Barbecho et al v. M.A. Angeliades, Inc. et al

Filing 123

REVISED OPINION AND ORDER. I approve the settlements in this matter between defendants and plaintiffs Julio Ortiz, Trinidad Ruiz, Angel Zabala and Fredy Gavalines. (Signed by Magistrate Judge Henry B. Pitman on 6/21/2016) Copies transmitted By Chambers. (rjm)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-----------------------------------X
LUIS BARBECHO, on behalf of
himself and others similarly
situated, et al.,

USDCSDNY
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DOCUMENT \
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ELECTRONICALLY FILED 1\l,~
DOC #: ------r--r_~
DATE FILED: Co 1 /t6 _ _\ 1

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11 Civ. 1717 (HBP)

Plaintiffs,

REVISED OPINION
AND ORDER 1

-againstM.A. ANGELIADES, INC., et al.,
Defendants.

-----------------------------------X

PITMAN, United States Magistrate Judge:

I.

Introduction

This is a collective action brought under the Fair
Labor Standards Act ("FLSA"), 29 U.S.C.
New York Labor Law ("NYLL").

§§

201 et seq. and the

Plaintiffs have also asserted a

breach of contract claim as third-party beneficiaries.

The

matter is currently before me on the parties' application to
approve the settlements agreed to so far by 4 more of the 33

1

This Opinion and Order corrects a typographical error
appearing at page 4 of the Opinion and Order I issued on June 16,
2016.
In all other respects, it is identical to the June 16,
2016 Order.

plaintiffs. 2

The parties have consented to my exercising plenary

jurisdiction pursuant to 28 U.S.C.

§

636(c)

The action arises out of work performed by plaintiffs
in connection with contracts between the defendants and various
public agencies, including the New York City Transit Authority
(

11

NYCTA 11 ) , the New York City Housing Authority, the New York City

Department of Corrections and the New York City School Construetion Authority.

Plaintiffs allege that they worked for defen-

dants as carpenters and laborers on these projects.

The con-

tracts required defendants to pay the plaintiffs a prevailing
rate of wage and also required that the plaintiffs be paid at
least one and one-half times their regular rate for work in
excess of forty hours per week and for weekend work.

Plaintiffs

allege that they worked Monday through Friday for forty hours and
sometimes were required to work an additional sixteen to twentyfour hours on weekends.

For the weekend work, plaintiffs claim

they were paid less than their regular hourly rate.
In 2009, several of the defendants were indicted for
falsifying business records and defrauding employees by underpaying them on four NYCTA projects.

Several of the defendants

pleaded guilty to some of the charges against them, and a resti-

2

By Order dated April 1, 2016, I approved the settlements
that had been reached with respect to 21 of the plaintiffs.
2

tution fund was established to provide compensation to those
workers who were underpaid.

The restitution fund, however, was

limited to the projects that were the subject of the indictment.
Additionally, in order to receive payment from the restitution
fund, a worker was required to release all claims against the
defendants.

Accordingly, many of defendants' employees did not

seek payment from the fund.
With respect to almost all plaintiffs, defendants do
not dispute that some wages are owed.
dispute how much is owed.

The parties do vigorously

In support of their contention that

plaintiffs' claims for unpaid wages after 2008 are exaggerated,
defendants note that commencing in 2008, an independent monitor
was installed to oversee defendants' payroll practices and that
training sessions for defendants' employees were conducted in
2008 at which the employees were advised of their rights under
the FLSA and the NYLL.

Defendants also note that NYCTA conducted

an audit to determine what was owed to employees who worked on
NYCTA projects, and the results of that audit disclosed unpaid
wages in amounts far smaller than those claimed by plaintiffs.
As additional evidence that plaintiffs' claims are exaggerated,
defendants cite plaintiffs' interrogatory answers which defendants argue are inconsistent with plaintiffs' present claims and
work site access records maintained in connection with several of
3

the projects at issue.

For security reasons, several of the work

sites at issue recorded when workers entered and when they left
the site.

Defendants claim that these records demonstrate that

some of the plaintiffs could not have worked all the hours that
they claim.
On November 10, 2015, the late Honorable Miriam Goldman
Cedarbaum, United States District Judge, granted in part and
denied in part defendants motion for partial summary judgment.
Specifically, Judge Cedarbaum granted defendants' motion to
dismiss the NYLL claims but denied the motion to dismiss the
breach of contract claims. 3

Almazo v. M.A. Angeliades, Inc., 11

Civ. 1717 (MGC), 2015 WL 6965116 (S.D.N.Y. Nov. 10, 2015).
Subsequent to Judge Cedarbaum's decision, I began
conducting day-long settlement conferences.

To date, conferences

were held on January 15, 22, March 29, and May 16, 2016.

The

claims of 21 plaintiffs were settled at the conferences held in
January and March.

After negotiations, the following 4

plaintiffs agreed to settle their claims either at or after the
May 16 conference:
Plaintiff

Amount Claimed

Julio Ortiz

$6,000.00

3

Settlement Amount
$4,000.00

Defendants' motion did not seek dismissal of the FLSA
claims.
4

Trinidad Ruiz

$357,237.50

$21,500.00

Angel Zabala

$200,951.52

$5,000.00

$57,770.52

$35,000.00

Fredy Gavalines

Only Zabala was present at the May 16 settlement
conference, with counsel and an interpreter.

I questioned Zabala

personally at the conclusion of the conference and confirmed that
he agreeing to accept $5,000.00 in full and final satisfaction of
that his claims.

The 3 remaining settling plaintiffs listed

above settled their claims as a result of private discussions
between counsel.
Counsel for both sides have requested that I approve
these settlement at this point so that payments to the plaintiffs
who have settled can be made promptly.
Court approval of an FLSA settlement is appropriate
"when [the settlement] [is] reached as a result of
contested litigation to resolve bona fide disputes."
Johnson v. Brennan, No. 10 Civ. 4712, 2011 WL 4357376,
at *12 (S.D.N.Y. Sept. 16, 2011).
"If the proposed
settlement reflects a reasonable compromise over contested issues, the court should approve the settlement.11
Id. (citing Lynn's Food Stores, Inc. v. United
States, 679 F.2d 1350, 1353 n. 8 (11th Cir.1982)).
Agudelo v. E & D LLC, 12 Civ. 960 (HB), 2013 WL 1401887 at *1
(S.D. N.Y. Apr. 4, 2 013)

( Baer, D. J. ) .

11 Typically, courts regard

the adversarial nature of a litigated FLSA case to be an adequate
indicator of the fairness of the settlement."

Beckman v.

Keybank, N. A. , 2 9 3 F . R. D. 4 6 7 , 4 7 6 ( S . D. N.Y. 2 013)
5

(Ellis, M. J. ) ,

citing Lynn's Food Stores. Inc. v. United States, 679 F.2d 1350,
1353-54 (11th Cir. 1982).
I conclude that the settlements set forth above are
fair and reasonable.

Although the settlements are generally less

than one half of each total claim, that fact does not render them
deficient.

Many of the sums plaintiffs claim still include an

amount for liquidated damages under the NYLL.

In light of Judge

Cedarbaum's decision dismissing the NYLL claims, these damages
are no longer available.

Second, the inconsistencies between the

amounts claimed by plaintiffs and their interrogatory answers and
the site access records constitute compelling evidence that
plaintiffs' provable damages are not as great as they claim.
Finally, I have confidence that the settlements are reasonable
based on their being agreed to by plaintiffs' counsel.

Plain-

tiffs' counsel was exceptionally well prepared at all of the
settlement conferences conducted to date and was fully familiar
with the claims of each plaintiff and the pertinent legal and
factual issues.

Given the exceptional diligence and zeal with

which plaintiffs' counsel represented their clients, I am confident that the settlements are fair.

4

4

I do not address the fee arrangement between plaintiff and
their counsel because I do not believe I am required to do so
under Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199 (2d
(continued ... )

6

Accordingly, I approve the settlements in this matter
between defendants and plaintiffs Julio Ortiz, Trinidad Ruiz,
Angel Zabala and Fredy Gavalines.
Dated:

New York, New York
June 21, 2016
SO ORDERED

I

HENR~

/~

United States Magistrate Judge
Copies transmitted to:
All Counsel

4

continued)
Cir. 2015), cert. denied, 136 S. Ct. 824 (2016). As described in
Cheeks, the purpose of the FLSA is to regulate the relationship
between an employee and her employer and to protect the employee
from over-reaching by the employer.
796 F.3d at 206.
I do not
understand the FLSA to regulate the relationship between the
employee as plaintiff and his counsel or to alter the freedom of
contract between a client and his attorney.
( •••

7