Yunda v. SAFI-G, Inc. et al
Filing
27
OPINION AND ORDER: I approve the settlement in this matter. In light of the settlement, the action is dismissed with prejudice and without costs. The Clerk of the Court is respectfully requested to mark this matter closed. (Signed by Magistrate Judge Henry B. Pitman on 4/28/2017) Copies Mailed By Chambers. (ras)
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USDCSDNY
DOCUMENT
ELECTRONICALLY FILED
DOC#: ______,~:--DATB FILED: '1U1ltz -...:
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-----------------------------------x
-
ALVARO YUNDA, on behalf of
himself and all others
similarly situated,
15 Civ. 8861
(HBP)
Plaintiff,
OPINION
AND ORDER
-againstSAFI-G, INC., d/b/a
CAFFE BUON GUSTO, et al.,
Defendants.
-----------------------------------x
PITMAN, United States Magistrate Judge:
I.
Introduction
This matter is before me on the parties'
tion to approve the parties' settlement.
joint applica-
All parties have
consented to my exercising plenary jurisdiction pursuant to 28
U.S.C. § 636(c).
II.
Facts
Plaintiff formerly worked for SAFI-G,
Inc. and seeks,
by this action, to recover allegedly unpaid wages, overtime
premium pay and spread-of-hours pay.
the Fair Labor Standards Act
~.,
The action is brought under
(the "FLSA"), 29 U.S.C. §§ 201 et
and the New York Labor Law (the "NYLL").
Plaintiff also
asserts claims based on defendants' alleged failure to provide
certain notices as required by the Labor Law.
Although the
action was commenced as a collective action with respect to the
FLSA claims and a putative class action with respect to the Labor
Law claims, the parties reached the proposed settlement prior to
the matter being conditionally certified as a collective action
or certified as a class action.
Thus, the only parties to the
settlement are the named plaintiff and the named defendants.
Plaintiff alleges that he was employed as a busboy,
"food runner" 1 and waiter from August 26, 2004 through July 8,
Plaintiff claims that during this period, he worked
2013.
approximately 57 hours every other week.
Plaintiff alleges he
was paid a flat fee of $20.00 for lunch shifts
(which lasted five
hours) and $10.00 for dinner shifts (which lasted eight hours).
Plaintiff claims he is owed $11,233.44 in unpaid minimum wage and
overtime and $11,233.44 in liquidated damages under the FLSA.
Defendants deny plaintiff's allegations.
They dispute
the number of hours that plaintiff claims to have worked.
They
also claim that plaintiff was paid for all hours that he worked
and was paid a premium for overtime work.
1
Defendants claim that
A "food runner" helps waiters deliver orders from the
kitchen to the customers (Class/Collective Action Complaint and
Jury Demand, dated Nov. 10, 2015 (D.I. 1) ~ 31).
2
plaintiff was paid an additional $225.00 per week, as evidenced
by the W-2 forms issued to plaintiff.
I held a lengthy settlement conference on October 5,
2016 that was attended by the parties and their counsel.
There
was a protracted discussion of the strengths and weaknesses of
the parties' respective positions.
At the conference, defendants
offered to resolve the dispute, and plaintiff accepted the offer
the following day.
The parties have submitted two separate settlement
agreements.
One settlement agreement resolves plaintiff's FLSA
claim and requires approval under Cheeks v. Freeport Pancake
House,
Ct. 824
Inc., 796 F.3d 199 (2d Cir. 2015), cert. denied, 136 S.
(2016).
In that agreement, plaintiff agrees to settle
his FLSA claim for a total amount of $27,500.00.
The agreement
also provides that plaintiff's counsel will receive one-third of
the total settlement amount, or $9,165.00, as attorneys'
fees and
costs and that the balance of $18,335.00 will be paid to plaintiff.
The second settlement agreement resolves plaintiff's NYLL
claims, does not require approval under Cheeks and contains a
confidentiality clause, among other provisions.
3
III.
Analysis
A.
Bifurcated
Settlement Agreement
A preliminary issue is whether the parties' bifurcated
settlement structure is permissible.
Clearly, the purpose of
such a structure is to avoid some of the limitations that Cheeks
and its progeny have imposed on settlements of FLSA claims.
The
NYLL settlement agreement contains several provisions that would
be impermissible in an FLSA settlement.
Recognizing that issue,
the parties have instead included these provisions in their NYLL
settlement agreement to immunize them from judicial review.
I conclude that such a bifurcated settlement agreement
is permissible.
Cheeks held that FLSA settlement agreements must
be approved either by a Court or the Department of Labor before
an action can be dismissed with prejudice pursuant to Fed.R.Civ.P. 41 (a) (1) (A) (ii).
Cheeks v. Freeport Pancake House,
supra, 796 F.3d at 200.
Inc.,
In other words, Cheeks is silent on the
issue presented here, namely, whether the limitations applicable
to a settlement of an FLSA claim apply to the settlement of a
parallel NYLL claim.
Because the settlement of the FLSA claim is
subject to the same review that is applicable in cases where
there is a single settlement agreement,
4
I conclude that the
mechanism proposed by the parties does not run afoul of Cheeks.
The fact that there may be provisions in the NYLL settlement
agreement that could not be included in the FLSA settlement is
immaterial because the NYLL settlement agreement does not require
judicial approval.
See Abrar v. 7-Eleven, Inc., No. 14-cv-6315
(ADS) (AKT), 2016 WL 1465360 at *1
(approving such a structure).
(E.D.N.Y. Apr. 14, 2016)
Therefore,
I shall examine whether
the parties' FLSA settlement agreement is fair and reasonable,
and I shall not examine the NYLL settlement.
B.
Approval of
the FLSA Settlement
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.)
(alterations in original)
"Generally, there is a strong presumption in favor of finding a
settlement fair,
[because] 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,
5
948 F. Supp.
2d 362, 365 (S.D.N.Y. 2013)
tion marks omitted).
(Gorenstein, M.J.)
(internal quota-
"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, supra,
679 F.2d at 1353-54.
The
presumption of fairness in this case is bolstered by the caliber
of the parties' attorneys.
Based upon their pre-conference
submissions and their performance at the settlement conference,
it is clear to me that all parties are represented by counsel who
are extremely knowledgeable regarding all issues in the case and
who are well suited to assess the risks of litigation and the
benefits of the proposed settlement.
In Wolinsky v. Scholastic Inc.,
335
900 F. Supp. 2d 332,
(S.D.N.Y. 2012), the Honorable Jesse M. Furman, United States
District Judge, identified five factors that are relevant to an
assessment of the fairness of an FLSA settlement:
In determining whether [a] proposed [FLSA] settlement is fair and reasonable, a court should consider
the totality of circumstances, including but not limited to the following factors:
(1) the plaintiff's
range of possible recovery; (2) the extent to which the
settlement will enable the parties to avoid anticipated
burdens and expenses in establishing their respective
claims and defenses; (3) the seriousness of the litigation risks faced by the parties; ( 4) whether the settlement agreement is the product of arm's-length bar-
6
gaining between experienced counsel; and (5) the possibility of fraud or collusion.
(Internal quotation marks omitted).
The settlement here satis-
fies these criteria.
First, after deduction of attorneys' fees and costs,
the net settlement represents approximately 81.6% of plaintiff's
total FLSA damages,
i.~.
actual and liquidated damages.
Thus,
the net settlement amount provides plaintiff with a substantial
percentage of his claimed damages.
Second, the settlement will entirely avoid the burden,
expense and aggravation of litigation.
Defendants dispute the
number of hours plaintiff worked and claim that he took breaks
during the day.
Trial preparation would potentially require
additional depositions to explore this issue.
The settlement
avoids the necessity of conducting these depositions.
Third, the settlement will enable plaintiff to avoid
the risk of litigation.
Plaintiff was paid by check, and defen-
dants claim these checks included $225.00 in addition to his
shift pay.
Moreover, there are disputes about the number of
hours plaintiff worked.
It is uncertain whether, or how much,
plaintiff would recover at trial.
See Bodon v. Domino's Pizza,
LLC, No. 09-CV-2941 (SLT), 2015 WL 588656 at *6 (E.D.N.Y. Jan.
16, 2015)
(Report
&
Recommendation)
7
(" [T]he question [in assess-
ing the fairness of a class action settlement] is not whether the
. but
settlement represents the highest recovery possible .
whether it represents a reasonable one in light of the many
uncertainties the class faces .
"
(internal quotation marks
omitted)), adopted sub nom . .Qy, Bodon v. Domino's Pizza, Inc.,
2015 WL 588680 (E.D.N.Y. Feb. 11, 2015); Massiah v. MetroPlus
Health Plan, Inc., No. ll-cv-05669 (BMC), 2012 WL 5874655 at *5
(E.D.N.Y. Nov. 20, 2012)
("[W]hen a settlement assures immediate
payment of substantial amounts to class members, even if it means
sacrificing speculative payment of a hypothetically larger amount
years down the road, settlement is reasonable .
"
(internal
quotation marks omitted; assessing fairness of class action
settlement)).
Fourth, because I presided over the settlement conference that immediately preceded plaintiff's acceptance of the
settlement, I know that the settlement is the product of arm'slength bargaining between experienced counsel.
Both counsel
represented their clients zealously at the settlement conference.
Fifth, there are no factors here that suggest the
existence of fraud.
The settlement was reached shortly after a
mediation before the Court.
This fact further negates the
possibility of fraud or collusion.
8
The settlement agreement also contains a release.
It
provides that plaintiff releases defendants from "any and all
claims, whether known or unknown, asserted or unasserted, arising
up to and as of the date of the execution of this Agreement under
the FLSA"
(Settlement Agreement
':IT
I (A) ) .
Such a release, al-
though unlimited in duration, is permissible because it is
limited to claims arising under the FLSA.
See,
~.g,
Santos v.
Yellowstone Props., Inc., 15 Civ. 3986 (PAE), 2016 WL 2757427 at
*l, *3
(S.D.N.Y. May 10, 2016)
(Engelmayer, D.J.)
(approving
release that included both known and unknown claims and was
limited to wage and hour claims); Hyun v. Ippudo USA Holdings, 14
Civ. 8706 (AJN), 2016 WL 1222347 at *3-*4
2016)
(Nathan, D.J.)
(S.D.N.Y. Mar. 24,
(approving release that included both known
and unknown claims and claims through the date of the settlement
that was limited to wage and hour issues; rejecting other release
that included both known and unknown claims and claims through
the date of the settlement that was not limited to wage and hour
issues); Alvarez v. Michael Anthony George Constr. Corp., No. 11
CV 1012 (DRH) (AKT), 2015 WL 10353124 at *l (E.O.N.Y. Aug. 27,
2015)
(rejecting release of all claims "whether known or unknown,
arising up to and as of the date of the execution of this Agreement" because it included "the release of claims unrelated to
wage and hour issues"
(internal quotation marks omitted)) .
9
In addition, the settlement agreement contains a waiver
that provides that plaintiff "waives any right or ability to be a
class or collective action representative or to otherwise participate in any putative or certified class, collective or multiparty action or proceeding against any Releasee under the FLSA"
(Settlement
Agreement~
I(B)).
Importantly, plaintiff did not
waive his right to assist, aid, encourage, facilitate or cooperate in such a proceeding against defendants, and he did not waive
his right to participate in all proceedings against defendants,
no matter the claim; such broad clauses would have been impermissible.
See Zapata v. Bedoya, No. 14-CV-4114
4991594 at *2
15 Civ. 647
(SIL), 2016 WL
(E.D.N.Y. Sept. 13, 2016); Lopez v. Ploy Dee, Inc.,
(AJN), 2016 WL 1626631 at *3 (S.D.N.Y. Apr. 21, 2016)
(Nathan, D.J.); Alvarez v. Michael Anthony George Constr. Corp.,
supra, 2015 WL 3646663 at *1; Lopez v. Nights of Cabiria, LLC,
F. Supp. 3d 170, 178
(S.D.N.Y. 2015)
(Kaplan, D.J.).
96
Because the
waiver is limited to participation in a proceeding against
defendants that arises under the FLSA and really adds nothing to
the limited release, it is permissible.
Finally, the settlement agreement provides that onethird of the settlement fund will be paid to plaintiff's counsel
as a contingency fee and costs.
Contingency fees of one-third in
FLSA cases are routinely approved in this Circuit.
10
Santos v. EL
Tepeyac Butcher Shop Inc., 15 Civ. 814
*3 (S.D.N.Y. Dec. 15, 2015)
(RA), 2015 WL 9077172 at
(Abrams, D.J.)
("[C]ourts in this
District have declined to award more than one third of the net
settlement amount as attorney's fees except in extraordinary
circumstances.''), citing Zhang v. Lin Kumo Japanese Rest. Inc.,
13 Civ. 6667
2015)
(PAE), 2015 WL 5122530 at *4
(S.D.N.Y. Aug. 31,
(Engelmayer, D. J.) and Thornhill v. CVS Pharm., Inc., 13
Civ. 507
(JMF), 2014 WL 1100135 at *3 (S.D.N.Y. Mar. 20, 2014)
(Furman, D.J.); Rangel v. 639 Grand St. Meat & Produce Corp., No.
13 CV 3234 (LB), 2013 WL 5308277 at *1 (E.D.N.Y. Sept. 19, 2013)
(approving attorneys' fees of one-third of FLSA settlement
amount, plus costs, pursuant to plaintiff's retainer agreement,
and noting that such a fee arrangement "is routinely approved by
courts in this Circuit"); Febus v. Guardian First Funding Grp.,
LLC, 870 F. Supp. 2d 337, 340 (S.D.N.Y. 2012)
(Stein, D.J.)
("[A]
fee that is one-third of the fund is typical" in FLSA cases);
accord Calle v. Elite Specialty Coatings Plus, Inc., No.
13-CV-6126 (NGG) (VMS), 2014 WL 6621081 at *3 (E.D.N.Y. Nov. 21,
2014); Palacio v. E*TRADE Fin. Corp., 10 Civ. 4030
2012 WL 2384419 at *6-*7
(S.D.N.Y. June 22, 2012)
M.J.).
11
(LAP) (DCF),
(Freeman,
IV.
Conclusion
Accordingly, for all the foregoing reasons,
the settlement in this matter. 2
I approve
In light of the settlement, the
action is dismissed with prejudice and without costs.
The Clerk
of the Court is respectfully requested to mark this matter
closed.
Dated:
New York, New York
April 28, 2017
SJ
ORDERED
HENR~N
/
~
United States Magistrate Judge
Copies transmitted to:
All Counsel of Record
2
I note that the parties have failed to file their FLSA
settlement agreement on the public docket.
A court-approved FLSA
settlement cannot be confidential absent a substantial showing
that the need for confidentiality outweighs the presumption of
public access.
See Geskina v. Admore Air Conditioning Corp., 16
Civ. 3096 (HBP), 2017 WL 1162910 at *2 (S.D.N.Y. Mar. 28, 2017)
(Pitman, M.J.); Reynoso v. Norman's Cay Grp. LLC, 15 Civ. 1352
(PAE), 2015 WL 10098595 at *l (S.D.N.Y. Nov. 23, 2015)
(Engelmayer, D.J.) (" [T]he Court will not permit the filing of a
court-approved FLSA settlement under seal." (footnote omitted)),
citing Wolinsky v. Scholastic Inc., supra, 900 F. Supp. 2d at
340; Lopez v. Nights of Cabiria, LLC, supra, 96 F. Supp. 3d at
177 (confidentiality provisions of proposed settlement agreement
were in "strong tension with the remedial purposes of the FLSA").
Accordingly, the parties' FLSA settlement agreement will be filed
with this Order; however, because the parties' NYLL agreement is
confidential and is not subject to judicial review, it shall not
be filed on the public docket.
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