Saman v. LBDP, Inc. et al

Filing 32

MEMORANDUM OPINION. Signed by Chief Judge Deborah K. Chasanow on 6/13/13. (sat, Chambers)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
ROSA SAMAN
:
v.

:

Civil Action No. DKC 12-1083

:
LBDP, INC., et al.
:
MEMORANDUM OPINION
Presently pending and ready for review in this wage-andhour law case is the parties’ joint motion for approval of a
settlement agreement that resolves Plaintiff Rosa Saman’s claims
for unpaid overtime wages under the Fair Labor Standards Act, 29
U.S.C. §§ 201, et seq. (“FLSA”).

(ECF No. 28).

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 parties’ motion will be granted, and

Plaintiff will be directed to file a petition for attorneys’
fees and costs within fourteen (14) days.
I.

Background
On April 10, 2012, Plaintiff filed a four-count complaint

in this court against Defendants LBDP, Inc., d/b/a La Baguette
de Paris; Unyong Lee a/k/a Un Yong Lee; and Edward S. Sokvary.
(ECF No. 1).

The original complaint alleged that, from August

23,

2009

hourly

through

employee

Maryland.
Sokvary

February
at

25,

LBDP,

2012,

Plaintiff

a

bakery

in

worked

Montgomery

as

an

County,

The complaint also asserted that Ms. Yong and Mr.

are

the

owners

and

operators

of

LBDP

who

“created,

maintained and administered” the company’s employment policies;
had

“the

power

scheduling;
¶ 3).

and

to

hire

and

“handle[d]

fire

payroll

employees”;

controlled

responsibilities.”

(Id.

Plaintiff alleged that, throughout her employment, she

“typically work[ed] between 55-65 hours per week and sometimes
was required to work in excess of 100 hours per week,” but
“Defendants refused to pay [her] at the rate of one-and-one half
(1½) times her regular rate of pay for hours worked per week in
excess

of

forty

(40).”

(Id.

¶¶

12,

15).

Based

on

these

allegations, Plaintiff asserted claims for violations of three
statutes:

the FLSA; the Maryland Wage and Hour Law, Md. Code,

Lab. & Empl. §§ 3-401, et seq. (“MWHL”); and the Maryland Wage
Payment Collection Law, Md. Code, Lab. & Empl. §§ 3-501, et seq.
(“MWPCL”).
wrongful

(Id. ¶¶ 20-39).1

termination

under

Plaintiff also asserted a claim for
Maryland

law

based

on

allegations

that Defendants improperly terminated her employment after she
refused to abandon her efforts to secure a peace order against
the spouse of another LBDP employee.

1

(Id. ¶¶ 16-19, 40-46).

Plaintiff did not seek to bring any of her claims on
behalf of similarly situated others.
2

On

May

11,

2012,

Defendants

filed

a

partial

motion

to

dismiss, arguing that the complaint failed to state a claim
under

the

MWPCL

and

that

the

court

lacked

supplemental

jurisdiction over Plaintiff’s wrongful termination claim.
No. 9).

(ECF

Plaintiff voluntarily dismissed her MWPCL claim (ECF

No. 12), but opposed Defendants’ motion to the extent it sought
dismissal of her wrongful termination claim (ECF No. 13).

In a

Memorandum Opinion and Order filed on November 7, 2012, the
court dismissed Plaintiff’s wrongful termination claim for lack
of subject matter jurisdiction.

(ECF Nos. 16 & 17).

On November 21, 2012, Defendants filed their answer to the
complaint,

which

including:

(1)

asserts

a

that

number

“Plaintiff

of

affirmative

Fraudulently

defenses,
Encouraged

Defendants to Falsely Record Her Overtime Records For Her Own
Tax Benefit”; (2) that “Liquidated Damages Cannot Be Assessed
Because

Defendant

Had

Reasonable

Grounds

for

Compensating

Plaintiff In The Manner In Which It Did”; and (3) that the
doctrine of in pari delicto bars Plaintiff’s recovery, in whole
or in part.

(ECF No. 18, at 5-6).

Concurrently with their

answer, Defendants sought an order staying all discovery and
referring the case to a United States Magistrate Judge for early
mediation.

(ECF No. 19).

After Plaintiff indicated that she

did not oppose mediation (ECF No. 22), the case was referred to
Magistrate Judge Charles Day on December 10, 2012 (ECF No. 23).
3

On February 4, 2012, Plaintiff’s unopposed motion for leave to
file an amended complaint that corrects a misnomer was granted.
(ECF Nos. 25 & 26).
On April 9, 2013, the parties participated in a settlement
conference before Judge Day.

On or about May 3, 2013, the

parties executed a settlement agreement (“the Agreement”) that
resolves

both

this

lawsuit

and

a

second

lawsuit

filed

by

Plaintiff against Defendants in the Circuit Court for Montgomery
County, Maryland, which asserts a claim for abusive discharge
and is captioned Rosa Saman v. LBDP, Inc., et al., No. 370562-V.
(ECF No. 28-3).

On May 8, 2013, the parties jointly moved for

approval of that portion of the Agreement that resolves the FLSA
claims asserted by Plaintiff in this action.
With
provides

respect
that,

to

Plaintiff’s

upon

court

FLSA

(ECF No. 28).

claims,

approval,

the

Agreement

Defendants

will

pay

Plaintiff $28,000 to settle all claims asserted in the instant
lawsuit.

(ECF

Defendants

to

No.
pay

28-3

¶ 1).

Plaintiff

The

for

Agreement

attorneys’

also

fees

requires

and

costs

incurred in prosecuting her FLSA claims, in an amount to be
determined by this court following Plaintiff’s submission of a
motion

requesting

such

fees

and

costs.

(Id.

¶ 2.d).

Separately, the Agreement requires Defendants to pay $15,000 to
Plaintiff to settle her economic and emotional distress claims
asserted in the state court lawsuit.
4

(Id. ¶ 1).

The Agreement

also provides that Mr. Sokvary will sign a reference letter that
Plaintiff can share with prospective employers.

(Id. ¶ 2.g).

In exchange, Plaintiff agrees to the following:

(1) a

general release of all claims against Defendants; (2) upon court
approval of the Agreement, dismissal of her state court action
with

prejudice;

amounts

due

and

under

(3)

the

and

upon

payment

Agreement

attorneys’

fees

costs),

prejudice.

(Id. ¶¶ 4-5).2

by

(including

dismissal

of

Defendants
any

of

all

court-awarded

this

lawsuit

with

The Agreement also contains a “Mutual

Non-Disparagement / Non-Publicity” provision, pursuant to which
Plaintiff

agrees

not

about either lawsuit.
A.

to

proactively

disseminate

information

(Id. ¶ 7).

Analysis

Because 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 statute’s provisions 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 (1945).
Under the first exception, the Secretary of Labor may supervise
the payment of back wages to employees, who waive their rights

2

The parties have since agreed that the fee determination
will be embodied in a final order. (See ECF No. 31).
5

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).
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.

See, e.g., Hoffman v. First Student, Inc.,

No. WDQ-06-1882, 2010 WL 1176641, at *2 (D.Md. Mar. 23, 2010);
Lopez

v.

NTI,

LLC,

748

F.Supp.2d

471,

478

(D.Md.

2010).

Pursuant to Lynn’s Food Stores, an FLSA settlement generally
should

be

approved

if

it

reflects

“a

fair

and

reasonable

resolution of a bona fide dispute over FLSA provisions.”
Food, 679 F.2d at 1355.

Lynn’s

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.”

Lane v. Ko-Me,

LLC, No. DKC-10-2261, 2011 WL 3880427, at *2 (D.Md. Aug. 31,
2011) (citing Dees v. Hydradry, Inc., 706 F.Supp.2d 1227, 12416

42 (M.D.Fla. 2010)).

Then, as a second step, the terms of the

proposed settlement agreement must be assessed for fairness and
reasonableness,
including:
(2)

the

which

requires

weighing

a

number

of

factors,

“(1) the extent of discovery that has taken place;

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.”

Lomascolo

v.

Parsons

Brinckerhoff,

Inc., No. 08–cv–1310, 2009 WL 3094955, at *10 (E.D.Va. Sept. 28,
2009)

(collective

action);

see

also

Poulin

v.

Gen.

Dynamics

Shared Res., Inc., No. 09–cv–00058, 2010 WL 1813497, at *1 n.1
(W.D.Va. May 5, 2010) (applying the same factors to a settlement
that involved only individual FLSA claims).
proposed

settlement

of

FLSA

claims

Finally, where a

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.”

Ko-Me,

LLC, 2011 WL 3880427, at *3 (internal quotation marks omitted).

7

B.

Bona Fide Dispute

Here,

the

pleadings,

along

with

the

parties’

representations in subsequent court filings, establish that a
bona fide dispute exists as to Defendants’ liability under the
FLSA.

See Lomascolo, 2009 WL 3094955, at *16-17 (examining the

complaint, answer, and the parties’ recitals in the proposed
settlement to conclude that a bona fide dispute existed).
their

joint

motion

for

approval,

the

parties

genuine disputes continue to exist as to:

reaffirm

In
that

(1) the proper amount

of unpaid overtime wages due – specifically, Plaintiff asserts
that

she

is

owed

approximately

$33,000

in

unpaid

overtime

damages, plus liquidated damages, whereas Defendants maintain
their exposure is no greater than $16,000; (2) whether any FLSA
violation by Defendants could be deemed willful so as to support
an award of liquidated damages; and (3) whether the doctrine of
in pari delicto could bar recovery, in whole or in part, based
on Defendants’ assertions that Plaintiff requested to be paid in
the manner alleged for tax purposes.

(ECF No. 28, at 3-4).

Although neither party provides any detailed calculations
as

to

how

genuineness

they
of

arrived
their

at

their

dispute

is

“exposure”
evident.

figures,
Of

the

particular

significance is Defendants’ continued reliance on the common law
doctrine of in pari delicto, which can bar recovery under a
federal

statute

where

(1)

the
8

plaintiff

bears

at

least

substantially equal responsibility for the violations she seeks
to

redress,

and

(2) preclusion

of

the

suit

would

not

substantially interfere with the statute’s policy goals.

See

Bateman Eichler, Hill Richards, Inc. v. Berner, 472 U.S. 299,
310–11 (1985).

There is no clear authority addressing whether

or how the doctrine of in pari delicto applies in FLSA cases
involving the circumstances alleged by Defendants here (i.e.,
where an employee affirmatively requests a pay structure that
violates the FLSA for some personal benefit).

See, e.g., Chen

v. Republic Rest. Grp., No. 07-3307, 2008 WL 2477523, at *1
(S.D.N.Y. June 19, 2008) (declining to reach the question of
whether

the

doctrine

of

in

pari

delicto

is

available

to

an

employer whose employees purportedly asked to be underpaid for
tax purposes); cf. Lamonica v. Safe Hurricane Shutters, Inc.,
711 F.3d 1299, 1306-08 (11th Cir. 2013) (holding that the in pari
delicto doctrine did not bar employees’ recovery where their
alleged wrongdoing was unconnected to the employer’s “decision
whether to pay them overtime wages in accordance with the FLSA,”
but

declining

to

decide

whether

the

doctrine

“may

ever

be

applied to bar recovery” under the statute given its remedial
nature).

Pursuant to Lynn’s Food Stores and its progeny, such

uncertainty confirms the existence of a bona fide dispute as to
the extent of Defendants’ FLSA liability (if any) in this case.

9

C.

Fairness & Reasonableness

Upon

review

of

considering

the

court,

Agreement

the

the

relevant

parties’

factors

appears

compromise of the parties’

to

submissions

enumerated
be

a

bona fide

by

fair

and

the
and

dispute.

after

Lomascolo
reasonable

Although the

parties agreed to settle at an early stage in the proceedings
and before conducting any formal discovery, they represent that
Defendants produced payroll records in connection with mediation
and that all counsel are “satisfied that they have had ample
opportunity to evaluate and consider the viability of claims and
defenses

raised

particular,

in

this

Plaintiff’s

case.”

(ECF

No.

counsel

avers

28,

that

at
he

5).

In

“reviewed

sufficient wage/hour records, of sufficient quantity and quality
to perform the necessary calculations to determine the potential
range of recovery in this case.”
¶ 3).

(ECF No. 28-2, Mirsky Decl.

The parties also represent that, in light of the risks

associated with proceeding, they wish to avoid the costs of
formal

discovery,

dispositive

(ECF No. 28, at 5).

motions,

and

a

possible

trial.

Thus, the parties have had sufficient

opportunity to “to obtain and review evidence, to evaluate their
claims and defenses[,] and to engage in informed arms-length
settlement negotiations with the understanding that it would be
a difficult and costly undertaking to proceed to the trial of
this case.”

Lomascolo, 2009 WL 3094955, at *11.
10

Additionally, there is no evidence that the Agreement –
reached after a day of settlement proceedings before Judge Day –
is the product of fraud or collusion.

Id. at *12 (“There is a

presumption that no fraud or collusion occurred between counsel,
in the absence of any evidence to the contrary.”).

Rather, the

Agreement appears to be the product of vigorous representation
and

negotiations

by

counsel

for

both

parties.

Furthermore,

counsel are competent and experienced, as evidenced by their
filings submitted to date and their prior involvement in federal
litigation in this district.
that

he

provided

his

client

Plaintiff’s counsel also avers
with

a

copy

of

the

Agreement,

explained its provisions in lay terms, and recommended that she
accept the Agreement, which she did, without objection.
No. 28-2, Mirsky Decl. ¶ 4).
recommendation

as

to

the

(ECF

Although “counsel’s opinion and

fairness

and

reasonableness

of

a

settlement is not to be blindly followed,” Lomascolo, 2009 WL
3094955,

at

*12

(internal

quotation

marks

omitted),

these

representations provide further support for the reasonableness
of the Agreement.
As to the relationship between the amount of the settlement
and

Plaintiff’s

potential

recovery,

the

Agreement

requires

Defendants to pay $28,000 to Plaintiff to settle her remaining
claims

in

estimated

this
her

lawsuit.
FLSA

damages

Given
to
11

that
be

Plaintiff’s

approximately

counsel
$33,000,

including both unpaid overtime wages and liquidated damages, the
settlement

amount

of

$28,000

–

which,

as

explained

in

more

detail below, is Plaintiff’s alone to keep – represents 84.4
percent of her potential recovery.
costs

associated

with

In light of the risks and

proceeding

further

and

Defendants’

potentially viable defenses, this amount appears to “reflect[] a
reasonable

compromise

over

issues

actually

in

dispute.”

general

liability

Lomascolo, 2009 WL 3094955, at *8.
The

Agreement

does

contain

a

broad

release, pursuant to which Plaintiff agrees to waive, release,
and discharge Defendants “from all claims . . . of any and every
nature whatsoever, as a result of actions or omissions occurring
through the effective date of this Agreement.”

(ECF No. 28-3

¶ 5).

broad

Some

provision
release

courts

can

render

includes

complaint.

have

held

that

an

FLSA

agreement

claims

unrelated

an

to

overly

unreasonable

those

asserted

release
if

the

in

the

See, e.g., Moreno v. Regions Bank, 729 F.Supp.2d

1346, 1352 (M.D.Fla. 2010) (concluding that “a pervasive release
in an FLSA settlement confers an uncompensated, unevaluated, and
unfair benefit on the employer” that “fails judicial scrutiny”);
McKeen-Chaplin v. Fanklin Am. Mortg. Co., No. 10–5243 SBA, 2012
WL

6629608,

at

*3

(N.D.Cal.

Dec.

19,

2012)

(rejecting

FLSA

settlement agreement where the release “provision does not track
the

breadth

of

the

allegations
12

in

this

action

and

releases

unrelated

claims”).

Where,

however,

a

settlement

agreement

compensates an employee both for alleged violations of the FLSA
and

for

other

claims

that

are

unrelated

to

the

FLSA

or

comparable state wage-and-hour statutes, courts have approved
broadly worded general release provisions.

See, e.g., Robertson

v. Ther–Rx Corp., No. 2:09–cv–1010–MHT (WO), 2011 WL 1810193, at
*2 (M.D.Ala. May 12, 2011) (approving settlement agreement that
contained

a

general

release

where

the

plaintiff

received

separate compensation for her claims under Title VII and the
Family and Medical Leave Act); cf. Bright v. Mental Health Res.
Ctr., Inc., No. 09-cv-1010, 2012 WL 868804, at *2 (M.D.Fla. Mar.
14, 2012) (approving FLSA settlement agreement that contained a
mutual general release where the employer had asserted numerous
counterclaims against the employee seeking to recover allegedly
fraudulent

travel

employer’s]

willingness

plaintiff]
support

the

provides

reimbursement
to

the

inclusion

payments

forego

its

additional

of

a

claims

because
against

justification

general

release”).

“[the

needed
Because

[the
to
the

Agreement here provides separate compensation to Plaintiff to
resolve

her

wrongful

termination

claim,

the

broad

general

release provision does not render the Agreement unreasonable as
to Plaintiff’s FLSA claims.3

3

This

Memorandum

Opinion
13

does

not,

however,

make

any

D.

Attorneys’ Fees

Finally,

the

Agreement’s

provisions

regarding

attorneys’

fees and costs must also be assessed for reasonableness.

The

Agreement provides that – separate and apart from the $28,000
payment to Plaintiff – Defendants will, pursuant Section 216(b)
of the FLSA, pay attorneys’ fees and costs incurred by Plaintiff
in prosecuting her FLSA claims, in an amount to be determined by
the court following Plaintiff’s submission of a request for such
fees and costs after approval of the Agreement.
¶ 2.d).4

(ECF No. 28-3

Defendants are free to oppose Plaintiff’s request in

accordance with applicable procedural rules, but the “outcome of
any

proceeding

relating

to

[Plaintiff’s

motion]”

terminate or otherwise affect the Agreement.
declaration,

Plaintiff’s

counsel

confirms

shall

(Id.).
that

not

In his

“[t]he

FLSA

recovery received by the Plaintiff is hers to keep and use, and

findings regarding the reasonableness, fairness, or adequacy of
the Agreement as it relates to the parties’ resolution of the
wrongful termination claim. See, e.g., Murphy v. RGIS Inventory
Specialists, LLC, No. 07-cv-89-28JGG, 2007 WL 2412996, at *1 n.1
(M.D.Fla. Aug. 21, 2007) (declining to consider the fairness of
that portion of a settlement agreement that resolved the
plaintiff’s
unrelated
state
law
claim
for
unemployment
benefits).
4

The parties stipulate in the Agreement that Plaintiff is a
prevailing party for purposes of Section 216(b), which provides
that “in addition to any judgment awarded to the plaintiff or
plaintiffs,” the court must “allow a reasonable attorney’s fee
to be paid by the defendant, and costs of the action.”
29
U.S.C. § 216(b).
14

are only subject to deductions to the extent the law requires
taxes to be withheld.”

(ECF No. 28-2, Mirsky Decl. ¶ 2).

Because the Agreement vests the court with discretion to
determine an appropriate amount of attorneys’ fees and costs
under Section 216(b), and because that determination will not
otherwise affect the Agreement, it is clear that the parties
agreed upon the fee award “separately and without regard to the
amount paid to [P]laintiff.”

Kianpour v. Rest. Zone, Inc., No.

DKC-11-0802, 2011 WL 5375082, at *3 (D.Md. Nov. 4, 2011); see
also Gionfriddo v. Jason Zink, LLC, No. RDB–09–1733, 2013 WL
1222350,

at

*1

(D.Md.

Mar.

25,

2013)

(noting

that

it

had

previously granted approval of an FLSA settlement that gave the
court discretion to determine the fee award).
Ultimately,

of

course,

any

award

of

attorneys’

fees

to

Plaintiff will turn on application of the traditional lodestar
methodology

factors.

calculation

is

The

multiplying

starting
the

point

number

expended by a reasonable hourly rate.

of

in

the

hours

lodestar
reasonably

Robinson v. Equifax Info.

Servs., LLC, 560 F.3d 235, 243 (4th Cir. 2009).

In addition, the

specific facts of the case are to be considered in calculating a
reasonable
Circuit

figure.

has

In

instructed

assessing
district

factors, including:

15

reasonableness,
courts

to

the

consider

Fourth
certain

(1) the time and labor expended; (2) the
novelty and difficulty of the questions
raised; (3) the skill required to properly
perform the legal services rendered; (4) the
attorney’s opportunity costs in pressing the
instant litigation; (5) the customary fee
for
like
work;
(6)
the
attorney’s
expectations
at
the
outset
of
the
litigation; (7) the time limitations imposed
by the client or circumstances; (8) the
amount
in
controversy
and
the
results
obtained; (9) the experience, reputation and
ability
of
the
attorney;
(10)
the
undesirability of the case within the legal
community in which the suit arose; (11) the
nature
and
length
of
the
professional
relationship between attorney and client;
and (12) attorneys’ fees awards in similar
cases.
Barber v. Kimbrell’s, Inc., 577 F.2d 216, 226 n.28 (4th Cir.
1978).

Thus,

Plaintiff

is

advised

that,

in

submitting

her

request for attorneys’ fees and costs pursuant to Paragraph 2.d
of the Agreement, she should provide all documentation necessary
to make a lodestar determination, including but not limited to
(1)

declarations

broken

down

establishing

for

each

the

task;

hours
and

expended

(2)

reasonableness of counsel’s hourly rate.

by

support

counsel,
for

the

See Plyler v. Evatt,

902 F.2d 273, 277 (4th Cir. 1990) (“In addition to the attorney’s
own

affidavits,

the

fee

applicant

must

produce

satisfactory

specific evidence of the prevailing market rates in the relevant
community for the type of work for which he seeks an award.”)
(internal quotation marks omitted).

16

Moreover, any request for

attorneys’ fees must comport with the requirements and guidance
set forth in Local Rule 109 and Appendix B to the Local Rules.
II.

Conclusion
For the foregoing reasons, the parties’ joint motion to

approve the Agreement will be granted.

A separate Order will

follow.

/s/
DEBORAH K. CHASANOW
United States District Judge

17