Azcao Carrillo v. Dandan, Inc.
2014 U.S. Dist. LEXIS 86938
| D.D.C. | 2014Background
- Plaintiffs Hugo Azcano Carrillo and Saul Molina Chaviva were flagmen employed by Dandan, Inc.; they alleged unpaid overtime (≈47–48 hours/week) and sued under the FLSA, DCMWA, and DCPCWA.
- Plaintiffs sought unpaid overtime, liquidated damages, and attorneys’ fees; defendants disputed hours and argued plaintiffs overstated time worked.
- After 16 months of negotiation including two months of court mediation, parties agreed to settle for $15,500 total: $7,000 to plaintiffs and $8,500 to plaintiffs’ counsel for fees.
- Settlement included a broad release of claims (covering federal and local employment statutes and various torts), a mutual non‑disparagement clause, and a “stay away” provision.
- Parties jointly moved for court approval of the settlement and dismissal under Fed. R. Civ. P. 41(a)(1).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether private FLSA settlements in a filed suit require court approval | Settlement is a consensual resolution; parties can dismiss under Rule 41 | Rule 41 dismissal may be constrained by FLSA policy; FLSA preserves Secretary of Labor role | Court reviewed settlement despite Rule 41; approval not strictly required by Circuit precedent but court will scrutinize when parties request approval |
| Whether the agreement resolves a bona fide dispute (so waiver is permissible) | Plaintiffs contend factual disputes over timekeeping, travel pay, and advances justify compromise | Defendants contend plaintiffs overstated hours and liability is minimal | Court found bona fide disputes exist and settlement reflects reasonable compromise |
| Whether the monetary terms are fair given attorneys’ fees disparity | Plaintiffs emphasize prompt recovery and arm’s‑length negotiation | Defendants note plaintiffs’ attorneys receive more than plaintiffs and challenge amounts owed | Court expressed reluctance about fee-to-client ratio but approved the FLSA‑related monetary compromise as fair overall |
| Whether non‑monetary terms (broad release, non‑disparagement, stay‑away) should be approved | Plaintiffs accepted those terms as part of settlement | Defendants included broad terms to secure finality | Court declined to opine on enforceability of non‑FLSA provisions and approved only FLSA‑related monetary terms |
Key Cases Cited
- Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697 (Sup. Ct.) (FLSA rights are mandatory; waivers of liquidated damages invalid absent bona fide dispute)
- D.A. Schulte, Inc. v. Gangi, 328 U.S. 108 (Sup. Ct.) (private compromises reducing FLSA wages/damages are invalid absent bona fide dispute; judicial scrutiny of stipulated judgments noted)
- Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728 (Sup. Ct.) (FLSA rights may be asserted despite grievance processes; protections are substantive)
- Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350 (11th Cir.) (private FLSA settlements enforceable only when Secretary supervises payment or court approves settlement as fair resolution of bona fide dispute)
- Am. Sec. Vanlines, Inc. v. Gallagher, 782 F.2d 1056 (D.C. Cir.) (public policy favors voluntary settlements and finality of judgments)