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

Filing 133

OPINION AND ORDER: The matter is currently before me on the parties' application to approve the settlements agreed to by eight of the more than 33 plaintiffs. The parties have consented to my exercising plenary jurisdiction pursuant to 28 U.S.C. § 636(c). (As further set forth in this Order.) Accordingly, within 30 days of the date of this Order, the parties are to submit either revised settlement agreements that eliminate the foregoing issue or a memorandum of law explaining why the proposed settlement agreements should be approved in their present form. (Signed by Magistrate Judge Henry B. Pitman on 3/30/2017) Copies Sent By Chambers. (cf)

-----------------------------------x

USDCSDNY
DOCUMENT
ELECTRONICALLY F1LED 1

LUIS BARBECHO, on behalf of

DATE FiLED: 1{_~!__:-;::-:1 i
_,.,...~1'11';1~~

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

h

DOC#:

.

himself and others
similarly situated, et al.,

11 Civ. 1717

I

q ....

(HBP)

Plaintiffs,
OPINION
AND ORDER

-againstM.A. ANGELIADES,

INC., et al.,
Defendants.

-----------------------------------x
PITMAN, United States Magistrate Judge:

This is a collective action brought under the Fair
Labor Standards Act

(the "FLSA"), 29 U.S.C. §§ 201 et

.§.fill.,

and

the New York Labor Law (the "NYLL").

Plaintiffs have also

asserted a breach of contract claim.

The matter is currently

before me on the parties' application to approve the settlements
agreed to by eight of the more than 33 plaintiffs. 1

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 defendants and various

1

By Orders dated April 1, 2016 and June 21, 2016, I approved
the settlements that had been reached with respect to 25 of the
plaintiffs.

public agencies, including the New York City Transit Authority
(the "NYCTA"), the New York City Housing Authority, the New York
City Department of Correction and the New York City School
Construction Authority.

Plaintiffs allege that they worked for

defendants as carpenters and laborers on these projects.

The

contracts required defendants to pay plaintiffs a prevailing wage
rate and required that plaintiffs be paid at least one and onehalf 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 twenty-four 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, and a restitution 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.

2

Accordingly, many of defendants' employees did not seek payment
from the fund.
Defendants concede that almost all plaintiffs are owed
some wages.
owed.

However, the parties vigorously dispute how much is

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 in 2008 training
sessions for defendants' employees were conducted at which the
employees were advised of their rights under the FLSA and NYLL.
Defendants also note that the NYCTA conducted an audit to determine what was owed to employees who worked on NYCTA projects, and
that audit disclosed unpaid wages in amounts far smaller than
those claimed by plaintiffs.

As additional evidence that plain-

tiffs' claims are exaggerated, defendants cite plaintiffs'
interrogatory answers which defendants argue are inconsistent
Defendants also cite work-site

with plaintiffs' present claims.

access records maintained in connection with several of the
projects at issue; for security reasons, sign-in/sign-out logs
were maintained at several of the work sites at issue.

De fen-

dants claim that these records demonstrate that some of the
plaintiffs could not have worked all the hours that they claim.

3

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. 2
Civ. 1717

Almazo v. M.A. Angeliades,

Inc., 11

(MGC), 2015 WL 6965116 (S.D.N.Y. Nov. 10, 2015)

(Cedarbaum, D.J.), reconsideration denied, 2016 WL 5719748
(S.D.N.Y. Sept. 29, 2016)

(Pitman, M.J.).

Subsequent to Judge Cedarbaum's decision, I began
conducting day-long settlement conferences.

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, four other plaintiffs agreed to

settle their claims either at or after the May 16 conference.
Finally, in August 2016 and November 2016, the following eight
plaintiffs agreed to settle their claims:
Plaintiff

Amount Claimed

Settlement Amount

$86,242.00

$18,000.00

Luis Terra

$172,531.28

$25,000.00

Jose Barbecho

$168,391.86

$25,000.00

Juan Siavichay

2

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

Luis Barbecho

$209,236.32

$50,000.00

Efrain Fernandez

$108,216.00

$25,000.00

Wilson Ortiz

$130,945.92

$45,000.00

Crecensiano Ruiz

$152,785.44

$75,000.00

Miguel Yuquilima 3

$185,401.92

$45,000.00

The parties have also agreed that defendants will pay
an additional 1/3 of the total settlement amount of the August
2016 agreement and an additional 1/6 of the total settlement
amount of the November 2016 agreement as attorneys' fees and
costs.
A preliminary review of the proposed settlements
reveals that I cannot approve them in their current form because
each contains a general release that runs only in favor of
defendants.

In relevant part, the release reads as follows:

[Each plaintiff] hereby releases and forever discharges
defendants .
. from any and all actions, causes of
action,
. claims .
. whatsoever, in law or equity, he ever had, now has, or shall have against [the
defendants] as of the Date of this Release, on the
basis of any local, state or federal law, regulation or
ordinance, New York public policy, contract, tort, or
common law, or other laws, rules, regulations and/or
guidelines, constitutions, ordinances, or any other
claim for unpaid wages or salary, back pay, fringe
benefits, liquidated damages, interest or compensation
of any kind whatsoever against [the defendants], the

3

Siavichay and Tierra settled their claims in August 2016,
and the other plaintiffs settled their claims by a separate
agreement in November 2016.
5

[plaintiff]
. ever had, now ha[s] or hereinafter
can, shall or may have, for, upon, or by reason of any
matter, cause or thing whatsoever from the beginning of
the world to the day of the date of this RELEASE.
(Letter from Melissa S. Chan, Esq., to the undersigned, dated
Aug. 19, 2016, Ex. 2 to Stipulation of Partial Settlement; Letter
from Melissa S. Chan, Esq., to the undersigned, dated Dec. 1,
2016, Ex. 2 to Stipulation of Settlement).
This release is not limited to wage-and-hour issues or
to claims at issue in this lawsuit; specifically, the plaintiffs
would be releasing all claims for fringe benefits, liquidated
damages, interest or compensation of any kind, no matter the
source of the claim.

Numerous judges in this Circuit have

rejected general releases in FLSA settlement agreements that are
not limited to wage-and-hour issues.
Central Cafe & Deli, 15 Civ. 7942
(S.D.N.Y. Dec. 19, 2016)

See Leon-Martinez v.

(HBP), 2016 WL 7839187 at *l

(Pitman, M.J.)

(collecting cases); see

also Boyle v. Robert M. Spano Plumbing & Heating,
2899 (KMK), 2016 WL 1688014 at *3
(Karas, D. J. )

Inc., 15 Civ.

(S.D.N.Y. Apr. 27, 2016)

(approving "broad" release because it was limited

to "'conduct set forth in the Lawsuit including, claims arising
under or pursuant to the Fair Labor Standards Act, 29 U.S.C. §[§]
201 et

.§.Sill.

and New York Labor Law, and its governing regula-

6

tions"').

The settlement should more narrowly define what is

being released.

4

Accordingly, within 30 days of the date of this Order,
the parties are to submit either revised settlement agreements
that eliminate the foregoing issue or a memorandum of law explaining why the proposed settlement agreements should be approved in their present form.
Dated:

New York, New York
March 30, 2017
SO ORDERED

2/_
/~~
HENR~N
United States Magistrate Judge
Copies transmitted to:
All Counsel of Record

4

I recognize that I have approved prior settlements in this
matter with identical releases.
However, the case law has
evolved since those approvals.
"Wisdom too often never comes,
and so one ought not to reject it merely because it comes too
late." Henslee v. Union Planters Nat'l Bank & Tr. Co., 335 U.S.
595, 600 (1949) (Frankfurter, J., dissenting).
7