Walters v. Tievy Electric Company, Inc. et al

Filing 8

MEMORANDUM OPINION. Signed by Judge Paula Xinis on 3/2/2017. (kns, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
Southern Division
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Troy A. Walters

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Plaintiff,

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v.

Case No. PX 16-3916
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Tievy Electric Company, et. al
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Defendants.
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MEMORANDUM OPINION
Plaintiff Troy Walters (Plaintiff) and Defendants Tievy Electric Company, Inc. and
Ronald L. Tievy, (collectively, “Defendants”), jointly move for approval of a settlement
agreement. Plaintiff filed this action alleging that Defendants denied him overtime pay in
violation of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and the Maryland
Wage and Hour Law (“MWHL”), Md. Code, Lab. & Empl. Article (“LE”) § 3-401 et seq., and
the Maryland Wage Payment and Collection Law (“MWPCL”), Md. Code, LE § 3-501 et seq.
ECF No. 1.
The Court has reviewed the Complaint, the parties’ Joint Motion for Approval of
Settlement Agreement, and the Settlement Agreement and Release. ECF No. 5. For the reasons
explained below, the Court finds that bona fide disputes exist under the FLSA, the settlement
agreement is a fair and reasonable compromise of the disputes, and the attorney’s fees are
reasonable. See Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350, 1355 (11th Cir. 1982);
Leigh v. Bottling Group, LLC, No. DKC 10-0218, 2012 WL 460468, at * 4 (D. Md. Feb. 10,

2012); Lopez v. NTI, LLC, 748 F. Supp. 2d 471, 478 (D. Md. 2010). Therefore, the Court will
GRANT the motion and instruct the clerk to close this case.
I. BACKGROUND
Plaintiff Walters worked for Defendants as an hourly employee between May 1, 2015 and
mid-September of 2016. ECF No. 1 at ¶¶ 35. Plaintiff alleges that he was denied overtime wages
during this time period for hours worked in excess of forty hours per work week. Id. ¶¶ 38-39.
Plaintiff filed the initial Complaint on December 7, 2016. The parties engaged in early
and fruitful settlement negotiations. ECF No. 5-1. On February 28, 2017, the parties submitted
the Joint Motion for Settlement Approval. Id.
II. DISCUSSION
A. FLSA Settlements
The FLSA does not permit settlement or compromise over alleged FLSA violations
except with (1) 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. Scotts Co. LLC,
30 F. Supp. 3d. 404, 407 (D. Md. 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 bona fide
dispute over FLSA provisions.” Lynn’s Food Stores, Inc., 679 F.2d at 1355 (emphasis added). 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, 30 F.
Supp. 3d. at 408 (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).
B. Bona Fide Dispute
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.
See Lomascolo v. Parsons Brinkernoff, Inc., No. 1:08cv1310 (AJT/JFA), 2009 WL 3094955 at
*10 (E.D. Va. Sept. 28, 2009). Here, defendants expressly denied liability in response to
Plaintiff’s complaint and make no admissions of liability. Whether Plaintiff is entitled to
overtime wages as a covered employee under the FLSA is a fact-specific inquiry that is
frequently at the heart of FLSA litigation. See, e.g., Schultz v. Capital Int’l Sec., Inc., 466 F.3d
298 (4th Cir. 2006). Further, the parties also agree that a number of bona fide disputes could
materially affect the outcome of this case at trial. ECF No. 5-1 at 4-6. Accordingly, this factor is
satisfied.
C. Fairness & Reasonableness
In determining whether a settlement of FLSA claims is fair and reasonable, the
Court may consider the following:
(1) the extent of discovery that has taken place; (2) the stage of the
proceedings, including the complexity, expense and likely duration
of the litigation; (3) the absence of fraud or collusion in the
settlement; (4) the experience of counsel who have represented the
plaintiffs; (5) the opinions of 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.
Lomascolo, 2009 WL 3094955, at *10. Here, the request for attorney’s fees demonstrates that the
parties devoted appropriate time to settlement negotiations. ECF No. 5-1. For example, the
parties exchanged quickly after suit informal discovery and participated in prompt, efficient
discussions. Thus, the parties had sufficient opportunity 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 trial of this case.” Lomascolo, 2009 WL 3094955 at *11.
No evidence suggests that the parties engaged in any fraud or collusion in the settlement.
Under the settlement agreement, Plaintiff will receive $8,391.00, which includes recovery for
lost overtime ($4,196.00) and for penalty damages ($4,195.00) . ECF No. 5-1 at 6. Although
Plaintiffs contend that after trial Walters would be entitled to a maximum of $6,666.75 in lost
wages, Defendants contend that the maximum recovery is closer to $4,478.25. ECF No. 5-1, p.
7. In either event, the settlement amount reflects “a reasonable compromise over issues actually
in dispute,” especially “in light of the risks and costs associated with proceeding further and
Defendants’ potentially viable defenses.” Saman v. LBDP, Inc., No. DKC-12-1083, 2013 WL
2949047, at *5 (D. Md. June 13, 2013) (citations and internal quotation marks omitted).
Finally, 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-wage-dispute claims if the employee is compensated reasonably for the release

executed. Duprey, 30 F. Supp. 3d. at 410. Considering all of the above, the Court finds that the
proposed settlement is fair and reasonable.
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.’”
Lopez v. XTEL Const. 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, 895 n.11 (1984). This Court has established rates that are
presumptively reasonable for lodestar calculations. See Loc. R. App. B.
Here, Plaintiffs have been represented by Stephen Lebau, Esq. ECF No. 5-1. Mr. Lebau
has practiced law in this field for twenty-five years and billed in this case at a rate of $475 per
hour for roughly eight hours of time spent on investigation, case preparation, and settlement
negotiations. His staff also working on this case has billed at a much lower rate. The total
number of firm hours spent on this case was 35 with the total proposed fee of $5,609.00, cutting
the total fees owed by $2,000.00. Id. While the rate charged for Mr. Lebau’s time is at the high
end of the range set forth in Appendix B of this Court’s Local Rules, the lion’s share of the
remaining hours were billed at significantly lower hourly rate, and the total fee was then
discounted by $2,000.00. The Court, therefore, finds the attorney’s fees and costs (an additional
$619.64) to be fair and reasonable.

III. CONCLUSION

For the reasons stated above, the Joint Motion for Approval of Settlement Agreement is
GRANTED.
A separate Order shall issue.

Dated: March 2, 2017

/S/
PAULA XINIS
United States District Judge