Enriquez et al v. Room Service II, Inc. et al
Filing
55
MEMORANDUM OPINION & ORDER: #101444 The parties January 16, 2012 Agreement is approved, and this action is dismissed with prejudice as to the named Plaintiffs and without prejudice as to the other members of the alleged putative collective and class actions. (Signed by Judge Denise L. Cote on 2/16/2012) (mro) Modified on 2/17/2012 (jab).
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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:
VICTORIANO ENRIQUEZ, JUAN MARTINEZ,
:
FELICIANO GENIS, ERIC VELASCO, ELIAS
:
ROSALES, FRANCISCO FLORES MARTINEZ,
:
NARIN MESOMMONTA, RATTANAPORN
:
THANAPATH, EDGAR MARTINEZ, and BULMARO :
CRUZ TORRES, individually and on
:
behalf of others similarly situated,
:
:
Plaintiffs,
:
:
-v:
:
ROOM SERVICE II, INC. (d/b/a ROOM
:
SERVICE), ROOM SERVICE, INC., (d/b/a
:
KLONG), JOHN DOE CORP. (d/b/a ROOM
:
SERVICE), CHAI HUADWTTANA, ACE
:
WATANASUPARP, BOBIT DOE, YANG YONG,
:
and CHAT CHA,
:
Defendants.
:
:
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11 Civ. 2410 (DLC)
MEMORANDUM
OPINION & ORDER
DENISE COTE, District Judge:
On January 16, 2012, the parties in this putative
collective action brought under the Fair Labor Standards Act
(“FLSA”) executed a settlement agreement (“Agreement”) that
provided for a payment that was less than the full sum of
liquidated damages mandated by the FLSA.
§ 216(b).
See 29 U.S.C.
An Order of January 27 advised the parties that the
terms of the Agreement would have to be subjected to judicial
review before this case could be dismissed.
On February 10, the
plaintiffs Victoriano Enriquez, Juan Martinez, Feliciano Genis,
Eric Velasco, Elias Rosales, Francisco Flores Martinez, Narin
Mesommonta, Rattanaporn Thanapath, Edgar Martinez, and Bulmaro
Cruz Torres, in addition to the other plaintiffs who opted in
this action (the “Plaintiffs”), submitted a letter jointly with
the defendants in response to the January 27 Order.
For the
following reasons, the Agreement is approved, and the lawsuit is
dismissed.
BACKGROUND
The Plaintiffs commenced this action on April 8, 2010,
alleging that their employers -- the defendants Room Service II
Inc. (d/b/a Room Service), Room Service, Inc. (d/b/a Klong),
Nahm Inc. (d/b/a Room Service), Chai Huadwattana, Ace
Watanasuparp, Bobit Doe, Yang Yong, and Chat (the “Defendants”)
-- violated the FLSA and New York State labor laws.
In the
Complaint, the Plaintiffs requested that the lawsuit be
designated as a collective action under the FLSA and that a
class be certified for the related state law claims.
The Plaintiffs were employed to perform various restaurant
duties such as making deliveries, cooking, waiting tables,
preparing food, and washing dishes for the Defendants.
During
their employment, the Plaintiffs were paid a flat weekly wage
for their hours worked instead of the statutory minimum wage or
overtime rate.
The Plaintiffs claim that if they recovered in
full for their claims, they would be entitled to roughly
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$1,300,218.
The Defendants claim that the figure is closer to
$300,000 to $400,000.
The parties have agreed to settle the action for $725,000,
to be paid in installments with the final payment to be made on
or before July 15, 2014.
If the Agreement is approved, the
parties request that the action be dismissed with prejudice as
to the named Plaintiffs and without prejudice as to members of
the alleged putative collective and class actions.
DISCUSSION
The FLSA imposes the obligation to pay unpaid overtime
compensation and “an additional equal amount as liquidated
damages” on employers who violate its requirement that overtime
wages be paid.
29 U.S.C. § 216(b).
The obligation to pay
“liquidated damages cannot be bargained away by bona fide
settlements of disputes over coverage.”
Gangi, 328 U.S. 108, 114 (1946).
D.A. Schulte, Inc. v.
In D.A. Schulte, however, the
Supreme Court suggested in dicta that employees may waive FLSA
claims pursuant to judicially-supervised settlements.
113 n.8.
Id. at
The Supreme Court reasoned that “by the simple device
of filing suits and entering agreed judgments, . . . the
requirement of pleading the issues and submitting the judgment
to judicial scrutiny may differentiate stipulated judgments from
compromises by the parties.”
Id.
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Based on D.A. Schulte’s
dicta, several circuits have opined that courts may enter
judgments on a basis that does not require full payment of
liquidated damages after scrutinizing the proposed settlements
for fairness.
See, e.g., Lynn’s Food Stores, Inc. v. United
States By and Through U.S. Dep’t of Labor, Employment Standards
Admin., Wage and Hour Div., 679 F.2d 1350, 1352-53 (11th Cir.
1982); Urbino v. Puerto Rico Ry. Light & Power Co., 164 F.2d 12,
14 (1st Cir. 1947).
In Jarrard v. Southeastern Shipbuilding
Corp., 163 F.2d 960 (5th Cir. 1947), the Fifth Circuit approved
a settlement after finding that “a bona fide dispute of both law
and fact was involved in the litigation, and that the proposed
settlement agreed upon was fair and equitable to all parties
concerned.”
Id. at 961.
The Plaintiffs in this case have sufficiently supported
their Agreement and demonstrated that it represents a fair and
equitable settlement of their bona fide dispute with their
employer.
The settlement amount in this case is less than the
full amount of the Plaintiffs’ claims -- significantly so when
attorneys’ fees and costs are considered.
Under the
circumstances, however, this amount is reasonable and fair.
First, the Plaintiffs admit that they face risks of not
prevailing on some or all of their claims if the case were to
proceed to trial.
The parties have not suggested that documents
exist to establish the actual number of hours worked by each of
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the plaintiffs.
In addition, the $725,000 settlement exceeds
the amount of actual unpaid compensation that the Plaintiffs
allege they are owed, which is $641,481.
The settlement
therefore covers an amount of the liquidated damages provided
under the FLSA.
The prohibition on waiver of FLSA claims except pursuant to
a settlement supervised by the Secretary of Labor or an
agreement that is judicially approved is meant to protect
employees from inequality in bargaining powers.
Schulte, 328 U.S. at 115.
See D.A.
The Plaintiffs, though, have been
represented by counsel throughout this lawsuit.
These
circumstances provide further assurance that the Plaintiffs’
interests have been safeguarded.
CONCLUSION
The parties’ January 16, 2012 Agreement is approved, and
this action is dismissed with prejudice as to the named
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Plaintiffs and without prejudice as to the other members of the
alleged putative collective and class actions.
SO ORDERED:
Dated:
New York New York
February 16 2012
l
1
D ISE COTE
United States District Judge
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