GABRIELYAN v. S.O. ROSE APARTMENTS LLC et al

Filing 19

OPINION fld. Signed by Judge Claire C. Cecchi on 10/5/15. (sr, )

NOT FOR PUBLICATION

CLOSED

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

KASPAR GABRIELYAN,

Civil Action No.: 1 5-cv- 1771 (CCC-MF)

Plaintiff,
OPINION
V.

5.0. ROSE APARTMENTS LLC et aL,
Defendants.
CECCHI, District Judge.
I.

INTRODUCTION

This matter comes before the Court upon the Joint Motion of Plaintiff Kaspar Gabrielyan
(“Plaintiff’) and Defendants S.0. Rose Apartments LLC, Village Court Apartments LLC, and Tuli
Realty LLC (collectively, “Defendants”) to approve the parties’ settlement. ECF No. 1$. The
Court did not hear oral argument pursuant to federal Rule of Civil Procedure 78. Based on the
reasons that follow, the motion is granted.
IL

BACKGROUND

On March 10, 2015, Plaintiff brought the instant action against Defendants for violations
of the fair Labor Standards Act (“fLSA”), 29 U.S.C. § 201, et seq., and for violations of the
analogous state statute, the New Jersey Wage and Hour Law (“NJWHL”), N.J. Stat. Ann. § 34:1156a, et seq. See generally Compl., ECF No. 1. In addition, Plaintiff brought a common law
conversion claim. Id. at ¶ 63.
The Complaint alleges that the Defendants willfully violated the fLSA and NJWHL by
failing to pay Plaintiff for all overtime hours worked. Id. at ¶J 40, 60. On April 20, 2015,
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Defendants answered the Complaint, denying all material factual allegations.

See generally

Answer, ECF No. 13. The parties then began settlement discussions and, on May 14, 2015,
Defendants filed a notice of settlement and proposed plan for the Court’s approval. ECF No. 16.
On June 22, 2015, the parties jointly moved for approval of the settlement agreement, attaching a
copy of the settlement agreement and general release (“Settlement Agreement”), and a letter
describing the Settlement Agreement (“Settlement Statement”). ECF No. 18. Following the
Court’s approval of the proposed settlement agreement, Plaintiff has agreed to file a stipulation of
dismissal with prejudice. (Settlement Agreement ¶ 7.)
III.

LEGAL STANDARD

“The FLSA establishes federal minimum-wage, maximum-hour, and overtime guarantees
that cannot be modified by contract.” Davis v. Abington Mem’l Hosp., 765 F.3d 236, 241 (3d Cir.
2014) (quoting Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523, 1527 (2013)). If employers
violate the FLSA’s minimum wage and overtime provisions, codified at 29 U.S.C.

§ 206 and 207,

respectively, employers may be liable to affected employees “in the amount of their unpaid
minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional
equal amount as liquidated damages.” Id. (citing 29 U.S.C.

§ 216(b)).

District courts in the Third Circuit have held that FLSA claims can be settled in two ways:
(1) with the Department of Labor supervising the payment of unpaid minimum wages or overtime
compensation pursuant to 29 U.S.C.
settlement under 29 U.S.C.

§ 216(c); or (2) with the district court’s approval of a

§ 2 16(b). See Bredbenner v. Liberty Travel, Inc., Nos. 09-905, 09-

1248 and 09-4587, 2011 WL 1344745, at *18 (D.N.J. Apr. 8,2011) (citing Lynn’s Food Stores,
Inc. v. United States, 679 F.2d 1350, 1354 (11th Cir. 1982)); see also Bettger v. Crossmark, Inc.,
No. 13-2030, 2015 WL 279754, at *3 (M.D. Pa. Jan. 22, 2015); Brumleyv. Camin Cargo Control,

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Inc., Nos. 08-1798, 10-2461 and 09-6128, 2012 WL 1019337, at *1 (D.N.J. Mar. 26, 2012). As
to the requirements for settlement approval, district courts in the Third Circuit have held that the
court must determine that “the compromise reached ‘is a fair and reasonable resolution of a bona
fide dispute over FLSA provisions.” Brumley, 2012 WL 1019337, at *2 (quoting Lynn’s Food,
679 F.2d at 1354); see also In re Chickie’s & Pete’s Wage & Hour Litig., No. 12-6820, 2014 WL
911718, at *2 (E.D. Pa. Mar. 7, 2014); Cuttic v. Crozer-Chester Med. Ctr., 268 F. Supp. 2d 464,
466 (E.D. Pa. 2012); Bredbenner, 2011 WL 1344745, at *18.
A proposed settlement resolves a “bona fide dispute” when it “reflect[s] a reasonable
compromise over issues, such as FLSA coverage or computation of back wages, that are actually
in dispute,” rather than “a mere waiver of statutory rights brought about by an employer’s
overreaching.” Chickie’s, 2014 WL 911718, at *2 (quoting Lynn’s Food, 679 F.2d at 1354). In
determining whether a compromise is fair and reasonable, courts in this Circuit consider both
(1) whether the compromise is fair and reasonable to the employee, and (2) whether the
compromise otherwise frustrates the implementation of the FLSA.

Singleton v. First Student

Mgmt. LLC, No. 13-1744, 2014 WL 3865853, at *8 (D.N.J. Aug. 6, 2014); Chickie’s, 2014 WL
91171$, at *2; Brumley, 2012 WL 1019337, at *4

Thus, in determining whether to approve a settlement for FLSA claims, a court must
engage in a three-part analysis. First, the court must determine that the settlement concerns a bona
fide dispute. Second, the court must determine that the settlement is fair and reasonable to the
Plaintiff-employee. And, third, the court must determine that the agreement does not frustrate the
implementation of the FLSA in the workplace.

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IV.

DISCUSSION’
The Court approves the parties’ settlement because the compromise reached (1) resolves a

bona fide dispute over fLSA provisions, (2) is fair and reasonable to Plaintiff, and (3) does not
frustrate the implementation of the FLSA.
first, there is a bona fide dispute between the parties. The dispute concerns whether
Plaintiff is a covered person under the F LSA. Defendants allege that Plaintiff is exempt from
fLSA coverage and therefore not entitled to overtime wages. Plaintiff alleges that he is not exempt
from F LSA coverage and therefore entitled to overtime wages. Plaintiffs Complaint raises factdependent allegations under both state and federal laws. In their Answer, Defendants deny all
material factual allegations. In their Settlement Statement, “Defendants maintain Plaintiff is not
entitled to any overtime pay because he was engaged in exempt work, as it is defined by the federal
and state laws.” (Settlement Statement at 2.) for these reasons, there is a bona fide dispute
between the parties.
Second, the settlement agreement is fair and reasonable to Plaintiff. It appears that Plaintiff
is being fully compensated for his alleged overtime hours and is receiving an equivalent sum in
liquidated damages. Plaintiff asserts that he averaged about seven hours of overtime per week,
which amounts to approximately $2,200 in claimed back wages. (Settlement Statement at 2.)
Under the agreement, Defendants will pay Plaintiff $2,312 for unpaid wages and $2,312 for
liquidated damages. (Settlement Agreement

¶

1.) In addition, Defendants will pay $2,876 to

‘The parties have not requested approval of the settlement as it pertains to Plaintiffs
state law claims under the NJWHL or Plaintiffs common law conversion claim, as court
approval of a settlement of those claims is not required. See Weismantle v. Jali, No. 131087, 2015 WL 1866190, at *1 (W.D. Pa. Apr. 23, 2015) (noting that although parties
seek approval of the settlement of FLSA claims, their parallel state law claims “do not
appear to require any sort of Court approval to be lawfully settled”). As such, this
opinion only discusses the settlement as it pertains to Plaintiffs FLSA claims.
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Plaintiffs counsel as an award for attorneys’ fees and expenses.

Id.

Thus, the settlement

agreement is fair and reasonable.
Third, the settlement agreement does not frustrate the purposes of the FLSA. Defendants
continue to deny liability. (Settlement Agreement ¶4 (“The Parties acknowledge that Defendants
have consistently denied, and continue to deny, any and all allegations of wrongdoing.”)) Thus,
resolution of these claims through trial would be expensive and difficult for Plaintiff. As discussed
above, there is a bona fide dispute between the parties and the compromise reached is fair and
reasonable. Thus, resolution of these claims through settlement resolves a bona fide dispute
without violation of the purposes of the FLSA.
V.

CONCLUSION

For the reasons above, the Court grants the parties’ motion to approve the settlement. An
appropriate Order accompanies this Opinion.

DATED: October 5, 2015

CLAIRE C. CECCHI, U.S.D.J.

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