Nyamira et al v. Little Kampala Services, LLC et al
Filing
48
MEMORANDUM OPINION (c/m to Plaintiff Nyamira 10/17/18 sat). Signed by Judge Deborah K. Chasanow on 10/17/2018. (sat, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
STEVE NYAMIRA, et al.
:
v.
:
Civil Action No. DKC 17-3379
:
LITTLE KAMPALA SERVICES, LLC,
et al.
:
MEMORANDUM OPINION
Steve
Nyamira
and
Douglas
Ominde
filed
this
complaint
pursuant to the Fair Labor Standards Act (FLSA) seeking wages
arising from their employment at Little Kampala Bar & Grill.
Plaintiff Ominde worked for Defendants Little Kampala Services,
LLC, Trudy Kaliisa-Ofwono and Paul Ofwono (collectively, “the
Defendants”) at Little Kampala Bar & Grill (“the restaurant”) as
a line cook and bartender from June, 2016 through August, 2016.
(ECF No. 1, at 3-5).
Mr. Ominde alleged in the complaint that
he “regularly worked approximately 80 hours per week” throughout
the course of his employment, he was hired at an hourly rate of
$12 per hour, and the Defendants paid him the required minimum
wage for only one bi-weekly period during the course of his
employment.
restaurant
through
(Id., at 10).
as
a
January,
manager
2017
(ECF
(Id.,
Plaintiff Nyamira worked at the
No.
at
1,
5),
at
6)
alleges
from
that
June,
2016
Defendants
denied him wages (Id., at 7), and seeks the same relief as
Douglas
Ominde
(Id.
at
12-15).
However,
Plaintiff
Ominde
independently reached a settlement with Defendants and Plaintiff
Nyamira’s claims remain outstanding at this time.
(ECF No. 44).
Mr. Ominde and Defendants filed a joint motion for approval
of
settlement
agreement
in
this
(“FLSA”) case on October 2, 2018.
provides
Plaintiff
that,
upon
Ominde
liquidated damages.
court
$750.00
Fair
Standards
(ECF No. 44).
approval,
in
Labor
unpaid
The Agreement
Defendants
wages
(ECF No. 44-1, at 2).
Act
pay
$750.00
and
will
in
Defendants will also
pay $1,500.00 for attorneys’ fees and costs.
(Id.).
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.
I.
Background
Plaintiff Ominde contended in his complaint that he is owed
wages, liquidated damages, pre- and post-judgment interest, and
attorney’s fees and costs.
(Id., at 12-15).
Based on these
allegations, Plaintiff filed a complaint asserting violations of
the Maryland Wage and Hour Law (the “MWHL”), Md.Code Ann., Lab.
& Empl. § 3-401, et seq. (Count I); the Maryland Wage Payment
and Collection Law (the “MWPCL”), Md.Code Ann., Lab. & Empl. §
2
3-501, et seq. (Count II); and the Fair Labor Standards Act (the
“FLSA”), 29 U.S.C. § 201, et seq. (Counts III-V).
filed an amended complaint on May 15, 2018.
amended
complaint
asserted
an
additional
Plaintiff
(ECF No. 19).
breach
of
The
contract
allegation, stating that defendants materially breached their
oral contract with Plaintiff Ominde “by not paying Plaintiff
[Ominde]
the
agreed-to
mutually
accepted
wage
rate
for
work
Plaintiff [Ominde] performed for Defendants at Little Kampala.”
(ECF No. 19, at 11).
II.
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 provisions of the FLSA 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, 706-07 (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
wages
owed.
See
29
U.S.C.
§
216(c).
Under
the
second
exception, a district court can approve a settlement between an
3
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); 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).
An FLSA
settlement generally should be approved if it reflects “a fair
and
reasonable
provisions.”
first
step,
examined
to
resolution
of
a
bona
fide
dispute
Lynn’s Food Stores, 679 F.2d at 1355.
the
bona
determine
“actually in dispute.”
fides
of
the
if
there
parties’
are
Id. at 1354.
FLSA
over
Thus, as a
dispute
issues
FLSA
must
that
be
are
Then, as a second step,
the terms of the proposed settlement agreement must be assessed
for
fairness
and
reasonableness,
4
which
requires
weighing
a
number of factors, including: “(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 [ ] counsel . . .; and (6) the probability of
plaintiffs’
success
on
the
merits
and
the
amount
settlement in relation to the potential recovery.”
of
the
Lomascolo v.
Parsons Brinckerhoff, Inc., No. 08–cv–1310, 2009 WL 3094955, at
*10 (E.D.Va. Sept. 28, 2009); see also Duprey, 30 F.Supp.3d at
408, 409.
Finally, where a proposed settlement of FLSA claims
includes
a
provision
reasonableness
of
the
regarding
award
attorneys’
must
also
“be
fees,
the
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.’”
No.
DKC-10-2261,
2011
WL
3880427,
at
Lane v. Ko–Me, LLC,
*3
(Aug.
31,
2011)
(citation omitted).
A.
Bona Fide Dispute
“In deciding whether a bona fide dispute exists as to a
defendant’s
pleadings
in
liability
the
under
case,
the
along
FLSA,
with
5
the
courts
examine
the
representations
and
recitals
in
the
proposed
F.Supp.3d at 408.
settlement
agreement.”
Duprey,
Here, there is a bonda fide dispute.
30
In the
complaint, Plaintiff Ominde alleged that Defendants “never paid
[Plaintiff
Ominde]
the
required
minimum
worked while he was employed by Defedants.”
wage
for
all
hours
(ECF No. 1, at 10).
He further asserted that Defendants failed to pay him overtime
wages, retained credit card tips owed to Plaintiff Ominde, and
failed to reimburse Plaintiff Ominde for work-related purchases.
(Id.).
While
Defendants
admitted
that
they
wrongfully
kept
Plaintiff Ominde’s credit card tips, Defendants denied all of
Plaintiff Ominde’s remaining allegations.
(ECF No. 10, at 6).
It now appears as well that the parties differ in their view as
to the actual hours worked and the amounts paid.
B.
Fairness & Reasonableness
Upon
review
of
the
parties’
submissions
and
after
considering the relevant factors, see Duprey, 30 F.Supp.3d at
409,
the
compromise
agreed
to
discovery.
Agreement
of
the
settle
appears
parties’
after
to
be
bona
fide
conducting
(ECF No. 44 ¶ 7).
a
fair
and
dispute.
written
reasonable
The
and
parties
documentary
Before entering the Agreement,
“Plaintiff [Ominde] and his counsel discussed the Plaintiff’s
unpaid
wages”
and
“Plaintiff
calculated
6
that
he
was
owed
$2,971.52 in unpaid wages.”
(Id.).
The parties also assert
that they had “extensive discussions” wherein the parties were
“counseled and represented by their respective attorneys” before
reaching a settlement agreement.
sufficient
opportunity
to
“obtain
Thus, the parties have had
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.
Moreover, there is no evidence that the Agreement is the product
of fraud or collusion.
The settlement amount, in light of Plaintiff Ominde’s now
stated
potential
reasonable.
recovery,
also
appears
to
be
fair
and
In his complaint, Plaintiff Ominde alleged that
Defendants never paid him “the required minimum wage for all
hours worked while he was employed by Defendants” or “overtime
wages at a rate of one and one-half times his regular rate of
pay for all overtime hours worked in excess of 40 hours per week
as required by FLSA, 29 U.S.C. § 207.”
(ECF No. 1, at 10).
Plaintiff Ominde further asserted that Defendants withheld his
credit card tips and failed to reimburse him for work-related
purchases.
(Id.).
Plaintiff Ominde used the discovery process
7
and discussions with counsel more specifically to calculate the
damages sought, resulting in Plaintiff Ominde’s calculation that
“he was owed $2,971.52 in unpaid wages.”
(ECF No. 44 ¶ 7).
Although the settlement amount of $750 in unpaid wages and $750
in liquidated damages is a substantial departure from the amount
Plaintiff
Ominde
originally
requested
via
the
information
he
provided in his complaint, the amount appears to be a fair and
reasonable
resolution
of
Plaintiff
Ominde’s
disputed
claims
because the parties “engaged in private settlement discussions
based
on
fairness
their
and
independent
reasonableness
calculations”
of
their
and
“attest
amicable
to
the
settlement.”
(Id.).
The Agreement also contains a general release of claims
beyond those specified in the amended complaint.
The Agreement
states, in relevant part:
The Plaintiff for himself, his heirs, and
personal representatives hereby releases and
forever
discharges
the
Defendants,
the
Defendants’ directors, officers, employees,
agents, principals, attorneys, predecessors,
and successors from any and all claims,
obligations, debts, demands, actions, causes
of
action,
suits,
accounts,
covenants,
contracts,
agreements,
and
damages
whatsoever of every name and nature, both in
law and equity, which Plaintiff now has or
in the future may have arising out of his
employment
with
Defendants
or
the
8
termination of his employment . . . from the
date of this Agreement back to the beginning
of time.
(ECF No. 44-1, at 3-4).
The release also prohibits Plaintiff
Ominde from “assist[ing] in the prosecution of any claim (if not
otherwise
compelled
to
do
so
by
legal
process)
or
[]
recover[ing] any money as a result of any claim pursued by the
U.S.
Department
of
Labor.”
(Id.,
at
4-5).
Finally,
the
Agreement includes “covenant not to sue” and “non-disparagement”
clauses that preclude Plaintiff Ominde from filing suit against
or publicly criticizing Defendants in the future.
(Id., at 5-
6).
Some courts have held that overly broad release provisions
can
render
an
FLSA
agreement
unreasonable
if
the
release
includes claims unrelated to those asserted in the complaint.
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
benefit
on
confers
the
an
uncompensated,
employer”
that
unevaluated,
fails
“judicial
and
unfair
scrutiny”);
McKeen–Chaplin v. Franklin 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
9
in
this
action
and
releases
unrelated claims”). Although 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
compensated reasonably for the release executed.”
employee
is
Villarroel v.
Sri Siva Vishnu Temple, No. GJH–I–T–02617, 2014 WL 7460967, at
*3 (D.Md. Dec.31, 2014); see also Duprey, 30 F.Supp.3d at 410
(wherein the court approved a settlement agreement that included
a general release of claims on the basis that the employee was
reasonably compensated for the release).
Because the $1,500
provided to Plaintiff Ominde in the Agreement appears to be a
fair and reasonable resolution of Plaintiff Ominde’s claims, the
amount also reflects fair compensation for the release and nondisparagement provisions executed.
C.
Attorneys’ Fees and Costs
Finally, the provisions regarding attorneys’ fees and costs
must also be assessed for reasonableness.
In assessing the reasonableness of the fee,
courts typically refer to the principles of
the traditional lodestar method as a guide,
even when the attorneys fees are based on a
contingency fee.
An attorneys fee award
negotiated pursuant to a contingent-fee
arrangement can be approved if a court finds
that (1) the fees were negotiated separately
from the damages, so that they do not
10
infringe on the employee’s statutory award,
and (2) they are reasonable under the
lodestar approach.
Hackett v. ADF Restaurant Invs., 259 F.Supp.3d 360, 367 (D.Md.
2016) (internal citations omitted).
lodestar
calculation
is
The starting point in the
multiplying
the
number
reasonably expended by a reasonable hourly rate.
of
hours
Robinson v.
Equifax Info. Servs., LLC, 560 F.3d 235, 243 (4th Cir. 2009).
“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.’”
Duprey, 30 F.Supp.3d at 412 (quoting Blum v. Stenson, 465 U.S.
886, 890 n.11 (1984)).
This court has established presumptively
reasonable rates in Appendix B to its Local Rules.
Plaintiff Ominde’s counsel state in the joint motion that
“[t]he total of Plaintiff’s attorneys’ fees in this matter are
now over $11,000.”
(ECF No. 44 ¶ 9).
also
“in
states
that
order
to
However, the Agreement
resolve
this
litigation,
Plaintiff’s counsel has agreed to the attorney fee payment set
forth in the Settlement Agreement and the Parties agree this is
a
fair
amount
reasonably
given
incurred
(Id., at 4).
in
the
actual
this
amount
matter
by
of
fees
Plaintiff’s
and
costs
counsel.”
In the agreement, Plaintiff Ominde’s counsel agree
11
to collect $1,500 in attorneys’ fees and costs.
fees appear to be reasonable.
The attorneys’
Plaintiff Ominde’s counsel do not
indicate the years of experience they possess1 or the number of
hours they spent working on his case.
However, even at the
minimum compensation rate of $150 set forth in Appendix B, the
settlement amount provides counsel with compensation for only
ten
hours
of
work
on
Plaintiff
Ominde’s
case.
Given
the
extensive docket, it is likely that Plaintiff Ominde’s counsel
dedicated more than ten hours of their time to this case.
Thus,
even without assessing counsels’ years of experience and the
exact amount of time they spent working on the case, it is clear
that
the
total
attorneys’
fees
in
the
amount
of
$1,500
are
reasonable and below the customary fee in Maryland for the legal
work involved.
1
From other cases in this court, the court can discern that
Mr. Lebau has practiced for over twenty-five years and billed in
2017 at the rate of $475 per hour. See Walters v. Tievy Elec.
Co., No. PX 16-3916, 2017 WL 818716, at *3 (D.Md. Mar. 2, 2017).
Mr. Wang was admitted to practice in 2012, and his rate is $300
per hour. See Plaintiffs’ Motion for Attorneys’ Fees, Membreno
v. Kargmans, Inc., No. 18-0332 (D.Md. July 3, 2018), ECF No. 213.
12
Conclusion
For the foregoing reasons, the joint motion for approval of
settlement agreement will be granted.
A separate order will
follow.
/s/
DEBORAH K. CHASANOW
United States District Judge
13
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