Fu et al v. Mee May Corp. et al
OPINION AND ORDER: The parties reached their proposed settlement prior to the settlement conference that I had scheduled in this matter, and therefore, my knowledge of the underlying facts and the justification for the settlement is limited to counse ls' representations in the letters submitted in support of the settlement. (As further set forth in this Order.) Accordingly, within 30 days of the date of this Order, the parties are to provide the information sought and a revised settlement agreement that eliminates the foregoing issues. (Signed by Magistrate Judge Henry B. Pitman on 3/31/2017) Copies Sent By Chambers. (cf)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
DATE FILED: 3
BAO CHENG FU, GUANG LI ZHANG
and ZHONG QI LIN,
15 Civ. 4549 (HBP)
-againstMEE MAY CORP., JIANG QING CHEN,
KUANG CHI WU, JANE DOE #1-10,
JOHN DOE #1-10 and JOHN WU,
PITMAN, United States Magistrate Judge:
This matter is before me on the parties'
tion to approve the parties' settlement
(Docket Item ("D.I.")
All parties have consented to my exercising plenary juris-
diction pursuant to 28 U.S.C. § 636(c).
This is an action brought by three individuals who
formerly made deliveries at a small Chinese restaurant in
Manhattan and seeks allegedly unpaid wages,
and spread-of-hours pay.
Labor Standards Act
overtime premium pay
The action is brought under the Fair
(the "FLSA"), 29 U.S.C. §§ 201
the New York Labor Law.
Plaintiffs also assert claims based on
defendants' alleged failure to maintain certain payroll records,
to provide certain notices as required by the Labor Law and to
reimburse plaintiffs for the cost of bicycles that plaintiffs
used to make deliveries.
The parties reached their proposed settlement prior to
the settlement conference that I had scheduled in this matter,
and therefore, my knowledge of the underlying facts and the
justification for the settlement is limited to counsels' representations in the letters submitted in support of the settlement.
Plaintiffs advise that when they were employed by defendants,
they received a fixed weekly wage, regardless of the hours they
They further claim that this fixed weekly wage
was less than the minimum wage and overtime premium required by
Defendants claim that they maintained wage and hour docu-
ments, including time cards and pay records.
claim that they provided plaintiffs with proper notice of the tip
credit and were, therefore, entitled to pay a reduced hourly
Finally, defendants also claim that plaintiffs' allega-
tions concerning the number of hours they worked are inflated.
The parties have agreed to a total settlement of
The parties have also agreed that $3,000.00 of the
settlement figure will be allocated to reimburse plaintiffs'
counsel for their out-of-pocket costs, $7,000
(or one-third) of
the remaining $21,000.00 will be paid to plaintiffs' counsel as
fees and the remaining $14,000.00 will be divided among plain. 2
The amounts claimed by each of the plaintiffs 1 and the
net amount that will be received by each plaintiff after deduction for legal fees and costs are as follows:
Bao Cheng Fu
Guang Li Zhang
Zhong Qi Lin
I previously refused to approve the settlement agreement because the parties did not provide sufficient information
to enable me to determine whether the proposed settlement was
fair and reasonable (D.I. 60).
Specifically, the parties failed
to state the damages claimed by each plaintiff, and the basis for
each claimed amount, and an explanation of the allocation of the
The parties have submitted a renewed application for
settlement approval (Letter from Jian Hang, Esq., to the undersigned, dated Dec. 22, 2016 (D.I. 61)
accordance with my previous Opinion and Order, counsel has
The amounts claimed are the allegedly unpaid wages,
exclusive of liquidated damages and exclusive of damages for the
Labor Law notice claims.
Specifically, I expressed a concern about Fu's share of the
settlement amount, especially as compared to Lin's share.
provided each plaintiff's amount of allegedly unpaid wages, dates
worked and weekly pay (and the fact that it was in cash), the
number of hours Fu worked each week and an explanation for the
allocation of the settlement amount.
review of the proposed settlement,
However, upon further
several significant problems
again the parties have not provided me suffi-
cient information to allow me to determine whether the proposed
settlement is fair and reasonable.
Counsel failed to provide the
number of hours Lin claims to have worked each week.
have no way to assess the basis for his claim for unpaid wages.
Second, the allocation of the settlement proceeds is
As an explanation for the allocation,
states that Lin and Zhang settled their claims privately, without
the involvement of counsel.
Fu will also be
receiving $6,256.00 as part of a settlement with defendant Chen
in a different FLSA action with nearly identical allegations, Mao
v. Mee Chi Corp., 15 Civ. 1799
claims that there are issues with respect to defendants'
Although counsel also failed to provide the number of hours
Zhang worked each week, this information can be found in the
amended complaint (First Amended Collective and Class Action
Complaint and Jury Trial Demand, dated Aug. 7, 2015 (D.I. 11) ~
The number of hours Lin worked does not appear in the
ity and ability to pay a larger amount (Hang Letter, at 2).
However, a settlement in a different matter involving a different
employer has no bearing on the settlement here.
If an individual
has two employers, both of whom failed to pay the minimum wage, a
generous settlement from one employer cannot justify a meager
settlement from the other.
Moreover, even if the two settlements
are combined, Fu's total recovery would be $8,756.00, or 45% of
Zhang, on the othe1 hand, is receiving approximately
Although I recognize that Zhang
83% of his claimed unpaid wages.
is receiving $8,000.00 only because of private negotiations and
that there may be issues with defendants' liquidity, this unjustified, disparate allocation to Fu is not acceptable under Cheeks
v. Freeport Pancake House, Inc., 796 F.3d 199 (2d Cir. 2015),
cert. denied, 136 S. Ct. 824
Third, the settlement agreement contains a provision
prohibiting plaintiffs from cooperating in any action or proceeding against defendants.
Specifically, it provides that plain-
shall not, in any way, voluntarily assist any individual or entity in commencing or prosecuting any action
or proceeding against Defendants .
. or in any way
voluntarily participate or cooperate in any such action
This prohibition applies to every stage
of any action or proceeding, including any trial,
hearing, pretrial or prehearing preparation, pre-litigation investigation or fact gathering, administrative
agency procedure or arbitral procedure, and bars Plain5
tiffs from voluntarily testifying, providing documents
or information, advising, counseling or providing any
other form of voluntary assistance to any person or
entity who wishes to make or is making any claim against Defendants.
(Letter from Marisol Santos, Esq., to the undersigned, dated July
20, 2016 (D.
("Santos Letter"), Ex. 1
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