Fonseka v. AlfredHouse Eldercare, Inc. et al

Filing 31

MEMORANDUM OPINION. Signed by Judge George Jarrod Hazel on 6/19/2015. (hmls, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
SOlltliem Division

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SUNIL FONSEKA

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Plaintiff,

Case No.: G.JH-14-3498

v.
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ALFREDHOUSE

ELDERCARE,

INC., et

{II.

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Defendants.

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MEMORANDUM

OPINION

Plaintiff Sunil Fonseka filed this action against his former employer,
Alfredhouse

Eldercare,

seeking damages
overtime

Inc. ("Alfredhouse")

the Maryland

alleged failure to pay him minimum

of the Fair Labor Standards

Wage and Hour Law ("MWHL"),

el seq., and the Maryland

Wage Payment and Collection

wage violations.

See id. Defendants

jointly requested

a stay to engage in settlement

Alexander

answered

took place on April 8,2015

Williams,

Law ("MWPCL'"),

Md. Code, LE ~ 3-

for raising complaints

the Complaint

of Defendants'

and, in March 2015, the parties

efforts. ECF Nos. 4, 21 & 22.
with retired United States District Judge

of Settlement

the Amended

Agreement,

Nos. 3, 4, 30 & 30-1. For the reasons explained
exist regarding

29 U.S.C. ~ 20 I el seq.,

and the parties now jointly move for approval of a settlement

ECF No. 30. The Court has reviewed
Motion for Approval

Act ("FLSA"),

and

Md. Code, Lab. & Empl. Article ("LE'") ~ 3-401

50 I el seq. ECF NO.3. Fonseka also alleges retaliation

Mediation

Defendant

and owner Dr. Veena J. Alfred ("'Dr. Alfred')

and other relief for Defendants'

wages in violation

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Complaint,

agreement.

the Answer, the parties'

and the Settlement

Agreement

Joint

and Release. ECF

below, the Court finds that honafide disputes

liability under the FLSA, the settlement

agreement

is a fair and reasonable

compromise of the disputes, and the attorney's fees are reasonable. See Leigh v. Bottling Group.
LLC, 2012 WL 460468 at

* 4 (D.

Md. Feb. 10,2012); Lopez v. NT!. LLC, 748 F.Supp. 2d 471,

478 (D. Md. 2010); Lynn's Food Stores. Inc. v. United States, 679 F.2d 1350, 1355 (II th Cir.
1982). Therefore, the Court will GRANT the motion and instruct the clerk to close this case.
I. FACTUAL BACKGROUND
According to Fonseka, AI fred house hired him in 2011 to work as a caregiver. providing
general care and breakfast for the residents of Alfredhouse. See ECF NO.3 at ~ 12. Fonseka
alleges that he worked an average of seven days a week for fifteen hours a day. See id. at ~ 13.
Fonseka further alleges that Alfredhouse paid him a daily rate of between $50 and $65. See id. at
~ 14. Defendants contend that Fonseka did not work the amount of hours he claims and that other
Alfredhouse employees would be able to refute those claims. See ECF No. 30 at 4.
On October 29,2014, Fonseka's counsel sent a letter to Defendants' counsel concerning
alleged wage violations. See ECF NO.3 at ~ 18. On the same day, Fonseka alleges, Dr. Alfred
scolded him for pursuing a wage claim and reduced his hours. See id. at

20. Then. on October

31,2014, Fonseka was told that he could no longer live at Alfredhouse (although it does not
appear that he left at that time). See id. at

21. On November 6,2014, Fonseka filed his original

complaint in this Court. See id. at ~ 22.
On November 7, 2014, Dr. Alfred filed a Petition for Peace Order against Fonscka.
alleging that Fonseka had threatened to poison Alfredhouse's food supply. See id. at ~ 23. On
November 8,2014, Defendants terminated Fonseka's employment. See id. at

25. On November

12,2014, an evidentiary hearing on the peace order was held and it was denied for lack of proof.
See id. at

26. Defendants then began locking Fonseka out of various rooms and eventually

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locked him out of Alfredhouse. See id. at

27-29. Fonseka claims that these actions were taken

in retaliation for his assertion of wage violations. See id. at ~ 62.
II. DISCUSSION
A. FLSA Settlements
The FLSA does not permit settlement or compromise over alleged FLSA violations
except with (l) supervision by the Secretary of Labor or (2) a judicial finding that the settlement
reflects "a reasonable compromise of disputed issues" rather than "a mere waiver of statutory
rights brought about by an employer's overreaching." Lynn's Food Stores. Inc., 679 F.2d at
1354; see also Lopez, 748 F. Supp. 2d at 478 (explaining that courts assess FLSA settlements for
reasonableness). These restrictions help carry out the purpose of the FLSA, which was enacted
"to protect workers from the poor wages and long hours that can result from significant
inequalities in bargaining power between employers and employees." Duprey v. SCOlls Co. LLC.
2014 WL 2174751 at *2 (D. Md. May 23, 2014). Before approving an FLSA settlement. courts
must evaluate whether the "settlement proposed by an employer and employees ... is a fair and
reasonable resolution of a bonafide dispute over FLSA provisions." Lynn 's Food Stores. Inc..
679 F.2d at 1355 (italics not in original). To do so, courts examine whether there are FLSA
issues actually in dispute, the fairness and reasonableness of the settlement, and the
reasonableness of the attorney's fees. Duprey, 2014 WL 2174751 at *2 (internal citations
omitted). "These factors are most likely to be satisfied where there iS,an 'assurance of an
adversarial context' and the employee is 'represented by an attorney who can protect [his] rights
under the statute,''' Id. (citing Lynn's Food Stores. Inc.. 679 F.2d at 1354).

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B.

BOlla

whether a bonafide dispute over FLSA liability exists, the Court reviews

In determining
the pleadings,

Fide Dispute

any subsequent

court filings, and the paI1ies' recitals in the proposed

Lomascolo v. Parsons Brinkerno/f Inc., 2009 WL 3094955 at

* I 0 (E.D.

Here, a review of the filings demonstrates

that while Fonseka contends

minimum

damages,

Defendants

and overtime

wages, liquidated

argue that some of Fonseka's

because he threatened

& 30 at 4. Defendants
coworkers
however,
knowledge

Va. Sept. 28, 2009).
that he is entitled to

for retaliation,

see ECF NO.3,

claim is barred by the statute of limitations,

work as many hours as he claims, he was provided
he was terminated

and damages

settlement.

board and lodging as part of his wages, and

to poison Alfredhouse's

planned to use available

he did not

food supply. See ECF Nos. 4

time records and affidavits

fi'om Fonseka's

to dispute the number of hours he worked. See ECF No. 30 at 4. Defendants
that less than perfect record keeping and the death of their Vice-President,
of key events, would have hampered

who had

their defense. Id. Under these circumstances,

shown that bonafide disputes regarding

parties have sufficiently

C. Fairness & Reasonableness

COUl1 may consider

whether a settlement

of FLSA claims is fair and reasonable,

the following:

(I) the extent of discovery that has taken place; (2) the stage of the
proceedings, including the complexity, expense and likely duration
of the litigation; (3) the absence of fraud or collusion in the
settlement; (4) the experience of counsel who have represented the
plaintiffs; (5) the opinions of class counsel and class members after
receiving notice of the settlement whether expressed directly or
through failure to object; and (6) the probability
of plaintiffs'
success on the merits and the amount of the settlement in relation
to the potential recovery.

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the

the extent of liability under the

FLSA exist in this case.

In determining

concede,

the

Lomascolo, 2009 WL 3094955 at * 10. Here, the parties have informally exchanged some
documents related to this litigation, but have exchanged very little formal discovery. ECF No. 30
at 3. Given the current stage of the litigation, significant expenses would be incurred if the
parties engaged in formal discovery, dispositive motions, and possibly trial. See. e.g., Saman v.
.

.

LBDP, 2013 WL 2949047 at *3 (D. Md. June 13,2013). Additionally, there has been no
evidence to suggest any fraud or collusion in the settlement, and the settlement was reached after
more than seven hours of mediation with retired Judge Alexander Williams,.Ir. See ECF No. 30
at 2. The settlement agreement is for a total of $78,000 with $48,000 paid to Fonseka. See ECF
No. 30-1. This figure represents a compromise between what Defendants estimate they owe and
what Fonseka believes he is owed. See ECF No. 30 at 4. As was the case in Saman, "[i]n 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." 2013 WL 2949047 at *5 (citation and internal quotation marks and brackets omitted).
Although the settlement agreement contains a general release of claims beyond those in
the Complaint, and a general release can render an FLSA settlement agreement unreasonable, the
Court is not required to evaluate the reasonableness of the settlement as it relates to non-wagedispute claims if the employee is compensated reasonably for the release executed. See Duprey,
2014 WL 2174751 at *4. As explained above, the Court finds that $48,000 is reasonable for the
release executed. Cf id. ("This percentage fairly compensates Duprey for the general release
executed.").
D. Attorney's

Fees

Traditionally, "[i]n calculating an award of attorney's fees, the Court must determine the
lodestar amount, defined as a 'reasonable hourly rate multiplied by hours reasonably expended. '"

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Lopez v. J..7EL Canst. Grp .. LLC, 838 F. Supp. 2d 346,348 (D. Md. 2012) (citing Grissom v. The
Mills Corp., 549 F.3d 313, 320-21 (4th Cir. 2008) and Plyler v. Evatt, 902 F.2d 273, 277 (4th
Cir. 1990)). An hourly rate is reasonable if it is "in line with those prevailing in the community
for similar services by lawyers of reasonably comparable skill, experience and reputation." Blum
v. Stenson, 465 U.S. 886, 890 n.ll (1984). This Court has established rates that are
presumptively reasonable for lodestar calculations. See Loc. R. App. B.
Here, Fonseka is represented by Scott Mirsky, who has been admitted to practice law for
over fifteen years. See ECF No. 30 at 3. Fonseka's counsel spent approximately 163.5 hours on
this case, at the rate of$325.00 an hour, resulting in $53,137.5 in legal fees. See id. at 5. Mr.
Mirsky's $325.00 hourly rate is consistent with this Court's rules and guidelines for determining
attorney's fees, which notes a guideline range of $275-$425 per hour for attorneys with fifteen
or more years of experience. See Loc. R. App. B.3. Further, Mr. Mirsky filed the complaint on
behalf of his client on November 16, 2014. See ECF NO.1. Thus, this case has been pending for
around seven months. Mr. Mirsky has analyzed this case with his client, prepared and served
written discovery on Defendants, and negotiated the settlement with Defendants and their
counsel (which included a seven-hour mediation). See ECF No. 30 at 3-5. Mr. Mirsky has also
represented Fonseka at a hearing related to Defendants' peace order against Fonseka. See id. at 5.
Defendants have agreed to a settlement of $78,000 with $30,000 in attorney's fees and $48,000
paid to Fonseka. See ECF No. 30-1. Thus, notwithstanding the hours expended, as part of the
negotiations in this case, Mr. Mirsky has agreed to reduce his fee to $30,000. See id. In light of
the facts of this case and the disputes explained above, the Court finds the attorney's fees to be
fair and reasonable under the lodestar approach.

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III. CONCLUSION
For the reasons stated above, the Joint Motion for Approval of Settlement Agreement.
ECF No. 30, is GRANTED.
A separate Order shall issue.

£L~

Dated: Junel'~,~2~0~15~__

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GEORGE J. HAZEL
United States District Judge

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