Douglas et al v. Spartan Demolition Company LLC et al

Filing 57

OPINION AND ORDER re: 56 MOTION to Approve FLSA Settlement Agreement , filed by A.J.S. Project Management, Inc., AJS Construction & Renovation Inc.The application of plaintiffs, AJS and C&R for approval of their proposed settlemen t agreement is denied without prejudice to renewal. Any renewed application for approval of the settlement should explain the rationale for the allocation of the proceeds among the plaintiffs and should eliminate the "no-assistance" provision discussed in the preceding paragraph, and as further set forth. (Signed by Magistrate Judge Henry B. Pitman on 7/7/2017) Copies transmitted by Chambers. (ras)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

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SHREAL DOUGLAS, individually and
on behalf of all other persons
similarly situated, et al.,

15 Civ. 5126 (HBP)
OPINION
AND ORDER

Plaintiffs,
-againstSPARTAN DEMOLITION COMPANY LLC,
et al.,
Defendants.

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PITMAN, United States Magistrate Judge:

This matter is before me on the joint application of
plaintiffs and defendants A.J.S. Management, Inc.
Construction & Renovation Inc.

("AJS") and AJS

("C&R") to approve their proposed

settlement (Letter from Austin Graff, Esq., to the undersigned,
dated June 20, 2017 (Docket Item ("D.I. ") 56).

Plaintiffs, AJS

and C&R have consented to my exercising plenary jurisdiction
pursuant to 28 U.S.C.

§

636(c).

The remaining defendants have

failed to answer or move with respect to the complaint and are in
default.
Plaintiffs commenced this action under the Fair Labor
Standards Act, 29 U.S.C.

§§

201 et seq., and the New York Labor

Law alleging that they did not receive the minimum wage, overtime

premium pay and the prevailing wage for demolition work that they
performed at a site located on the campus of Queens College.

The

plaintiffs were directly employed by Spartan Demolition Company
LLC.

They have asserted claims against AJS and C&R as the prime

contractors and allege that AJS and C&R are liable as joint
employers.

Plaintiffs also allege that they have standing to

assert claims as third-party beneficiaries of the contract
between AJS and New York City.

The amounts claimed by the

plaintiffs, exclusive of liquidated damages, interest and attorney's fees, are as follows:

Plaintiff

Amount
Claimed

Douglas

$8,380.64

Bautista

$8,380.64

Smith

$8,380.64

Dupree

$6,285.48

Jones

$4,190.32
I held a lengthy settlement conference with the parties

and counsel on May 17, 2017.

Although the matter did not settle

at that time, the parties advised me that they were subsequently
able to reach a settlement.

The proposed settlement requires AJS

and C&R to pay a total of $24,000.00.

$2,324.90 of this sum is

allocated to reimburse plaintiffs' counsel for out-of-pocket

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costs.

Of the remainder, one-third, or $7,225.10, is allocated

to plaintiffs' counsel as a fee.

The proposed settlement calls

for the balance of $14,450.00 to be distributed among the plaintiffs as follows:

Plaintiff

Amount of Settlement
Proceeds to be Received

Douglas

$4,450.00

Bautista

$3,500.00

Smith

$2,000.00

Dupree

$3,000.00

Jones

$1,500.00
I cannot approve the settlement as it is currently

constituted.

First, there is no apparent rationale for the

allocation of the proceeds among the plaintiffs.

Each plain-

tiff's pro rata share of the total amount of the claims asserted
and his pro rata share of the proposed settlement is as follows:

Plaintiff

Pro Rata Share of
the Claims
Asserted

Pro Rata Share of
the Proposed Settlement

Douglas

23.53%

30.80%

Bautista

23.53%

24.22%

Smith

23.53%

13.84%

Dupree

17.65%

20.76

Jones

11.76%

10.38%

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The papers currently before me of fer no explanation for the
disparity between each plaintiff's pro rata share of the claims
and the amount each will receive in the settlement nor do the
documents before me explain why plaintiffs Douglas, Bautista and
Smith, who all have claims for the same amount, are each receiving widely differing amounts.

There may be a valid reason for

the disproportionate distribution, but given my obligation under
Cheeks v. Freeport Pancake House, 796 F.3d 199 (2d Cir. 2015),
cert. denied, 136 S.Ct. 824
fairness,

(2016), to review the settlement for

I cannot approve such an unexplained disparate alloca-

tion.
Second, Second, the settlement agreement contains a
provision prohibiting plaintiffs from assisting in a lawsuit or
proceeding against defendants.

Specifically, the proposed

settlement agreement "bars the Plaintiffs from voluntarily
testifying, providing documents or information, advising, counseling or knowingly providing any other form of voluntary assistance to any person or entity who wishes to make or who is making
any claim against the AJS Defendants."

Such a provision in an

FLSA settlement is contrary to the remedial purposes of the
statute.

See Zapata v. Bedoya, No. 14-CV-4114 (SIL), 2016 WL

4991594 at *2 (E.D.N.Y. Sept. 13, 2016); Lopez v. Ploy Dee, Inc.,
15 Civ. 647 (AJN), 2016 WL 1626631 at *3 (S.D.N.Y. Apr. 21, 2016)
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(Nathan, D.J.); Alvarez v. Michael Anthony George Constr. Corp.,
No. 11 CV 1012 (DRH) (AKT), 2015 WL 3646663 at *l (E.D.N.Y. June
10, 2015); Lopez v. Nights of Cabiria, LLC, 96 F. Supp. 3d 170,
1 7 8 ( S . D . N . Y . 2 O15 )

(Kap 1 an, D . J . ) .

Accordingly, the application of plaintiffs, AJS and C&R
for approval of their proposed settlement agreement is denied
without prejudice to renewal.

Any renewed application for

approval of the settlement should explain the rationale for the
allocation of the proceeds among the plaintiffs and should
eliminate the "no-assistance" provision discussed in the preceding paragraph.
Dated:

New York, New York
July 7, 2017
SO ORDERED

United States Magistrate Judge
Copies transmitted to:
All Counsel of Record

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