Amador et al v. Healthy Howard, Inc. et al

Filing 16

MEMORANDUM AND ORDER GRANTING 15 Motion For Judicial Approval of Settlement. Signed by Judge William M Nickerson on 7/2/2015. (hmls, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND

RICHARD A. AMADOR et al.

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v.
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Civil Action No. WMN-15-632
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HEALTHY HOWARD, INC. et al.
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MEMORANDUM AND ORDER
Before the Court is a Joint Motion for Judicial Approval of
Settlement, ECF No. 15, filed by the parties.

Upon a review of

the papers, facts, and applicable law, the Court determines that
no hearing is necessary, Local Rule 105.6, and that the motions
shall be GRANTED.
On March 6, 2015, Plaintiffs Richard Amador, Amanda Taylor,
Alexandra Simon, and Raqueria Murvin brought suit under the Fair
Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq., and the
Maryland Wage and Hour Law (MWHL), Md. Code Ann., Lab. and Empl.
§ 3-401 et seq., against their employer Healthy Howard, Inc., and
their supervisors Patricia Omaña, Stephanie Shirey, and Christine
Hall.

The complaint alleged that, from September 11, 2013,

onward, Plaintiffs were classified as exempt salaried employees
of Healthy Howard.

The complaint alleged that Plaintiffs worked,

on average, 5 to 15 hours of overtime each week but were not
compensated at the 1.5 times regular rate required by the FLSA.
The complaint also alleged that Defendants initially offered
“comp time” in lieu of overtime pay for hours worked over 40

hours a week.

Not only did Defendants not provide the comp time

promised but also later offered a flat rate of $1,000 “in
exchange for all accrued comp time, irrespective of the amount of
comp time allegedly accrued.”

ECF No. 1 ¶ 95.

As a result of

Defendants’ failure to properly compensate for the overtime hours
worked, Plaintiffs alleged that Defendants failed to pay overtime
or a minimum wage as required by the FLSA.
On June 15, 2015, the parties conducted a full day of
mediation before Nancy F. Lesser, Esq.

On or about that date,

the parties executed a settlement agreement (Agreement) that
resolves this lawsuit.

The Agreement provides that, upon Court

approval, Defendants will pay each Plaintiff $13,103.50 to settle
all claims asserted in the instant lawsuit.

The Agreement also

requires Defendants to pay $32,586.00 to Plaintiffs’ counsel for
attorneys’ fees and costs incurred in bringing this action.

The

Agreement also provides that Defendants will provide neutral
references with regard to Plaintiffs as well as a general release
of all claims by Plaintiffs and Defendants.

On June 24, 2015,

the parties jointly moved for approval of the Agreement.
Under the FLSA, employers and employees may enter into a
bargained agreement or settlement regarding wages only in limited
circumstances.

A district court may approve a settlement between

an employer and an employee who has brought a private action for
unpaid wages pursuant to 29 U.S.C. § 216(b), provided that the
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settlement reflects a “reasonable compromise of disputed issues.”
Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350, 1355
(11th Cir. 1982).

“Although the Fourth Circuit has not directly

addressed the factors to be considered in deciding motions for
approval of such settlements, district courts in this circuit
typically employ the considerations set forth by the Eleventh
Circuit in Lynn’s Food Stores.”

Saman v. LBDP Inc., Civ. No. 12-

1083, 2013 WL 2949047, at *3 (D. Md. June 13, 2013).

Under

Lynn’s Food Stores, the Court first determines whether there is a
bona fide dispute between the parties and then whether the
settlement agreement is fair and reasonable.

Id.

In determining whether a bona fide dispute over FLSA
liability exists, “the Court reviews the pleadings, any
subsequent court filings, and the parties’ recitals in the
proposed settlement.”

Fonseka v. Alfredhouse Eldercare, Inc.,

Civ. No. 14-3498, 2015 WL 3863068, at *2 (D. Md. June 19, 2015)
(citing Lomascolo v. Parsons Brinekrnoff, Inc., Civ. No. 08-1310,
2009 WL 3094955, at *10 (E.D. Va. Sept. 28, 2009).

A review of

the filings demonstrates that while Plaintiffs contend that they
are entitled to minimum and overtime wages, Defendants argue that
the tasks at issue could not constitute overtime work, that not
all Plaintiffs satisfactorily or adequately performed their jobs,
that Plaintiffs were not “required” to work in excess of 40
hours, and that Healthy Howard, as a non-profit not engaged in
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commercial activities, is not even subject to the provisions of
the FLSA.

Under these circumstances, the parties have

sufficiently shown that bona fide disputes regarding the
existence or extent of liability under the FLSA exist in this
case.
Next, in determining whether a settlement of FLSA claims is
fair and reasonable, the Court may consider:
(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; . . . and [5] the
probability of plaintiffs’ success on the merits and
the amount of the settlement in relation to the
potential recovery.
Lomascolo, 2009 WL 3095955, at *10.

Here, the parties “exchanged

documentation and information prior to and without the need to
engage in formal written discovery.”

ECF No. 15 ¶ 5.

Given the

current stage of litigation, less than four months after the
complaint was filed, significant expense would be incurred if the
parties engaged in formal discovery, dispositive motions, and
trial.

There has been no evidence to suggest any fraud or

collusion in creating the Agreement, and the Agreement developed
as a result of a day of mediation with Ms. Lesser.

The Agreement

provides $13,103.50 to each Plaintiff, far more than the
$1,000.00 allegedly offered by Defendants to resolve the issue of
comp time payment.

Finally, the attorneys’ fees and costs due to
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Plaintiffs’ counsel are considered separately in the Agreement
from the award to Plaintiffs, and were calculated using the
Lodestar method.

Because the Court concludes that this case

would be subject to extensive litigation costs to continue,
Defendants presented multiple plausible grounds of defense, and
Plaintiffs were represented in an arms-length settlement by
attorneys specializing in employment actions, the Court will
approve the Agreement.

See, e.g., Saman, 2013 WL 2949047, at *3

(“In light of the risks and costs associated with proceeding
further and Defendants’ potentially viable defenses, this amount
appears to reflect a reasonable compromise over issues actually
in dispute.”).
Accordingly, it is this 2nd day of July, 2015, Ordered that:
(1)

The Parties’ Joint Motion for Judicial Approval of
Settlement, ECF No. 15, is GRANTED, and;

(2)

The Clerk of Court shall transmit a copy of this
Memorandum and Order to all counsel of record.

______________/s/__________________
William M. Nickerson
Senior United States District Judge

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