Amaya Diaz v. Pho Eatery, Inc. et al
MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 5/21/2019. (sat, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
JOSE SANTOS AMAYA DIAZ
Civil Action No. DKC 17-2968
PHO EATERY, INC., et al.
The parties in this employment case filed a motion for
appropriate relief on November 23, 2018 (ECF No. 26) and a joint
motion to approve settlement on May 13, 2019 (ECF No. 37).
motion to approve settlement states that, upon court approval,
(“Plaintiff”) $11,000 in “gross pay.”
(ECF No. 37-1, at 3).
Defendants will also pay Plaintiff’s attorneys $1,356.63 for
(Id., at 2).
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 settlement
will be approved and Plaintiff’s motion for appropriate relief
will be denied as moot.
Plaintiff filed a complaint against Pho Eatery, Inc., Tim
Do, Oanh Nguyen, and Quynh Vu on October 6, 2017 alleging four
counts: (1) violation of the Fair Labor Standards Act (“FLSA”);
(2) violation of the Maryland Wage and Hour Law (“MWHL”); (3)
(“MWPCL”); and (4) violation of the Montgomery County Code § 2768.
(ECF No. 1, at 7-13).
Defendant Pho Eatery, Inc. filed an
answer and Defendants Do, Nguyen, and Vu filed a motion to
dismiss for failure to state a claim and lack of jurisdiction on
February 8, 2018.
(ECF Nos. 6 & 7).
Plaintiff filed an amended
complaint on March 10, 2018 without consent or leave of court
dismissed and Defendants’ motion to dismiss was denied as moot
on April 3, 2018.
(ECF No. 12).
The parties filed a joint
request for settlement conference on April 17, 2018 (ECF No. 13)
and the case was referred to Magistrate Judge Charles Day on
April 18, 2018 for alternative dispute resolution (ECF No. 14).
Plaintiff filed a second amended complaint on June 4, 2018,
once again naming Tim Do as a Defendant.
(ECF No. 18).
parties held a settlement conference before Judge Day on July
The discovery period closed on November 26, 2018 and
the parties filed a joint status report indicating that discovery
was “substantially completed.”
(ECF No. 27, at 1).
held a second, more fruitful settlement conference on April 5,
Defendants employed Plaintiff “from 2013 until approximately
primarily at its Gaithersburg, Maryland Location . . . and
occasionally at its Rockville  location[.]”
(ECF No. 18, at
Plaintiff asserts that, from June 1, 2015 until the end of
his employment, he “generally worked 60-72 hours per week” and
“Defendants failed to pay [him] the required wage of 150% of his
regular pay . . . for all hours worked in excess of 40 hours per
(Id., at 5-6).
Plaintiff adds that “Defendants failed
to pay the full minimum wage of $10.75” per hour after Maryland
increased the minimum wage to that rate effective October 1,
(Id., at 6).
Finally, Plaintiff claims that Defendants
failed to provide him vacation time over a three-year period,
(Id., at 7).
As a result, Plaintiff seeks
$48,372.00, representing base wages of $16,124.00 unpaid[,] plus
interest, costs and attorneys’ fees as authorized by statute or
(Id., at 13).
Joint Motion to Approve Settlement
Because Congress enacted the FLSA to protect workers from
the poor wages and long hours that can result from significant
employees, the provisions of the FLSA are mandatory and, except
bargaining, waiver, or modification by contract or settlement.
See Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 706-07 (1945).
Under the first exception, the Secretary of Labor may supervise
the payment of back wages to employees, who waive their rights
to seek liquidated damages upon accepting the full amount of the
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
reflects a “reasonable compromise of disputed issues” rather
than “a mere waiver of statutory rights brought about by an
Lynn’s Food Stores, Inc. v. United
States, 679 F.2d 1350, 1354 (11th Cir. 1982); see also Duprey v.
Scotts Co., 30 F.Supp.3d 404, 407 (D.Md. 2014).
Although the United States Court of Appeals for the Fourth
Circuit has not directly addressed the factors to be considered
in deciding whether to approve such settlements, district courts
in this circuit typically employ the considerations set forth by
the United States Court of Appeals for the Eleventh Circuit in
Lynn’s Food Stores.
See, e.g., Duprey, 30 F.Supp.3d at 407-08;
Lopez v. NTI, LLC, 748 F.Supp.2d 471, 478 (D.Md. 2010).
settlement generally should be approved if it reflects “a fair
and reasonable resolution of a bona fide dispute over FLSA
Lynn’s Food Stores, 679 F.2d at 1355.
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
Id. at 1354.
Then, as a second step, the terms of
the proposed settlement agreement must be assessed for fairness
and reasonableness, which requires weighing a number of factors,
(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)
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
Hackett v. ADF Restaurant Invs., 259 F.Supp.3d 360, 365 (D.Md.
2016) (quoting Saman v. LBDP, Inc., DKC-12-1083, 2013 WL 2949047,
at *3 (D.Md. June 13, 2013); see also Duprey, 30 F.Supp.3d at
Finally, where a proposed settlement of FLSA claims
assessed, regardless of whether there is any suggestion that a
‘conflict of interest taints the amount the wronged employee
recovers under a settlement agreement.’”
Lane v. Ko–Me, LLC,
No. DKC-10-2261, 2011 WL 3880427, at *3 (Aug. 31, 2011) (citation
Bona Fide Dispute
“In deciding whether a bona fide dispute exists as to a
recitals in the proposed settlement agreement.”
F.Supp.3d at 408.
As already explained, Plaintiff’s second
amended complaint alleges that Defendants committed a litany of
Defendants’ answers to Plaintiff’s second
amended complaint deny Plaintiff’s allegations, indicating that
the parties differ in their view of the amount of compensation
Plaintiff was owed and whether he received vacation pay.
ECF Nos. 20 & 21).
Additionally, the parties’ memorandum in
support of motion to approve settlement agreement states that
the parties dispute:
1) precisely how many hours and weeks
Plaintiff worked during the relevant period;
2) the effective hourly rate for Plaintiff
as calculated over the disputed hours; 3)
the lack of strict uniformity in hours over
approximately July 1, 2015 until early
January 2017[;] 4) the issue of whether the
[MWPCL] applied to Plaintiff’s claims, and,
if so, whether wages had been withheld as a
result of a bona fide dispute within the
Defendants acted willfully or recklessly of
their obligations under the FLSA;  6)
whether the Defendants  acted reasonably
and in good faith for purposes of potential
defenses to a liquidated damages claim,
under the FLSA and its Portal-to-Portal Act
provisions[;] and 7) whether Plaintiff may
have been exempt as an executive employee
under applicable case law and regulations.
(ECF No. 37-1, at 1-2).
Defendants’ denials and the parties’
disagreements indicate the presence of a bona fide dispute.
Fairness & Reasonableness
considering the relevant factors, the agreement appears to be a
fair and reasonable compromise of the parties’ bona fide dispute.
litigating employment law disputes,” participated in extended
(ECF No. 37-1, at 1-4).
Thus, the parties have
had sufficient opportunity to obtain additional evidence through
the discovery and negotiation processes, evaluate their claims
Moreover, there is no evidence that the
agreement is the product of fraud or collusion.
requested $19,288 in unpaid overtime, unpaid vacation wages, and
minimum and overtime wage adjustment.
(ECF No. 18, at 9-14).
Additionally, Plaintiff requested liquidated and treble damages
The parties agreed to an $11,000 settlement
after “extended, contentious negotiations made in good faith.”
(ECF No. 37-1, at 4).
Although the total settlement amount is
substantially less than Plaintiff’s total requested regular,
liquidated and treble damages, the legal and factual disputes in
this case make it uncertain whether Plaintiff would ultimately
be able to recover the full amount of requested damages.
in light of the risks and costs to both parties in proceeding
reasonable resolution of Plaintiff’s disputed claims.
Attorneys’ Fees and Costs
Finally, provisions regarding attorneys’ fees and costs
Hackett, 259 F.Supp.3d at 367.
In “the interest of judicial
economy” and compliance with their pro bono obligation under Md.
Code Ann., Pro Bono Pub. Serv. § 19-306.1, Plaintiffs’ counsel
agreed to “waiv[e] the entirety of its claim for fees[.]”
No. 37-1, at 2-3).
As for costs, Defendants agreed to pay
Plaintiff’s counsel $1,356.53 for accrued filing, service, and
itemization of the total fee amount, indicating that it is a
reasonable total of their accrued costs.
III. Motion for Appropriate Relief
Plaintiff’s motion for appropriate relief requested “that
Defendants be barred from asserting the executive exemption to
the [FLSA] and [MWHL] for the disputed period . . . due to
Defendant’s failure to maintain proper work pay, work date and
work hour records.”
(ECF No. 26, at 5).
Because the parties’
joint motion to approve settlement will be granted, Plaintiff’s
motion will be denied as moot.
For the foregoing reasons, the joint motion to approve
appropriate relief will be denied as moot.
A separate order
DEBORAH K. CHASANOW
United States District Judge
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