIR INTERCULTURAL CHILD CARE PROGRAMS,
CULTURAL HOMESTAY INTERNATIONAL,
CULTURAL CARE, INC., d/b/a Cultural Care Au Pair,
AUPAIRCARE INC.,
AU PAIR INTERNATIONAL, INC.,
APF GLOBAL EXCHANGE, NFP, d/b/a Aupair Foundation,
AMERICAN INSTITUTE FOR FOREIGN STUDY, d/b/a Au Pair in America,
ASSOCIATES IN CULTURAL EXCHANGE, d/b/a GoAuPair,
AMERICAN CULTURAL EXCHANGE, LLC, d/b/a GoAuPair,
GOAUPAIR OPERATIONS, LLC, d/b/a GoAuPair,
AGENT AU PAIR;
A.P.EX. AMERICAN PROFESSIONAL EXCHANGE, LLC, d/b/a ProAuPair, and
20/20 CARE EXCHANGE, INC., d/b/a the International Au Pair Exchange,
Defendants.

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______________________________________________________________________
ORDER GRANTING CLASS COUNSEL’S
MOTION TO INTERPRET CLASS ACTION SETTLEMENT
_____________________________________________________________________
This matter is before the Court on Class Counsel’s “Motion for Interpretation of
Class Action Settlement.” (Doc. # 1250.) For the following reasons the Court finds that
the Beltran Class Action Settlement precludes subsequent claims by class members
against Defendants and host families arising out of class members’ au pair service prior
to July 18, 2019, that relate to the wages, contracts, and host family obligations under
the federal regulations. However, the Court finds that the Settlement does not preclude
claims of forced labor and trafficking only to the extent they are brought against host
families.
I.
A.

BACKGROUND

THE AU PAIR PROGRAM
The au pair program, operated by the Department of State (“DOS”), provides

foreign nationals between the ages of 18 and 26 with a one-year “opportunity to live with
an American host family and participate directly in the home life of the host family”
principally through the provision of childcare. 22 C.F.R. § 62.31(a), (c)(1), (d). DOS
designates certain entities to act as sponsor agencies, the exclusive entities authorized
to recruit and place au pairs with host families in the United States. Id. § 62.31(c). In
exchange for 45 hours of childcare per week, regulations require host families to
provide au pairs with room and board, access to six semester hours of formal education
credit, two-weeks paid vacation, and “a weekly [pay] rate . . . paid in conformance with

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the requirements of the Fair Labor Standards Act [(“FLSA”)] as interpreted and
implemented by the United States Department of Labor.” Id. § 62.31(c)(2), (e)(6), (j)(1),
(j)(4), (k)(1). The sponsor agencies are responsible for ensuring various conditions of
employment, including but not limited to that host families are capable of and do meet
various requirements, that au pairs are compensated in compliance with labor laws, and
that au pairs do not work beyond specific limitations related to hours and duties. Id. §
62.31(e), (h), (j).
B.

THE BELTRAN LITIGATION
In 2014 Plaintiffs, former au pairs, initiated litigation (the “Beltran Litigation”) in

this Court on behalf of themselves and all those similarly situated, against the
designated sponsor organization Defendants. (Doc. # 1.) One host family, Pamela H.
Noonan and Thomas J. Noonan (“the Noonans”), was named in the First Amended
Complaint. See generally (Doc. # 101.) However, Plaintiffs and the Noonans stipulated
to the voluntary dismissal of the Noonans in April of 2015. (Doc. # 118.)
In their operative Complaint, Plaintiffs alleged that sponsor organization
Defendants (“Sponsors” or “Sponsor Defendants”) conspired and agreed to set all au
pair weekly wages at the purported minimum of $195.75 per week despite applicable
regulations that required au pairs receive not less than minimum wage. (Doc. # 983 at
¶¶ 76–150.) Based on these factual allegations, the Beltran Plaintiffs asserted federal
claims under the Sherman Antitrust Act, 15 U.S.C. § 1, et seq., the Racketeer
Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1964, et seq., and the
FLSA, as well as state law claims based on Breach of Fiduciary Duty, Negligent

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Misrepresentation, Constructive Fraud or Fraudulent Concealment, Consumer
Protection laws, Unpaid Wages, and various state wage and hour laws. (Id. at ¶¶ 589–
648.)
Although no host families were named as Defendants, the operative Complaint
included factual allegations related to Named Class Plaintiff Johana Paola Beltran’s
experience as an au pair sponsored by Defendant Sponsor InterExchange, Inc. and
working for the Noonans. (Id. at ¶¶ 365–96.) The operative Complaint also includes
factual allegations related to each of the other Named Class Plaintiffs’ experiences as
au pairs sponsored by other Sponsor Defendants and working for other host families.
(Id. at ¶¶ 354–427.) The Complaint details allegations by each of the Named Class
Plaintiffs that Sponsors required them to attend three days to a week of unpaid
childcare training and host families paid them the program’s floor of $195.75 per week.
(Id. at ¶¶ 376–79, 392, 404–07, 409, 412, 422–24, 427–29, 443–45, 450, 458–59, 461,
477–78, 480–81, 484, 491, 494, 504, 508–09, 515, 517, 522, 524, 529–34, 538.) For
Ms. Beltran and seven other Named Class Plaintiffs, the Complaint also makes factual
allegations regarding abuses by host families including, requiring au pairs to do
housework beyond the limitations of the program, requiring au pairs to work more than
the 45 hour-limitation imposed, limiting their meals or access to food, isolating them,
and verbally attacking and threatening them. (Id. at ¶¶ 386–92, 430, 447, 464–66, 482,
495, 502–03, 525.)
In June 2017 and February 2018, this Court granted the Beltran Plaintiffs
collective actions status for purposes of the FLSA, and class action status pursuant to

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Federal Rule of Civil Procedure 23, respectively. (Docs. ## 569, 828.) The Court
established 18 classes and subclasses including the “Antitrust Class,” defined as “[a]ll
persons sponsored by any [Sponsor] Defendant to work as a standard au pair in the
United States pursuant to a J-1 Visa,” the “RICO Class,” comprised of “[a]ll persons
sponsored by [Sponsor] Defendants Au Pair Care in America (American Institute for
Foreign Study), AuPairCare, Inc., Cultural Care, Inc. or InterExchange, Inc., to work as
a standard au pair in the United States pursuant to a J-1 Visa,” and 16 State/Sponsor
subclasses. (Doc. # 828 at 34–37.)
The parties ultimately settled. Sponsor Defendants agreed to pay $65.5 million to
be distributed to participating class members with allocations based on federal minimum
wage—including overtime pay, and additional amounts if au pairs worked in states with
a higher minimum wage. (Doc. # 1189 at 3, 7–9.) “In exchange, the Classes are
providing releases to the [Sponsor] Defendants and to host families. . . . The [Sponsor]
Defendants will receive a standard general release. . . . The host families will receive a
narrower release tailored to the claims asserted in the litigation.” (Id. at 7.)
On January 23, 2019, this Court granted preliminary approval of the settlement
and approved the notice to class members. (Doc. # 1191.) As part of this Courtapproved notice plan, class members were advised that by filing a Claim Form or by
doing nothing, they were giving up claims against Sponsors and host families. (Doc. #
1190-2 at 10-11); see also (Doc. # 1234 at ¶ 5.)
On July 18, 2019, this Court entered an Order Granting Final Approval of Class
and Collective Action Settlement. (Doc. # 1229) amended by (Doc. # 1234.) Pursuant to

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the Settlement Approval Order, class members of all 18 classes and subclasses
“released and forever discharged” the:
Released Parties . . . from any and all causes of action, judgments, liens,
indebtedness, costs, damages, penalties, expenses, obligations,
attorneys’ fees, losses, claims, liabilities, and demands of whatever kind or
character (each a ‘Claim’), known or unknown, arising on or before the
Effective Date [July 18, 2019], that are, were or could have been asserted
against any of the Released Parties by reason of, arising out of, or in any
way related to any of the facts, acts, events, transactions, occurrences,
courses of conduct, representations, omissions, circumstances or other
matters referenced in the Litigation, whether any such Claim was or could
have been asserted by any Releasing Party on her or his own behalf or on
behalf of other Persons.
(Doc. 1234 at ¶ 7.) The “Released Parties” were comprised of
Defendants in this action, together with their respective parents,
subsidiaries, officers, directors, employees, contractors, shareholders,
attorneys, agents, representatives, insurers, host families, and affiliates,
expressly, but without limitation, including recruiting affiliates named and
unnamed in the course of this Litigation for those Defendants who use the
services of others to identify, recruit and/or screen au pair candidates.
(Id.) Excepted from the Release were any
claims or potential claims that any au pair may possess against her or his
host family or families if such claims are (i) unrelated to the Claims
asserted in the Litigation or (ii) unrelated to host family obligations under
the federal Au Pair Program requirements, e.g., compensation, hours,
education, or services required.
(Id.) The Court’s Order was “binding on all Settlement Class Members, except those
individuals who validly and timely excluded themselves from the Class or from the
Settlement.” (Id. at ¶ 9.)
Finally, this Court retained “continuing and exclusive jurisdiction” over the parties,
and “all matters relating [to] this matter, including the administration, interpretation,

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construction, effectuation, enforcement, and consummation of the settlement and this
Order.” (Id. at ¶ 11.)
C.

THE MARYLAND LITIGATION
On June 22, 2020, Tatiana Cuenca-Vidarte and Sandra Peters (collectively the

“Maryland Plaintiffs”), former au pairs, initiated litigation (the “Maryland Litigation”) in the
United States District Court for the District of Maryland against Michaele C. Samuel and
Adam Ishaeik (the “Samuel Defendants”), Ms. Cuenca-Vidarte’s Sponsor—AuPairCair,
and others. (Doc. # 1250-1 at 2.) Ms. Peters, through Sponsor Au Pair in America—an
organization of the American Institute for Foreign Study—served as an au pair for the
Samuel Defendants from June 16, 2016, through March 11, 2017. 1 (Doc. # 1250-1 at
13; Doc. # 1250-4 at ¶¶ 73, 76, 93, 95.) Ms. Cuenca-Vidarte, through Sponsor
AuPairCare, served as an au pair for the Samuel Defendants from November 7, 2017,
through September 28, 2018. (Doc. # 1250-1 at 8; Doc. # 1250-4 at ¶ 44–45, 94.)
In their operative Complaint, the Maryland Plaintiffs alleged a multitude of
mistreatment by the Samuel Defendants. These included:
•

requiring them to “do heavy housework” specifically “(1) mopping and cleaning
windows, doors, and light switches, (2) deep cleaning the oven, microwave,
tables, cabinets, refrigerator, and stove, and (3) cleaning using harsh cleaning
supplies and bleach, sometimes without proper materials such as gloves,” (Doc.
# 1250-4 at ¶¶ 49, 81);

The Maryland Plaintiffs did not name Ms. Peters’ Sponsor, Au Pair in America, as a defendant
In the Maryland Litigation. (Doc. # 1250-4 at 18 n.1.)

1

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•

requiring them “to work far in excess of the maximum hours set by law,” (id. at ¶¶
49, 80–81);

•

“exert[ing] extreme control over” them by continuously monitoring them via a
network of surveillance cameras placed throughout the house and yards, and
micromanaging their work, (id. at ¶¶ 50, 56, 59, 80, 83);

•

isolating them by limiting their access to the host family’s car, the internet and
cell phones (their only means of communicating with family), and to friends, (id.
at ¶¶ 61, 66, 86, 89, 93);

•

restricting their access to food, (id. at ¶¶ 54–55, 87–88);

•

“regularly belittle[ing] and berat[ing]” them for example by calling them “stupid,
dirty, useless, and slow, and [by telling Ms. Cuenca-Vidarte] that there was
something wrong with her,” (id. at ¶¶ 58, 82);

•

threatening them with deportation and police action, (id. at ¶¶ 62, 82, 90, 93); and

•

paying them exactly $195.75 per week with no compensation for overtime, (id. at
¶¶ 69, 94–95).

Based on these factual allegations, the Maryland Plaintiffs asserted violations of the
Trafficking Victims Protection Reauthorization Act (“TVPRA”), 18 U.S.C. § 1589, et seq.,
the FLSA, 29 U.S.C. § 201, et seq., the Maryland Wage and Hour Law (“MWHL”), Md.
Code Ann., Lab & Empl. § 3-401, et seq., the Maryland Wage Payment and Collection
Law (“MWPCL”), Md. Code Ann., Lab. & Empl. § 3-501, et seq., and breach of contract
under Maryland law. (Doc. # 1250-1 at 2.)

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On January 2, 2022, the Samuel Defendants filed a Motion to Dismiss, arguing
inter alia that the District Court of Maryland should dismiss the Maryland Plaintiffs’
operative Complaint because “each of the five counts alleged is ‘subject to and released
by the Settlement’ in the Beltran Class Action.” (Id. at 24.) The Honorable Judge George
J. Hazel granted the Motion on September 30, 2022. (Id. at 28.) In so doing he
determined that both Maryland Plaintiffs were members of the Beltran Antitrust and
RICO Classes because they were sponsored by Beltran Sponsor Defendants to work
under a J-1 Visa as au pairs and had not validly and timely excluded themselves from
the Class or Settlement. (Id. at 25–26.) Having served as au pairs prior to the July 18,
2019 Effective Date, Judge Hazel thereby concluded that the Maryland Plaintiffs were
subject to the Beltran Settlement. (Id. at 26.) Finally, Judge Hazel held that dismissal of
the Maryland Plaintiffs’ claims was proper because—due to this Court’s “continuing and
exclusive jurisdiction” over the parties and “interpretation, construction, [and]
effectuation . . . of the settlement”—he lacked subject matter jurisdiction to determine if
the Maryland Plaintiffs’ claims were released by the Beltran Settlement Agreement. (Id.
at 26–27.)
On November 18, 2022, the Maryland Plaintiffs, as Beltran Class Members, filed
a Motion with this Court, requesting an order ruling that “the Beltran Settlement does not
bar their claims,” or “holding that this Court does not have exclusive jurisdiction to
decide this issue.” (Doc. # 1250 at 3.) The Samuel Defendants, who are not parties to
the Beltran Litigation, did not respond. However, two Sponsor Defendants to the Beltran
Litigation, AuPairCare, Inc., and Cultural Care Inc., filed Responses in opposition to the

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Motion, noting their interest in the interpretation of a Settlement Agreement to which
they are parties. (Docs. ## 1255 and 1256.) The Court limits its review to interpreting
the Beltran Class Action Settlement. This Order does not proport to bind any parties or
nonparties in any way. 2
II.
A.

DISCUSSION

CLAIM PRECLUSION OR RES JUDICATA
Beltran Sponsor Defendant Cultural Care Inc. argues that the Maryland Plaintiffs

are precluded from asserting their claims in the Maryland Litigation by the Beltran
Settlement Agreement. (Doc. # 1256 at 13–15.) “[U]nder federal law, settlements have
claim-preclusive effect between the parties to the settlement.” Denver Homeless Out
Loud v. Denver, 32 F.4th 1259, 1271 (10th Cir. 2022) (quoting Nichols v. Bd. of Cnty.
Comm'rs of Cnty. of La Plata, 506 F.3d 962, 969 (10th Cir. 2007)). This is true because,
[t]he procedural safeguards in Rule 23 requiring sufficient notice,
adequate representation, and judicial approval of the class settlement
were intended to mitigate against the potentially harsh consequences of
res judicata. [Valerio v. Boise Cascade Corp., 80 F.R.D. 626, 648–49
(N.C. Cal. 1978), aff’d, 645 F.2d 699 (9th Cir. 1981)]. When these
requirements are met, a class action defendant should receive the full
benefit of the doctrine of res judicata, regardless of whether the case
advanced to trial or settled prior to trial. Id.
Kuncl v. Int’l Bus. Machs. Corp., 660 F. Supp. 2d 1246, 1252 (N.D. Okla. 2009). Where
a federal district court entered the final judgment adopting a settlement, as in the instant
case, federal law applies. Denver Homeless, 32 F.4th at 1271 (citing Yapp v. Excel

The Maryland Plaintiffs argue that this Court has personal jurisdiction over the Samuel
Defendants because, as host families, they are third party beneficiaries of the Beltran
Settlement Agreement. (Doc. # 1250 at 7–10.) However, this issue is not before the Court
because the sole issue before this court is interpretation of the Settlement Agreement.

2

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Corp., 186 F.3d 1222, 1226 (10th Cir. 1999)). The three elements of federal claim
preclusion are: “(1) a final judgment on the merits in an earlier action; (2) identity of
parties or privies in the two suits; and (3) identity of the cause of action in both suits.” Id.
(quoting Johnson v. Spencer, 950 F.3d 680, 693 (10th Cir. 2020)).
Settlements “are of a contractual nature and, as such, their terms may alter the
preclusive effects of a judgment.” Id. (quoting In re Young, 91 F.3d 1367, 1376 (10th
Cir. 1996)). In other words, contractual provisions can supplant traditional preclusion
principles “if it is clear that the parties intended preclusion as a part of their agreement.”
Id. The Court concludes that the Beltran Settlement Agreement intended to, and does,
preclude some, but not all, of the claims the Maryland Plaintiffs seek to assert against
the Samuel Defendants in the Maryland Litigation.
The Maryland Plaintiffs do not explicitly discuss the doctrine of res judicata but do
make related arguments. As it relates to the identity of parties, the Maryland Plaintiffs
argue that Beltran’s “class plaintiffs have not adequately represented the interests of
[the Maryland Plaintiffs].” (Doc. # 1250 at 11–12.) As it relates to the “identity of the
cause of action in both suits,” the Maryland Plaintiffs argue that (1) their TVPRA and
Maryland state claims do not share an “identical factual predicate” with the Beltran
Litigation, (2) their Maryland state law claims are not precluded because there was no
sub-class in Maryland against their Sponsors, and (3) because the Maryland Plaintiffs
did not affirmatively opt-in to Beltran’s FLSA collective action, they cannot be precluded
from asserting FLSA claims in the Maryland Litigation. (Id. at 10–15.)

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1.

Preclusion is Part of the Beltran Settlement Agreement

The plaint text of the Beltran Settlement Agreement makes clear that the parties
intended it to have a preclusive effect. 3 The Agreement includes a broad release, which
provides
Released Parties . . . shall be released and forever discharged by all
Settlement Class Members (the “Releasing Parties”) from any and all
causes of action, judgments, liens, indebtedness, costs, damages,
penalties, expenses, obligations, attorneys’ fees, losses, claims, liabilities,
and demands of whatever kind or character (each a ‘Claim’), known or
unknown, arising on or before the Effective Date [July 18, 2019], that are,
were or could have been asserted against any of the Released Parties
by reason of, arising out of, or in any way related to any of the facts,
acts, events, transactions, occurrences, courses of conduct,
representations, omissions, circumstances or other matters referenced in
the Litigation, whether any such Claim was or could have been asserted
by any Releasing Party on her or his own behalf or on behalf of other
Persons.
(Doc. 1234 at ¶ 7 (emphasis added)). In its Motion for Preliminary Approval of Class and
Collective Action Settlement, Class Counsel acknowledged the far reaching scope of
this Release, stating that “[i]n exchange [for the Settlement payment], the Classes are
providing releases to the Defendants and to host families. . . . The Defendants will
receive a standard general release. . . . The host families will receive a narrower release
tailored to the claims asserted in the litigation.” (Doc. # 1189 at 7.)

Neither party disputes that the Beltran Settlement Agreement is a final judgment on the merits
for res judicata purposes. See Denver Homeless, 32 F.4th at 1271 n.11 (citing Arizona v.
California, 530 U.S. 392, 414 (2000) (stating settlements “ordinarily support claim preclusion”);
Hoxworth v. Blinder, 74 F.3d 205, 208 (10th Cir. 1996) (“Generally, court-approved settlements
receive the same res judicata effect as litigated judgments.”)).

3

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2.

The Release Encompasses the Parties to the Maryland Litigation
a. The Maryland Plaintiffs

The Maryland Plaintiffs are “persons sponsored by any [Beltran Sponsor]
Defendant to work as a standard au pair in the United States pursuant to a J-1 Visa”
prior to the Settlement Agreement’s Effective Date. See (Doc. # 1250-4 at ¶¶ 44, 73.)
Thus, they are members of both the Antitrust and the RICO Classes. (Doc. # 828 at 34–
35.) The Maryland Plaintiffs acknowledge their class membership in the instant motion.
(Doc. # 1250 at 2 (“Class Members Sandra Peters and Tatiana Cuenca-Vidarte, . . .
seek this Court’s interpretation of the scope of the Beltran Settlement . . . .”)). However,
they argue that their interests were not adequately represented by Beltran’s Plaintiffs.
(Id. at 11–12.) The Court concludes that the Maryland Plaintiffs were adequately
represented in the Beltran Litigation but—as will be discussed in detail below—that their
labor trafficking claims fall within the exception to the Release which permits some
types of future claims against host families.
“It is well settled that prior class-action judgments bind ‘absent class members’
that were ‘adequately represented’ in the first case.” Denver Homeless, 32 F.4th at
1273 (quoting Pelt v. Utah, 539 F.3d 1271, 1284 (10th Cir. 2008)). “Inadequate
representation occurs ‘only where the requirements of due process were not afforded.’”
Id. (quoting Lenox MacLaren Surgical Corp. v. Medtronic, Inc., 847 F.3d 1221, 1243
(10th Cir. 2017)).
The Maryland Plaintiffs were adequately represented in Beltran. They do not
argue their counsel was constitutionally deficient or that their due process rights were

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violated. 4 As Beltran Sponsor Defendant Cultural Care points out, Beltran’s Class
Counsel included the lead attorney for the instant motion. (Doc. # 1256 at 5 n.3.)
Rather, the Maryland Plaintiffs argue that they were not adequately represented
because the claims of the Beltran Plaintiffs stem from facts distinct from those the
Maryland Plaintiffs seek to assert. (Doc. # 1250 at 11.) As this argument does not fall
into a recognized representation exception as outlined above, and more principally
concerns the identity of the causes of action of the two suits, it will be considered in
Section II.A.4.
b. The Samuel Defendants
The parties released by the Beltran Settlement agreement included not only the
“Defendants . . . together with their respective parents, subsidiaries, officers, directors,
employees, contractors, shareholders, attorneys, agents, representatives, [and]
insurers,” but also “host families.” (Doc. 1234 at ¶ 7.) The Samuel Defendants were the
Maryland Plaintiffs’ host family prior to the July 18, 2019 Effective Date of the Beltran
Settlement Agreement. (Doc. # 1250-1 at 8, 13.) As a host family, the plain language of
the Beltran Settlement Agreement inoculates the Samuel Defendants from claims
covered by the release. Denver Homeless, 32 F.4th at 1273 (citing In re Young, 91 F.3d
at 1376). Therefore, the Court concludes that the second element of res judicata—
identity of parties in the two litigations—is satisfied. Id. at 271.

The Maryland Plaintiffs make one due process argument in their Motion. (Doc. # 1250 at 14–
15.) However, this argument relates only to their FLSA claims and therefore will be addressed in
Section II.A.3.b.
4

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3.

The Release Encompasses the Maryland State and FLSA Claims at Issue
in the Maryland Litigation

The Court now turns to the final element of res judicata – the causes of action in
both suits. The Court will discuss the Maryland Plaintiffs’ claims—and their related
arguments—by category: (1) Maryland state law claims, (2) FLSA claims, and (3) claims
under the TVPRA.
a. Counts III–V: Maryland State Claims
The Maryland Plaintiffs seek to bring three counts pursuant to Maryland state
law: (a) Count III alleges violations of the MWHL, Md. Code Ann., Lab & Empl. § 3-401,
et seq.; (b) Count IV alleges violations of the MWPCL, Md. Code Ann., Lab & Empl. § 3501, et seq.; and (c) breach of contract. (Doc. # 1250-4 at .) All three claims are brought
by Plaintiff Cuenca-Vidarte against all Defendants, and by Plaintiff Peters against the
Samuel Defendants. (Id.)
The Maryland Plaintiffs make two arguments related to whether these claims are
precluded by the Beltran Settlement Agreement. First, as it relates to their Maryland
breach of contract claim, Claim V, the Maryland Plaintiffs argue that the Beltran
Settlement Agreement does not preclude this claim because it does not share an
“identical factual predicate” with the Beltran Litigation. (Doc. # 1250 at 11.) Specifically,
they assert that the Beltran Class Representatives “alleged no facts related to . . .
breach of contract by au pair host families, nor did it assert legal claims based thereon.”
(Id.) However, the Court disagrees.

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The Beltran Settlement Agreement forever discharges
any and all causes of action . . . of whatever kind or character (each a
‘Claim’), known or unknown, arising on or before the [July 18, 2019,]
Effective Date, that are, were or could have been asserted against any
of the Released Parties by reason of, arising out of, or in any way related
to any of the facts, acts, events, transactions, occurrences, courses of
conduct, representations, omissions, circumstances or other matters
referenced in the Litigation. . . .
(Doc. 1234 at ¶ 7 (emphasis added)). Further, the Settlement Agreement specifically
addresses unknown claims, stating,
[t]he Releasing Parties acknowledge that they are aware that they may
hereafter discover claims presently unknown or unsuspected, or facts in
addition to or different from those that they now know or believe to be true,
with respect to the claims being released pursuant to this Agreement.
Nevertheless, it is the intention of the Releasing Parties in executing this
Agreement that they fully, finally, and forever settle and release all such
matters, and all claims relating thereto, which exist or might have existed
(whether or not previously or currently asserted in any action or
proceeding) against the Released Parties. The Releasing Parties
voluntarily waive and relinquish any and all rights to seek relief for
unknown, unsuspected, or unanticipated claims or damages which the
Releasing Parties may have under any applicable statutes or principles of
law that limit the release of unknown, unsuspected, or unanticipated
claims or damages . . . .
(Doc. # 1250-2 at 16–17.)
The Maryland Plaintiffs’ breach of contract claim is based on the Samuel
Defendants requiring the Maryland Plaintiffs to perform duties, and work hours in
excess of those provided by the au pair regulations which were reiterated in the
individual contracts between them, the Samuel Defendants, and in the case of Plaintiff
Cuenta-Vidarte, her Sponsor AuPairCare. (Doc. # 1250-4 at ¶¶ 141–55.) The operative
complaint in Beltran also made factual allegations regarding the contracts between
Named Class Representatives, Sponsor Defendants, and host families as well as the
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ways in which Beltran Plaintiffs were required to work beyond the limits imposed by the
program. (Doc. # 983 at ¶¶ 18–20, 23–29, 219, 257, 320, 355, 386, 390–92, 464, 495,
502–03, 525.) Generally speaking, at the heart of the Beltran Litigation was Sponsors’
and host families’ failure to pay au pairs wages as required by law and regulation. This
same issue is central to the Maryland Plaintiffs’ breach of contract claim. Thus, the
Court concludes that the Maryland Plaintiffs’ breach of contract claim is sufficiently
“related to” the Beltran Litigation to be precluded by the language of that agreement’s
Release. (Doc. # 1234 at ¶ 7.)
To the extent the Maryland Plaintiffs argue that the Beltran Class
Representatives did not adequately represent them as it relates to their breach of
contract claim (Doc. # 1250 at 11), the Court concludes that Named Class
Representatives in the Beltran Litigation shared common interests with the Maryland
Plaintiffs and, thus, adequately represented the Maryland Plaintiffs as it relates to this
claim. See TBK Partners, Ltd. v. W. Union Corp., 675 F.2d 456, 462 (2d Cir. 1982)
(explaining that “the danger [in] a class representative not sharing common interests
with other class members [is that the class] would endeavor to obtain a better
settlement by sacrificing the claims of others at no cost to themselves by throwing the
others’ claims to the winds.” (citation and internal quotation marks omitted)).
The Maryland Plaintiffs also argue that Counts III and IV, their MWHL and
MWPCL claims, are not precluded by the Beltran Settlement Agreement because there
was no sub-class for au pairs who worked in Maryland with their Sponsors. (Doc. #
1250 at 12–13.) In support, they cite to Hesse v. Sprint Corp., 598 F.3d 581, 590–92

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(9th Cir. 2010), in which the United State Court of Appeals for the Ninth Circuit found
that claims in a previous class action based on a nationwide set of facts did not
preclude a subsequent action based on claims specific to one state. (Doc. # 1250 at
12–13.) Cultural Care disagrees. It argues that Beltran Class Members released all
claims within the scope of the Release, not only those which fit within certified
subclasses. (Doc. # 1256 at 7.) Further Cultural Care argues that, rather than
establishing a “special rule [] that nationwide . . . classes cannot release [state-specific]
claims,” the Hesse court reached a conclusion specific to the facts of that case. (Id. at
12–13.)
The Court agrees that the lack of a Maryland-specific subclass encompassing au
pairs sponsored by the Maryland Plaintiffs’ Sponsors does not exempt Counts III and IV
from the preclusive effects of the language of the Beltran Settlement Agreement. The
Maryland wage claims are all “related to” facts, acts, transactions, occurrences, and
courses of conduct at issue in the Beltran Litigation. In fact, the MWHL and MWPCL
claims are nearly identical to the state wage and hour claims raised in Beltran. Compare
(Doc. # 983 at ¶¶ 628–48), with (Doc. # 1250-4 at ¶¶ 129–40.) In reaching the
Settlement Agreement the Court finds that the parties intended to, and did, release all
related wage claims throughout the country, not merely in the states with designated
sub-classes. See (Doc. # 1234 at ¶ 7; Doc. # 1250-2 at 16–17.)
Hesse does not require a different conclusion. The class plaintiffs in Hesse
alleged that Defendant Sprint, a wireless service provider, violated Washington state
law which specified that a Washington state business and occupation tax could not be

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imposed upon customers. 598 F.3d at 585–86. Sprint argued that the claim was
precluded by a previously settled class action (“the Benny Settlement”), which released
“claims . . . that . . . could have been . . . asserted . . . in [an]other court or proceeding
which relate . . . to allegations that . . . [Sprint] failed properly to disclose or otherwise
improperly charged for surcharges, regulatory fees or excise taxes. . . .” Id. at 587
(internal quotation marks omitted).
The Ninth Circuit determined that the Benny Settlement’s release did not bar the
Hesse plaintiffs’ claims for two reasons. First, the Ninth Circuit determined that the
Benny class representative did not adequately represent the Hesse plaintiffs’ interests
because (1) the Benny action was brought to remedy a different set of injuries—
"Sprint’s nationwide surcharges that shifted to its customers certain costs imposed by
the federal government;” and (2) the Benny class representative’s “interest in settling his
federal Regulatory Fee claims . . . was in conflict with the [Hesse] Plaintiffs’
unrepresented interest in prosecuting their [Washington state tax law] claims.” Id. at
589. Second, the Ninth Circuit found that res judicata did not bar the Hesse claims
because the “claims underlying the Benny settlement dealt exclusively with specific
nationwide surcharges to recoup the costs of compliance with federal programs,
whereas the claims at issue in the [Hesse] case involve Sprint’s statewide surcharge to
recoup the cost of the Washington [business and occupation] tax allegedly in violation of
a Washington statute.” Id. at 591. Thus, although both cases “involve[d] claims that
Sprint improperly billed government taxes or fees to its customers, [] they deal[t] with

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different surcharges, imposed to recoup different costs, that were alleged to be
improper for different reasons.” Id.
Hesse is materially distinguishable from the instant case. First, as discussed
previously and again below, the Court has determined that the Maryland Plaintiffs were
adequately represented in the Beltran Litigation. Second, the Beltran Litigation was
brought to remedy similar injuries to those alleged by the Maryland Plaintiffs—Sponsor
Defendants and host families failing to pay au pairs in accordance with state laws, as
well as federal law and regulations. Compare (Doc. # 983 at ¶¶ 386–92, 430, 447, 464–
66, 482, 495, 502–03, 525, 617–48), with (Doc. # 1250-4 at ¶¶ 59–50, 54–56, 58–59,
61–62, 66, 69, 80–83, 86–90, 93–95, 129–55.) Finally, unlike in Hesse, the underlying
Settlement Agreement at issue in the instant case settled both state and federal claims.
See generally (Docs. ## 983, 1234.) Although the exact Maryland state wage claims
were not brought in the Beltran Litigation, that action included a claim based on violation
of wage and hour laws of the District of Colombia and several states (Doc. # 983 at ¶¶
628–36), and distributions of the Settlement fund were based on the higher of either
federal or state minimum wages (Doc. # 1189 at 7–9, App’x A).
Hesse supports the Maryland Plaintiffs’ arguments in that it highlights the
importance of courts carefully considering the preclusive effects of broadly written
releases in nationwide class action settlements. However, the Court does not find that
Hesse holds that a class action based on a nationwide set of facts can never preclude
state-specific claims. The Court concludes that in the instant case the parties to the

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Beltran Litigation intended to, and did, release all related state law claims even where
no state-specific sub-class was established. (Doc. # 1234 at ¶ 7.)
b. Count II: Violations of the FLSA
Turning to Maryland Plaintiff’s Count II, claims arising under the FLSA, the
Maryland Plaintiffs argue that because they did not affirmatively opt-in to Beltran’s FLSA
collective action, they cannot be precluded from asserting FLSA claims in the Maryland
Litigation. (Doc. # 1250 at 13–14.) The Court disagrees.
The Beltran Litigation was a “hybrid” lawsuit, involving both a Rule 23 class
action and an FLSA collective action. (Doc. # 983 at ¶¶ 539–88.) Rule 23 allows one or
more class members to sue, as a representative party, on behalf of all class members
as long as certain prerequisites are met. Fed. R. Civ. P. 23(a). If a court certifies the
class under Rule 23(b)(3), class members must be sent notice that, among other things,
informs them of the nature of the action, their right to exclude themselves from the
action, and the binding effects of the class judgment. Any member who does not wish to
be bound by the judgment must timely exclude themselves by affirmatively opting out of
the class. Fed. R. Civ. P. 23(c)(2)(B).
On the other hand, group actions brought asserting FLSA rights are known as
collective actions and are governed by § 216(b) of the FLSA. 29 U.S.C. § 216(b).
“Congress enacted the FLSA in 1938 with the goal of protect[ing] all covered workers
from substandard wages and oppressive working hours.” Christopher v. SmithKline
Beecham Corp., 567 U.S. 142, 147 (2012). The “prime purpose” in enacting the FLSA
“was to aid the unprotected, unorganized and lowest paid of the nation's working

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population; that is, those employees who lacked sufficient bargaining power to secure
for themselves a minimum subsistence wage.” Brooklyn Sav. Bank v. O'Neil, 324 U.S.
697, 707 n.18 (1945). To help further its goals, the FLSA provides that an employee or
multiple employees may bring an action “on behalf of himself or themselves and other
employees similarly situated.” 29 U.S.C. § 216(b).
Section 216(b) of the FLSA states that “[n]o employee shall be a party plaintiff to
any such action unless he gives his consent in writing to become such a party. . . .” 29
U.S.C. § 216(b). Based on this language, courts have found that employees must
affirmatively opt-in to the case in order to be bound by a judgment in FLSA collective
actions. Employees who do not opt-in are not bound by the results of the litigation,
including any settlement. See Dolan v. Project Constr. Corp., 725 F.2d 1263, 1266 (10th
Cir. 1984), abrogated on other grounds by Hoffmann–La Roche Inc. v. Sperling, 493
U.S. 165 (1989). Thus, every hybrid action will present this inherent conflict between
FLSA § 216(b)’s opt-in requirement and Rule 23’s opt-out requirement.
Few courts have directly addressed whether final judgment in a hybrid action
precludes Rule 23 class members who failed to opt-in to the FLSA action from pursuing
FLSA claims arising from the same facts or time period. However, to the Court’s
knowledge, all that have reached the issue have agreed that Ҥ 216(b) does not create
an exception to the res judicata doctrine.” Kuncl, 660 F. Supp. 2d at 1251; see also
Mason v. Lumber Liquidators, Inc., No. 17-CV-4780 (MKB), 2021 WL 7906503, at *8
(E.D.N.Y. Jan. 6, 2021); Cisneros v. EP Wrap-It Insulation, LLC, No. 19-500 GBW/GJF,

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2021 WL 2953117, at *9 (D.N.M. July 14, 2021); Lucas v. JBS Plainwell, Inc., No. 1:11cv-302, 2012 WL 12854880, *8 (W.D. Mich. Mar. 8, 2012).
Other courts have discussed the issue when determining whether hybrid class
actions should be certified at all. In these cases, most Courts have warned that class
action and collective action certification in hybrid cases could, or will, result in preclusion
of later FLSA claims based on the same facts by all class members. See, e.g., Ganci v.
MBF Inspection Servs., 323 F.R.D. 249, 265 (S.D. Ohio 2017); Ellis v. Edward D. Jones
& Co., L.P., 527 F. Supp. 2d 439, 446 (W.D. Penn. 2007) (declining to permit state law
overtime claims to be maintained in the same suit as a FLSA collective action because
potential class members will be “forever bound by the terms of the agreement . . . [i]f
they never see the [opt-in/opt-out] notice of pendency among the stacks of throwaway
mail in their mailbox, or if they merely forget to post the opt-out notice in time.”); Chase
v. AIMCO Props., L.P., 374 F. Supp. 2d 196, 202 (D.D.C. 2005) (declining to exercise
supplemental jurisdiction over state law claims because “[a] judgment in the class action
might operate to preclude [a putative class member] from pursuing an FLSA claim on
her own . . . .”). Some courts have even expressed concerns that allowing hybrid
actions would nullify the congressional intent behind § 216(b) and eviscerate the
purpose of the section’s opt-in requirement. Woodard v. FedEx Freight E., Inc., 250
F.R.D. 178, 186 n.7 (M.D. Penn. 2008) (noting in a footnote that “the requirement that
an employee opt out of a hybrid action to preserve the employee's FLSA claim is
contrary to the letter and spirit of § 216(b).”).

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The only court that declined to find that a class action settlement precludes
related FLSA claims did so in a case where no collective action was certified in the
preceding litigation. Donatti v. Charter Commc’ns, LLC, No. 11-4166-CV-C-MJW, 2012
WL 5207585, at *3–5 (W.D. Mo. Oct. 22, 2012). In other words, the settled litigation at
issue, which defendants argued precluded later-brought FLSA claims, was not a hybrid
action. Rather, it had only certified a class action pursuant to Rule 23—and thus is
distinguishable from the Beltran Litigation. Id. But see Lipnicki v. Meritage Homes Corp.,
No. 3:10–CV–605, 2014 WL 923524, at *15 (S.D. Tex. Feb. 13, 2014) (concluding that
the hybrid nature of the preceding litigation is immaterial because “the same res judicata
issues” were present in a “pure Rule 23 state-law class action [where] the facts giving
rise to the class action were the same facts that formed the basis of a subsequent FLSA
action.” (citing Kuncl, 660 F. Supp. 2d at 1253 n.3)).
Although none of the preceding cases constitute binding authority, the Court
finds their reasoning persuasive. As the Kuncl court explained,
The class action is a procedural device “designed to achieve economies of
time, effort, and expense, by the elimination of repetitious litigation.
Paramount to the success of this goal is the ability of the courts to render
a judgment binding absent class members.” 4 William B. Rubenstein, Alba
Conte, & Herbert B. Newberg, Newberg on Class Actions § 11:64 (4th ed.
2009)[.] In accordance with this goal, courts have found that “[i]t is well
settled that a class action judgment is binding on all class members.” Pelt
v. Utah, 539 F.3d 1271, 1284 (10th Cir. 2008). Once a binding judgment is
entered in an action, the doctrine of res judicata “precludes the parties or
their privies from relitigating issues that were or could have been raised in
that action.” Federated Dept. Stores, Inc. v. Moitie, 452 U.S. 394, 398, 101
S.Ct. 2424, 69 L.Ed.2d 103 (1981). The doctrine of res judicata reflects
the courts’ interest in judicial finality and the conservation of judicial
resources. Because Rule 23 class actions strive to achieve many of the
same goals, some courts have found that the fact that a judgment was
entered in a class action suit “weighs in favor of, not against, applying res
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judicata.” See, e.g., Jamerson v. Lennox, 356 F. Supp. 1164, 1169
(E.D.Pa. 1973).
Kuncl, 660 F. Supp. 2d at 1252.
The Maryland Plaintiffs do not dispute that they were proper members of the
Rule 23 class in Beltran. (Doc. # 1250 at 2.) Nor do the Maryland Plaintiffs dispute that
the Beltran judgment dismissed with prejudice all claims released through the
Settlement Agreement. As discussed above, pursuant to the language of the Settlement
Agreement, all class members who failed to opt-out of the litigation fully released
Sponsor Defendants and host families from any and all claims—except those described
in the Release’s exception—“by reason of, arising out of, or in any way related to any of
the facts, acts, events, transactions, occurrences, courses of conduct, representations,
omissions, circumstances or other matters” alleged in the Beltran litigation up until the
Effective Date. (Doc. 1234 at ¶ 7.) The Settlement Agreement specifically defines
“Claim”—including as used in the Release—to include “any and all causes of action,
liabilities and demands of whatever kind or character for minimum wage, overtime,
penalties, expenses, or other compensation (including but not limited to Claims
under the Fair Labor Standards Act; state and local wage and hour laws; . . . .).”
(Doc. # 1250-2 at 11 (emphasis added)).
The Maryland Plaintiffs make two arguments specific to their FLSA claims. First,
they argue that their FLSA claims cannot be bound by the Beltran judgment because
they did not file consent to join the collective action in that litigation. (Doc. # 1250 at 13–
14.) In support of this argument the Maryland Plaintiffs cite the language of § 216(b) as

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well as cases discussing the differences between Rule 23 class actions and § 216(b)
collective actions. (Id. (citing e.g., Dolan, 725 F.2d at 1266)).
Section 216(b)’s opt-in language is not inconsistent with the Maryland Plaintiffs’
arguments. However, there is no language in § 216(b) or elsewhere in the FLSA from
which one could conclude that Congress intended for the FLSA’s opt-in procedure to
create an exception to normal rules of res judicata or contract interpretation. Kuncl, 660
F. Supp. 2d at 1254. As the Kuncl court explained:
In regard to the Congressional intent, the Supreme Court found that the
purposes behind the amendments to the FLSA were to “limit[ ] private
FLSA plaintiffs to employees who asserted claims in their own right and
free[ ] employers of the burden of representative actions.” Hoffmann–La
Roche Inc., 493 U.S. at 173, 110 S.Ct. 482. To the extent [plaintiff]'s
argument is supported by the goal of limiting FLSA plaintiffs to those who
opt-in, it is offset by the goal of reducing employers' burdens in respect to
representative actions.
Id. Additionally, as discussed above, both class action settlements and the doctrine of
res judicata “serve the interests of finality and conservation of judicial resources by
avoiding repetitious litigation.” Id. These policy considerations further undermine the
Maryland Plaintiffs’ arguments. Therefore, the Court finds that the FLSA’s opt-in
provision alone does not create an exception to the preclusive effects of settlement
agreements and the strong policy interests these protect.
The Maryland Plaintiffs also argue that due process bars preclusion of their FLSA
claims. (Doc. # 1250 at 14–15.) Specifically, they argue that because the “Beltran class
action notice did not clearly advise of any preclusive effects on FLSA claims, they
cannot now be denied their rights under the FLSA to bring a subsequent private action.”
(Id. at 15.) However, as discussed previously, absent class members—such as the
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Maryland Plaintiffs—are deemed to have received due process if they were adequately
represented by the present parties. Pelt, 539 F.3d at 1284. “In the Tenth Circuit, ‘[t]he
question of adequate representation can best be resolved by determining whether the
interests of those who would attack the judgment were vigorously pursued and
protected in the class action by qualified counsel.’” Kuncl, 660 F. Supp. 2d at 1255
(quoting Garcia v. Bd. of Ed., 573 F.2d 676, 680 (10th Cir. 1978)).
As discussed briefly above, the Maryland Plaintiffs’ arguments that the Beltran
class representatives did not adequately represent them is unavailing. The Maryland
Plaintiffs have not raised any specific allegations or arguments that the Beltran class
representatives failed to “vigorously pursue[] and protect[]” their rights or “endeavor[ed]
to obtain a better settlement by sacrificing the claims of others at no cost to themselves
by throwing the others’ claims to the winds.” Garcia, 573 F.2d at 680; TBK Partners,
Ltd., 675 F.2d at 462. Additionally, included in the Court-approved Class Action notice
was a link to a website which advised class members of the broad scope of the Release
and defined “Claim” to include FLSA claims. (Doc. # 1190-2 at 9–10; Doc. # 1250-2 at
11.) Therefore, the Maryland Plaintiffs have not demonstrated that they were denied
due process when the Beltran Class Representatives settled all their claims—including
those arising under the FLSA.
4.

The Release’s Exception Excludes Trafficking Claims from the Preclusive
Effect of the Beltran Settlement Agreement

Finally, the Court turns to the last category of claims asserted by the Maryland
Plaintiffs—those related to allegations of labor trafficking. Count I, alleges all
Defendants in the Maryland Litigation engaged in forced labor and trafficking with
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respect to forced labor in violation of 18 U.S.C. §§ 1589–90. (Doc. # 1250-4 at ¶¶ 107–
17.) The Maryland Plaintiffs argue that their Count I claims are not precluded by the
language of the Beltran Settlement Agreement because the two suits do not share an
“identical factual predicate.” (Doc. # 1250 at 10–12.) In other words, the Maryland
Plaintiffs assert that the Beltran Litigation and the Maryland Litigation do not share an
“identity of the cause of action” as it relates to claims of human trafficking. See Denver
Homeless, 32 F.4th at 1271. Specifically, the Maryland Plaintiffs argue that “[t]he
Beltran plaintiffs alleged that sponsor organizations colluded to illegally fix au pair
wages. . . . By contrast, the Maryland [Plaintiffs’] human trafficking claims arise
specifically from the [Samuel Defendants’] coercive and abusive treatment—facts the
Beltran plaintiffs did not allege and claims they could not have stated.” (Doc. # 1250 at
11–12.)
In response, Cultural Care points out that the Tenth Circuit takes a “pragmatic
approach to res judicata, which treats circumstances that are ‘related in time, space,
origin, or motivation’ as singular claims.” (Doc. # 1256 at 13–15); Denver Homeless, 32
F.4th at 1276 (quoting Hatch v. Boulder Town Council, 471 F.3d 1142, 1149 (10th Cir.
2006)). Specifically, Cultural Care argues that all the Maryland Plaintiffs’ claims,
including those pursuant to the TVPRA, arise out of the employment relationship
between au pairs, host families, and Sponsor Defendants prior to the Release’s
Effective Date. (Doc. # 1256 at 13–15.) Thus, Cultural Care contends, all the Maryland
Plaintiffs’ claims—including those brought pursuant to the TVPRA—are sufficiently
related to the Beltran Litigation that the Settlement Agreement’s Release bars them.

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(Id.); see Wilkes v. Wyo. Dep’t of Emp. Div. of Lab. Standards, 314 F.3d 501, 504 (10th
Cir. 2002) (collecting cases for the proposition that “all claims arising from the same
employment relationship constitute the same transaction or series of transactions for
claim preclusion purposes” (citations omitted)). Further, both Cultural Care and AuPair
Care argue that the TVPRA claims do not fall within the Release’s exception because
all the Maryland Plaintiffs’ claims are related to the Beltran Litigation or arise out of host
family obligations under the au pair regulations. (Doc. # 1255 at 7–10; Doc. # 1256 at
6–7, 12.)
Although the Beltran Settlement Agreement explicitly set out a broad, full release
for Sponsor Defendants—precluding any and all future causes of action, “known or
unknown, arising on or before the Effective Date” (Doc. # 1234 at ¶ 7), host families
received “a narrower release tailored to the claims asserted in the litigation” (Doc. #
1189 at 7). Excepted from the Release were any
claims or potential claims that any au pair may possess against her or his
host family or families if such claims are (i) unrelated to the Claims
asserted in the Litigation or (ii) unrelated to host family obligations under
the federal Au Pair Program requirements, e.g., compensation, hours,
education, or services required.
(Doc. # 1234 at ¶ 7.) As discussed above, the heart of the Beltran Litigation involved
Sponsors’ and host families’ failure to pay au pairs minimum wage and overtime as
required by law and regulation. In contrast, the Maryland Plaintiffs’ “TVPRA claims arise
from the [Samuel Defendants’] repeated abuses of the Maryland [Plaintiffs].” (Doc. #
1250 at 3.) Because such claims were not asserted in the Beltran litigation, to the extent
they are asserted against host families only, they are excluded from Release.

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Further, the Maryland Plaintiff’s trafficking allegations against the Samuel
Defendants are “unrelated to host family obligations under the federal Au Pair Program
requirements.” (Doc. #1234 at ¶ 7.) The regulations governing the au pair program lay
out the basic parameters of the program. For example, they require host families to
provide au pairs with room and board, access to six semester hours of formal education
credit, two-weeks paid vacation, and “a weekly [pay] rate . . . paid in conformance with
the requirements of the [FLSA] as interpreted and implemented by the United States
Department of Labor.” 22 C.F.R. § 62.31(c)(2), (e)(6), (j)(1), (j)(4), (k)(1).
On the other hand, the TVPRA’s forced labor provision prohibits persons from:
knowingly provid[ing] or obtain[ing] the labor or services of a person by
any one of, or by any combination of, the following means—
(1) by means of force, threats of force, physical restraint, or threats of
physical restraint to that person or another person;
(2) by means of serious harm or threats of serious harm to that person
or another person;
(3) by means of the abuse or threatened abuse of law or legal process;
or
(4) by means of any scheme, plan, or pattern intended to cause the
person to believe that, if that person did not perform such labor or
services, that person or another person would suffer serious harm
or physical restraint[.]
18 U.S.C. § 1589(a); see also Menocal v. GEO Group, Inc., 882 F.3d 905, 916 (10th
Cir. 2018) (listing the elements of forced labor). “The term ‘serious harm’ denotes ‘any
harm, whether physical or nonphysical, including psychological, financial, or reputational
harm, that is sufficiently serious, under all the surrounding circumstances, to compel a
reasonable person of the same background and in the same circumstances to [render
labor] ... to avoid incurring that harm.’” Menocal, 882 F.3d at 916 (quoting 18 U.S.C. §
1589(c)(2)).
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Although one would hope that host families would not use threats of force or
serious harm, abuse or threatened abuse of the law or legal process, or other actions
proscribed by the TVPRA to coerce au pair labor, the au pair regulations do not
specifically address these types of obligations. Therefore, the language of the Beltran
Settlement Agreement does not preclude the filing of labor trafficking claims against
host families by Beltran class members.
Because the Court concludes that human trafficking claims against host families
fall within the exception to the Beltran Settlement Agreement’s Release, the Tenth
Circuit’s transactional approach to res judicata is not directly applicable. In other words,
even if labor trafficking claims could be construed as relating to the au pairs’
“employment relationship,” the language of the Release’s exception specifically
narrowed the Settlement Agreement’s preclusive effects as they relate to future claims
against host families. And, for the reasons outlined above, the Court concludes
trafficking claims fall within the language of the exception.
To the extent the cases relied on by Cultural Care could be construed as holding
that trafficking claims fall sufficiently within the scope of the Beltran Litigation, Wilkes
and the cases relied upon therein, are all materially distinguishable from the instant
case. The claims involved in Wilkes and its forebears related to quintessential
employment issues such as wages, termination, and employment discrimination, and
were brought pursuant to labor statutes such as the Equal Pay Act, the FLSA, or Title
VII of the Civil Rights Act of 1964. 314 F.3d at 504; see also Yapp v. Excel Corp., 186
F.3d 1222, 1227–28 (10th Cir. 1999) (holding suits alleging wrongful discharge action

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and overtime compensation both arose from a single transaction, plaintiff’s “employment
relationship,” and thus were required to have been brought in one proceeding); Clark v.
Hass Group, Inc., 953 F.2d 1235, 1239–40 (10th Cir. 1992) (concluding that res judicata
bared a second suit brought against the same employer alleging age discrimination and
violations of the Equal Pay Act, where the first suit pursuant the FLSA to recover unpaid
overtime had been previously settled). For example, in Wilkes, the plaintiff “filed suit
against her former employer for equal pay under section 206(d) of the FLSA.” Id. She
then filed a second suit alleging constructive discharge based on gender discrimination
and retaliation in violation of Title VII and the Wyoming Fair Employment Practice Act.
Id. at 505. The Tenth Circuit concluded that both suits “arose from the same
transaction—her employment relationship with the Wyoming [Department of
Employment].” Id.
The Court, however, does not read these cases as holding that all conduct
occurring between an employer and an employee arise out of an “employment
relationship.” This may be particularly true in non-traditional work environments such as
those the au pairs found themselves in, where they lived and worked with their host
families. Further, in crafting the language of the exception to the Beltran Settlement
Agreement’s Release, the parties acknowledge the possibility of claims against host
families that are unrelated to the employment issues central to Beltran. See (Doc. #
1234 at ¶ 7 (excepting from the Release “claims or potential claims that any au pair may
possess against her or his host family or families if such claims are (i) unrelated to the
Claims asserted in the [Beltran] Litigation . . . .”) (emphasis added)). Cultural Care’s

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broad interpretation of Wilkes would render such language superfluous. The Court does
not believe the parties intended such a result and declines to interpret the Settlement
Agreement in this manner. See Walker v. Thompson, 404 F. Supp. 3d 819, 835
(S.D.N.Y. 2019) (“Under New York law an interpretation of a contract that has the effect
of rendering at least one clause superfluous or meaningless . . . is not preferred and will
be avoided if possible.” (quoting Galli v. Metz, 973 F.2d 145, 149 (2d Cir. 1992))
(internal quotation marks and citation omitted) (ellipsis in original)). 5 Therefore, the
Court finds unpersuasive Cultural Care’s argument that the language of the Beltran
Settlement Agreement precludes the Maryland Plaintiffs’ TVPRA claims against host
families.
III.

CONCLUSION

For the foregoing reasons, the Court finds that:
1. the language of the Beltran Settlement Agreement bars Beltran class
members from bringing state law, FLSA, and TVPRA claims arising out of au
pair employment prior to the July 18, 2019 Effective Date against Sponsor
Defendants; however
2. claims against host families pursuant to the TVPRA fall within the exception to
Beltran Settlement Agreement’s Release, and are therefore not barred by the
Beltran Settlement Agreement.

5

The Beltran Settlement Agreement Is governed by New York law. (Doc. # 1250-2 at ¶ 50.)

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The Clerk of Court is directed to close this case.
DATED: February 23, 2023.
BY THE COURT:
_________________________
CHRISTINE M. ARGUELLO
Senior United States District Judge

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