Checo et al v. Boston Post Road Food Corp. et al

Filing 46

ORDER: In light of the foregoing, the Court cannot approve the proposed settlement at this time. The parties are hereby ordered to meet and confer about the settlement, and to file a revised settlement submission or a joint letter updating the Court on the status of settlement negotiations no later than January 11, 2016. Any revised submission "should make clear any remaining points of legal and factual disagreement (including over wage and hour calculations), [ ] explain the calculations and facts underlying the proposed recovery amounts," and provide documentation for requested attorneys' fees. Gaspar, 2015 WL 7871036, at *3. (As further set forth in this Order) (Signed by Judge Alison J. Nathan on 12/15/2015) (kl)

USDCSDNY

OOClJMENT

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

ELECTRONICALLY ftU:U

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Andres Checo,
Plaintiff,

14-CV-4565 (AJN)

-vORDER
Boston Post Road Food Corp. et al.,
Defendants.

ALISON J. NATHAN, District Judge:
On June 24, 2014, Andres Checo ("Plaintiff') filed a complaint in the Southern District
of New York alleging violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et

seq., and the New York Labor Law ("NYLL"), Art. 19 §§ 190 and 650 et seq. See Dkt. No. 1.
Plaintiff claimed that his employer, a Bronx supermarket, failed to pay legally required
minimum, overtime, and spread-:-of-hours wages and failed to keep adequate records. Id. The
parties notified the Court that they had reached a settlement in principle on August 5, 2015. See
Dkt. No. 37. On November 19, 2015, the parties submitted a written settlement for the Court's
approval, along with a letter explaining their views on why the settlement would be fair. See
Dkt. No. 45. Under this settlement, Plaintiff would receive $33,333.33 and his attorneys would
receive $16,666.67. Id. at 2. Because the parties fail to provide the Court with sufficient
information to evaluate the fairness of this proposed settlement, approval is denied at this time.

I.

DISCUSSION
To promote FLSA's purpose of ensuring "a fair day's pay for a fair day's work," a

settlement in a FLSA case must be approved by a court or the Department of Labor. Cheeks v.

Freeport Pancake House, Inc., 796 F.3d 199, 206 (2d Cir. 2015) (quotingA.H Phillips, Inc. v.
Walling, 324 U.S. 490, 493 (1945)). As a result, Plaintiffs claims cannot be dismissed with

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prejudice until the Court is satisfied that the proposed settlement is "fair and reasonable." See,

e.g., Wolinsky v. Scholastic Inc., 900 F. Supp. 2d 332, 335 (S.D.N.Y. 2012). A "fair and
reasonable" settlement must "reflect[] a reasonable compromise of disputed issues rather than a
mere waiver of statutory rights brought about by an employer's overreaching." Mamani v.

Licetti, No. 13-CV-7002 (KMW), 2014 WL 2971050, at *1 (S.D.N.Y. July 2, 2014) (quoting Le
v. SITA Info. Networking Computing USA, Inc., No. 07-CV-86 (JS), 2008 WL 724155, at *1
(E.D.N.Y. Mar. 13, 2008)); see also Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350,
1354 (11th Cir. 1982).
For a court to properly evaluate the fairness of a proposed settlement, the parties must
provide sufficient information about "the bona fides of the dispute." Mamani, 2014 WL
2971050, at *1 (quoting Dees v. Hydradry, Inc., 706 F. Supp. 2d 1227, 1241 (M.D. Fla. 2010)).
At minimum, this includes information on "the nature of plaintiffs' claims, ... the litigation and
negotiation process, the employers' potential exposure both to plaintiffs and to any putative
class, the bases of estimates of plaintiffs' maximum possible recovery, the probability of
plaintiffs' success on the merits, and evidence supporting any requested fee award." Lopez v.

Nights of Cabiria, LLC, 96 F. Supp. 3d 170, 176 (S.D.N.Y. 2015). If the parties disagree over
the calculation of wages owed, they "must provide each party's estimate of the number of hours
worked and the applicable wage." Mamani, 2014 WL 2971050, at * 1 (quoting Dees, 706 F.
Supp. 2d at 1241-42). In reviewing attorney's fees, the Court looks to "the lodestar-the product
of a reasonable hourly rate and the reasonable number of hours required by the case-which
creates a presumptively reasonable fee." Zhang v. Lin Kumo Japanese Rest., Inc., No. 13-CV6667 (PAE), 2015 WL 5122530, at *2 (S.D.N.Y. Aug. 31, 2015) (quoting Stanczyk v. City of

New York, 752 F.3d 273, 284 (2d Cir. 2014)).
In light of these principles, the parties have failed to provide the Court with sufficient
information to evaluate the fairness of their proposed settlement. Most importantly, the parties
have failed to "provide each party's estimate of the number of hours worked and the applicable
wage." Mamani, 2014 WL 2971050, at *1 (quoting Dees, 706 F. Supp. 2d at 1241-42). Plaintiff
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alleges that he worked 12 hour days five days a week and a 14 hour day once a week, for a fixed
salary of $500 per week. Dkt. No. 45 at 2. While Defendants "dispute the hours the Plaintiff
claims he worked," they do not provide their own estimate, nor do they provide any information
on the applicable wages. Id. Without information on the "methodology for calculating the
[settlement] amount[]" and the "underlying data to which the methodology was applied," see

Gaspar v. Pers. Touch Moving, Inc., No. 13-CV-8187 (AJN), 2015 WL 7871036, at *2
(S.D.N.Y. Dec. 3, 2015), the Court cannot evaluate whether the proposed settlement "reflects a
reasonable compromise of disputed issues rather than a mere waiver of statutory rights brought
about by an employer's overreaching." Mamani, 2014 WL 2971050, at *1 (quoting Le, 2008
WL 724155, at *1).
Similarly, the parties do not provide any "documentation justifying the hours [] spent" by
the attorneys on the case. Gaspar, 2015 WL 7871036, at *2. Without such information, the
Court cannot determine whether the proposed fee is "the product of a reasonable hourly rate and
the reasonable number of hours required by the case." Zhang, 2015 WL 5122530, at *2 (quoting

Stanczyk, 752 F.3d at 284).
The Court also wishes to address the release in the proposed settlement. A FLSA
settlement cannot contain a release from liability that would "waive practically any possible
claim against the defendants, including unknown claims and claims that have no relationship
whatsoever to wage-and-hour issues." Cheeks, 796 F.3d at 206 (quoting Lopez, 96 F. Supp. 3d at
181 ). Despite this requirement, the proposed settlement provides: "Plaintiff ... release[ s] ...
Defendants from any and all claims of any kind whatsoever including, but not limited to, claims
in connection with his employment at Defendants, whether known or unknown, that he has, may
have or has had ... including, but not limited to, claims arising under [a list of federal, state, and
local statutes]." Dkt. No. 45 Ex. 1if3. Such a broad release requires Plaintiff to waive his right
to bring "claims that have no relationship whatsoever to wage-and-hour issues," and is thus
impermissible. Cheeks, 796 F.3d at 206 (quoting Lopez, 96 F. Supp. 3d at 181).

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II.

CONCLUSION
In light of the foregoing, the Court cannot approve the proposed settlement at this time.

The parties are hereby ordered to meet and confer about the settlement, and to file a revised
settlement submission or a joint letter updating the Court on the status of settlement negotiations
no later than January 11, 2016. Any revised submission "should make clear any remaining
points oflegal and factual disagreement (including over wage and hour calculations), [] explain
the calculations and facts underlying the proposed recovery amounts," and provide
documentation for requested attorneys' fees. Gaspar, 2015 WL 7871036, at *3.

SO ORDERED.

\t

Dated: December
, 2015
New York, New York

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