UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

TEMESGEN BELANGU,

Plaintiff,

v. Case No. 1:24-cv-354 (TNM)

MG LIQUORS, INC., et al.,

Defendants.

MEMORANDUM OPINION

Temesgen Belangu claims that he was underpaid for his work as a cashier at Barrel

House Liquors. So he brought a wage-and-hour lawsuit against Barrell House and its owner,

Mesfun Ghebrelul (collectively, “Barrel House”). The parties settled and now jointly ask the

Court to approve their settlement. The Court will approve that settlement because it is a fair and

reasonable resolution of a bona fide dispute, not the product of employer overreach, and the

result of arm’s length negotiating conducted by experienced counsel.

I.

Belangu was employed as a cashier at Barrel House Liquors for just over four years.

Compl. ¶ 7, ECF No. 1. Barrel House is a liquor store in Washington, D.C., owned and operated

by Mesfun Ghebrelul. Id. ¶ 4. As a cashier, Belangu worked the register, restocked shelves,

accepted deliveries, sold merchandise to customers, and prepared and delivered customer orders.

Id. ¶ 11. He worked at Barrel House from September 2019 until his employment was terminated

in October 2023. Id. ¶¶ 10, 20.

Barrel House set Belangu’s schedule. Id. ¶ 13. While the exact number varied, Belangu

regularly logged over 60 hours a week. Id. ¶ 14. He was paid an hourly wage for this work. When he was hired in September 2019, Barrel House promised that he would be paid around $14

per hour for his work. Id. ¶ 10. Over the four years he worked at Barrel House, his pay ranged

from $14 per hour at the start to $17 per hour when his employment was terminated. Id. ¶ 11.

Belangu claims that he was not properly compensated. He alleges that Barrel House paid

him at a rate less than minimum wage and failed to pay him overtime premiums for the hours he

worked over 40 hours per week. Id. ¶ 14. He also claims that he performed deliveries for Barrel

House via their third-party delivery application and did not receive all the tips he earned while

making these deliveries. Id. ¶ 19.

Belangu sued Defendants MG Liquors, Inc., d/b/a Barrel House Liquors, and its owner

Mesfun Ghebrelul under the Fair Labor Standards Act,

(FLSA), and the District

of Columbia Minimum Wage Revision Act,

(DCMWRA).

¶¶ 21–30.

In July 2024, Belangu filed a consent motion for settlement and notice of dismissal. See

Mot. for Settlement (Mot.), ECF No. 11. As part of the settlement, Barrel House agreed to pay

Belangu a total of $101,063.92.

. Barrel House agreed to make an initial lump-sum

payment of $41,063.92.

.1. It will then make twelve monthly payments of $5,000 each.

.2. Of that total, 25% is wage related damages and 75% is liquidated damages.

.

The Parties seek the Court’s approval of this joint settlement.

.

II.

In most cases, parties can privately settle a dispute and voluntarily dismiss a case. See

Fed. R. Civ. P. 41(a)(1). FLSA claims are different. Nearly 80 years ago, the Supreme Court

recognized that FLSA claims cannot be privately settled like most other claims. See Brooklyn

Sav. Bank v. O’Neil,

(1945); D.A. Schulte, Inc. v. Gangi,

(1946). The difference stems from the FLSA’s “statutory policy” of protecting workers. O’Neil,

2

. In the Court’s view, “allow[ing] waiver of statutory wages by agreement would

nullify the purposes of the Act.”

. Given the public policy friction, courts often

invalidate private FLSA settlements. See, e.g., Carillo v. Dandan Inc.,

(D.D.C. 2014) (“[P]rivate settlements that purport to bar further suit against an employer in

exchange for less than the full value of wages, overtime, and liquidated damages, to which the

employee is entitled under the FLSA, are invalid.”).

Yet there are still two ways parties to an FLSA claim can hammer out a settlement: by

agreeing to the supervision of the Secretary of Labor,

(c), or submitting the

settlement to be scrutinized and ratified by a “court of competent jurisdiction,”

§ 216(b); see

also Carillo, 51 F. Supp. 3d at 130–31 (explaining that courts in this district routinely review

FLSA settlements ex ante to avoid “leav[ing] the parties in an uncertain position”).

Belangu and Barrel House “have mutually sought judicial approval of their proposed

settlement.” Carrillo, 41 F. Supp. 3d at 131. So the Court will review it. But the Court will

limit its review to those terms “addressing the compromised monetary amounts to resolve the

pending wage and hour claims.” Id. at 134. It will not pass on the enforceability of other

provisions in the Agreement. See id.

III.

The Court analyzes FLSA settlement agreements in two steps. “First, the Court must

ensure that the agreement resolves a bona fide dispute—that is, it reflects a reasonable

compromise over issues that are actually in dispute.” Davis v. Kettler Mgmt., 21-cv-3351,

, at *1 (D.D.C. Nov. 22, 2022) (cleaned up). Second, the Court must confirm that

“the agreement is substantively fair.”

The Court analyzes each component in turn.

3 A.

The Agreement resolves a bona fide dispute. “A settlement is bona fide if it reflects a

reasonable compromise over issues that are actually in dispute, since merely waiving a right to

wages owed is disallowed” under Supreme Court precedent. Carillo,

(cleaned up). In this case, the Agreement resolves several genuine disputes, including the

number of hours Plaintiff worked and whether his wages were improper under the FLSA and

DCMWRA. Mot. at 3. The parties also “spent significant time discussing the nature and extent

of Plaintiff’s claims and exchanging documents in support of their respective positions.” Mot. at

2. The Agreement reflects the parties have hashed out genuine disagreements. Belangu is not

merely waiving away his rights. See Trout,

, at *4.

B.

The Agreement also fairly resolves the substance of Plaintiffs’ claims. Three factors bear

on the fairness of an FLSA settlement: (1) whether the settlement stemmed from employer

overreach; (2) whether it was the “product of negotiation between represented parties following

arm’s length bargaining”; and (3) “whether there exist serious impediments to the collection of a

judgment by the plaintiffs.” Carrillo,

(cleaned up). The Court considers

each factor below, “mindful of the strong presumption in favor of finding the settlement fair.”

(cleaned up).

First, the Agreement shows no signs of employer overreach. Courts commonly evaluate

overreach by (1) comparing the plaintiff’s position on the settlement amount to the defendant’s

position, and (2) examining the experience of parties’ counsel. See Sarceno, 78 F. Supp. 3d at

451. The first factor does not apply here since the parties “have not provided an estimate as to

the total amount of money” the plaintiffs and the defendants each claim to be owed. Id. So

4 “evaluation of where the settlement amount falls between the plaintiffs’ position and the

defendants’ [is] impossible.” Id.

Consider the other factor for evaluating overreach: the experience of counsel. When the

parties’ counsel have “extensive experience in pursuing and defending FLSA actions generally

and familiarity with the underlying facts,” courts can credit their representation “that the amounts

agreed upon are a reasonable compromise.” Sarceno, 78 F. Supp. 3d at 451 (cleaned up).

Plaintiffs are represented by Andrew Bagley and Cori Schreider of Crowell & Moring LLP.

Mot. at 5. Both are “experienced counsel” and Bagley, who is senior counsel at Crowell, “has

more than 25 years’ experience in wage-hour matters.” Id. at 4. In their estimation, the

Settlement Agreement is “fair and reasonable.” Id. at 5. Given that there is a “presumption in

favor of finding a settlement fair,” Sarceno, 78 F. Supp. 3d at 451, and that Belangu is

represented by experienced counsel, the Court finds that there has been no employer overreach.

Second, the Settlement stems from “negotiation between represented parties” following

an “arm’s length bargaining.” Trout,

, at *3. The parties negotiated for

“months.” Mot. at 4. They exchanged information, records, and wage payments and “conducted

thorough calculations.”

And the Settlement Agreement reflects a “compromise” following

those extensive negotiations.

Both parties were represented by counsel during this process.

. So from a process perspective, the Agreement “bears all the indicia of one that leads to

a just outcome.” Carrillo,

.

Third, the Agreement allows Belangu to recover now and removes litigation-associated

impediments to recovery. “[B]y settling now, [Belangu] will obtain a recovery without further

delay and without incurred additional litigation costs and additional attorney’s fees and costs.”

Carrillo,

(cleaned up). Under the Agreement’s payment plan, Belangu

5 would receive his agreed upon compensation in one year, see Settlement Agreement ¶ 2, “which

is undoubtedly quicker than this case could proceed to judgment given the typical time frame for

discovery and the Court’s heavy trial calendar.” Trout,

, at *6.

In sum, the parties’ Agreement reflects a fair resolution to a bona fide dispute.

IV.

The Agreement reasonably and fairly resolves the parties’ bona fide wage-and-hour

dispute. So the Court will approve it. A corresponding Order will issue today.

2024.09.11 11:56:21 -04'00' Dated: September 11, 2024 TREVOR N. McFADDEN, U.S.D.J.

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