De la Cruz v. Chopra et al
Filing
11
MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 5/21/2018. (sat, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
NOHELIA DE LA CRUZ
:
v.
:
Civil Action No. DKC 18-0337
:
VIPPAN CHOPRA, et al.
:
MEMORANDUM OPINION
Presently pending and ready for resolution in this Fair
Labor Standards Act (“FLSA”) case is the parties’ joint motion
for approval of their settlement agreement.
(ECF No. 10).
The
issues have been briefed, and the court now rules, no hearing
being deemed necessary.
settlement
reasonable
agreement
Local Rule 105.6.
(the
resolution
of
“Agreement”)
a
bona
Because the proposed
represents
fide
FLSA
a
fair
dispute,
and
the
settlement will be approved.
I.
Background
Plaintiff Nohelia de la Cruz was employed by Defendants
from approximately 2004 to April 5, 2016.
Plaintiff
alleges
that
during
the
(ECF No. 10-1, at 1).
relevant
time
period
she
worked 55 hours per week on average, at a rate of $12 per hour
that increased to $12.25 per hour.
1).
(ECF No. 1 ¶ 11; 10-1, at
Plaintiff alleges that Defendants either did not pay her
for overtime hours worked or paid her overtime at the regular
pay
rate.
(ECF
No.
1
¶¶
15,
17,
18).
Based
on
these
allegations, Plaintiff filed a complaint asserting violations of
the Fair Labor Standards Act (the “FLSA”), 29 U.S.C. § 201, et
seq. (Count I); the Maryland Wage and Hour Law (the “MWHL”),
Md.Code Ann., Lab. & Empl. § 3-401, et seq. (Count II); and the
Maryland Wage Payment and Collection Law (the “MWPCL”), Md.Code
Ann., Lab. & Empl. § 3-501, et seq. (Count III).
(ECF No. 1).
On May 3, the parties jointly moved for approval of the portion
of the Agreement that resolves the FLSA claim.
II.
(ECF No. 10).
Analysis
Because Congress enacted the FLSA to protect workers from
the poor wages and long hours that can result from significant
inequalities
employees,
in
the
bargaining
statute’s
power
between
provisions
are
employers
mandatory
and
and
are
generally not subject to bargaining, waiver, or modification by
contract or settlement.
U.S. 697, 706-07 (1945).
that
a
district
court
See Brooklyn Sav. Bank v. O’Neil, 324
One exception to the general rule is
can
approve
a
settlement
between
an
employer and an employee who has brought a private action for
unpaid wages pursuant to 29 U.S.C. § 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
2
States, 679 F.2d 1350, 1353, 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 motions for approval of 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.
(citing cases).
Duprey, 30 F.Supp.3d at 407-08
An FLSA settlement generally should be approved
if it reflects “a fair and reasonable resolution of a bona fide
dispute over FLSA provisions.”
at 1355.
See Lynn’s Food Stores, 679 F.2d
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.”
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, including: “(1) the extent of
discovery
that
has
proceedings,
including
duration
the
of
taken
place;
the
(2)
the
complexity,
litigation;
(3)
the
stage
expense
absence
of
and
of
the
likely
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
3
in
relation
to
the
potential recovery.”
Duprey, 30 F.Supp.3d at 409.
Finally,
where a proposed settlement of FLSA claims 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.’”
Lane v. Ko–Me, LLC, No. DKC-10-2261, 2011 WL 3880427, at *3
(Aug. 31, 2011) (citation omitted).
A.
Bona Fide Dispute
“In deciding whether a bona fide dispute exists as to a
defendant’s
pleadings
recitals
liability
in
in
the
the
F.Supp.3d at 408.
under
case,
the
along
proposed
FLSA,
with
settlement
the
courts
examine
the
representations
and
agreement.”
Duprey,
30
Here, a review of the pleadings, along with
the parties’ joint submission regarding settlement, demonstrates
that while Plaintiff claims that she was not paid at the proper
rate or at all for her overtime hours worked, Defendants contend
that Plaintiff was properly paid for all hours worked.
Defendants assert affirmative defenses.
Further,
(ECF No. 7, at 4).
Thus, a bona fide dispute exists as to Defendants’ liability
under the FLSA.
B.
Upon
Fairness & Reasonableness
review
of
the
parties’
submissions
and
after
considering the relevant factors, see Duprey, 30 F.Supp.3d at
4
409,
the
Agreement
appears
compromise of the parties’
to
be
a
bona fide
fair
and
dispute.
reasonable
Although the
parties agreed to settle at an early stage of the proceedings,
before any formal discovery has taken place, the parties engaged
in lengthy informal discovery and settlement discussions where
counsel argued the merits of Plaintiff’s claims and addressed
issues
such
as
whether
the
records
kept
by
Defendants
accurate and whether Plaintiff was properly paid.
1, at 1, 2).
were
(ECF No. 10-
Additionally, the Agreement is the product of
negotiations between parties represented by counsel, and there
is no evidence that the Agreement is the product of fraud or
collusion.
As to the relationship between the amount of settlement and
Plaintiff’s potential recovery, the Agreement appears to be fair
and
reasonable.
Plaintiff
calculated
that
she
was
owed
approximately $4,140 in overtime pay, not including liquidated
damages.
(Id.
Defendants’
at
FLSA
2).
Given
liability
that
would
losing
result
in
on
no
the
issue
of
recovery
of
overtime pay, the settlement amount appears reasonable and fair.
C.
Attorney’s Fees and Costs
Finally,
the
Agreement’s
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
5
lodestar
method
as
a
guide,” Hackett v. ADF Restaurant Invs., 259 F.Supp.3d 360, 367
(D.Md. 2016), which multiplies the number of hours reasonably
expended by a reasonable hourly rate, 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
comparable
skill,
services
experience,
by
and
lawyers
of
reasonably
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’s attorney states that he has over 20 years of
experience in the area of labor and employment law, extensive
experience in FLSA matters, and typically charges an hourly fee
of $425.
(ECF No. 10-1, at 5).
According to Appendix B, a
reasonable hourly fee for attorneys with more than 20 years of
experience
ranges
from
$300-475.
Plaintiff’s
counsel
states
that he has spent approximately ten hours working on this case
and approximately $500 in costs.
(Id.).
A total fee of $1,500
is equivalent to an hourly rate of $150, which falls well below
the
reasonable
experience.
fee
for
attorneys
with
20
years
or
more
of
Thus, pursuant to the Maryland guidelines, a total
amount of attorney’s fees of $1,500 is reasonable and below the
customary fee in Maryland for the legal work involved.
6
III. 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
7
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