Mares et al v. Hattan Cleaners Inc. et al

Filing 46

OPINION AND ORDER OF DISMISSAL. Accordingly, I approve the settlement in this matter. In light of the settlement, the action is dismissed with prejudice and without costs provided that it may be reopened within 45 days of the date of this Order if the settlement documents are not executed and the first installment of the settlement amount ($16,666.67) is not paid by that date. The Clerk of the Court is requested to mark this matter closed. (As further set forth in this Order) (Signed by Magistrate Judge Henry B. Pitman on 7/25/2016) Copies Sent By Chambers. (lmb)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

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EDUARDO MARES, et al.,
Plaintiffs,
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15 Civ. 7197

(HBP)

OPINION AND
ORDER OF DISMISSAL

DAL CHON KIM, et al.,
Defendants.

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PITMAN, United States Magistrate Judge:

This matter is before me on the parties• joint application to approve the parties• settlement.

The application was

made orally at the conclusion of a settlement conference held on
July 11, 2016.

All parties have consented to my exercising

plenary jurisdiction pursuant to 28 U.S.C.

§

636(c).

This is an action brought by two plaintiffs who formerly worked at a dry-cleaning establishment for allegedly unpaid
wages and overtime and spread-of-hours pay brought under the Fair
Labor Standards Act ( 11 FLSA 11 ) , 29 U.S.C.
New York Labor Law.

§§

201 et

§.Sill.

and the

Plaintiffs also assert claims based on

defendants• alleged failure to maintain certain records as
required by New York State law.
Plaintiffs allege that they worked for defendants
pressing garments, preparing garments for delivery and delivering

garments.

Mares claims that he worked, on average, 47 hours per

week; Vargas claims that she worked, on average, 68 hours per
week.

Mares claims to be owe approximately $50,000 in unpaid

wages and overtime; Vargas claims to be owed approximately
$137,000 in unpaid wages and overtime.
Defendants vigorously dispute the plaintiffs' claimed
hours.

Defendants claim that Mares never worked more than 30

hours per week, was paid far more than the minimum wage and is
owed nothing.

Defendants claim that Vargas' claim for unpaid

overtime has some validity, but that she is owed no more than
$14,000.

Although defendants have some time records, there is no

dispute that the records are inaccurate.

In addition to contest-

ing the hours claimed by plaintiffs, defendants also allege that
their annual sales did not exceed $500,000 per year during
plaintiffs' employment and that they are not, therefore, subject
to the FLSA.
The parties have agreed to a total a settlement of
$100,000 to be paid in six equal installments over approximately
six months, an exchange of general releases and a confession of
judgment in favor of plaintiffs to guarantee the installment
payments.

27% of the settlement is allocated to Mares; the

balance is allocated to Vargas.

2

I held a lengthy settlement conference on July 11, 2016
that was attended by the principals and their counsel.

The

parties were able to agree on the terms outlined above at that
conference.
Court approval of an FLSA settlement is appropriate
"when [the settlement] [is] reached as a result of
contested litigation to resolve bona fide disputes."
Johnson v. Brennan, No. 10 Civ. 4712, 2011 WL 4357376,
at *12 (S.D.N.Y. Sept. 16, 2011).
"If the proposed
settlement reflects a reasonable compromise over contested issues, the court should approve the settlement." Id. (citing Lynn's Food Stores, Inc. v. United
States, 679 F.2d 1350, 1353 n. 8 (11th Cir. 1982)).
Agudelo v. E & D LLC, 12 Civ. 960 (HB), 2013 WL 1401887 at *1
(S.D.N.Y. Apr. 4, 2013)

(Baer, D.J.).

"Generally, there is a

strong presumption in favor of finding a settlement fair,

[be-

cause] the Court is generally not in as good a position as the
parties to determine the reasonableness of an FLSA settlement."
Lliguichuzhca v. Cinema 60, LLC, 948 F. Supp. 2d 362, 365
(S.D.N.Y. 2013)

(Gorenstein, M.J.)

citations omitted) .

(inner quotation marks and

"Typically, courts regard the adversarial

nature of a litigated FLSA case to be an adequate indicator of
the fairness of the settlement."
F.R.D. 467, 476 (S.D.N.Y. 2013)

Beckman v. Keybank, N.A., 293
(Ellis, M.J.), citing Lynn's Food

Stores, Inc. v. United States, 679 F.2d 1350, 1353-54 (11th Cir.
1982) .

The presumption of fairness in this case is bolstered by

3

he caliber the parties' counsel.

All parties are represented by

counsel who are known to me to be extremely knowledgeable regarding wage and hour matters and who are well suited to assess the
risks of litigation and the benefits of the proposed settlement.
The proposed settlement, before deduction of legal fees
and costs, provides each plaintiff with approximately 50% of
their claimed unpaid wages.

The defendants are no longer in

business, and their ability to pay a greater judgment or settlement is uncertain.

Given the general uncertainty of litigation,

the fact that plaintiffs' case, at least at this point, is based
entirely on plaintiffs' own testimony, defendants' time records
(which all parties admit are inaccurate) and the burden of proof
that plaintiff bears, the settlement represents a fair and
reasonable compromise of plaintiffs' claims. 1
Accordingly, I approve the settlement in this matter.
In light of the settlement, the action is dismissed with prejudice and without costs provided that it may be reopened within 45

1

I do not address the fee arrangement between plaintiffs and
their counsel because I do not believe I am required to do so
under Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199 (2d
Cir. 2015), cert. denied, 136 S. Ct. 824 (2016). As described in
Cheeks, the purpose of the FLSA is to regulate the relationship
between an employee and his employer and to protect the employee
from over-reaching by the employer.
796 F.3d at 206.
I do not
understand the FLSA to regulate the relationship between the
employee as plaintiff and his counsel or to alter the freedom of
contract between a client and his attorney.
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days of the date of this Order if the settlement documents are
not executed and the first installment of the settlement amount
($16,666.67) is not paid by that date.

The Clerk of the Court is

requested to mark this matter closed.
Dated:

New York, New York
July 25, 2016
SO ORDERED

HENRY P TMAN
United States Magistrate Judge
Copies transmitted to:
All Counsel

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