Siddiky et al v. Union Square Hospitality Group, LLC et al

Filing 62

MEMORANDUM AND ORDER granting 50 Motion for Settlement; granting 52 Motion for Attorney Fees. For the reasons discussed above, plaintiffs' motion for settlement approval (Docket no. 50) is granted, and their applications for enhancement p ayments of $7,000.00 for Mr. Siddiky; $6,000.00 each for Mr. Maruf and Mr. Tahir; and $1,000.00 each for Mr. Gomez, Mr. Rosario, Mr. Welch, and Ms. Arnold are granted. Plaintiff's motion for approval of attorneys' fees and e xpenses to class counsel (Docket no. 52) is granted to the extent that fees of $173,750.00 and expenses of $2,143.45 are approved. The Clerk of Court is respectfully directed to close this action. SO ORDERED. (Signed by Magistrate Judge James C. Francis on 5/17/2017) Copies Transmitted this Date By Chambers. (anc) Modified on 5/17/2017 (anc).

FLSA and unlawful retention of employee gratuities in violation of
NYLL

§

196-d.

(Complaint

(“Compl.”),

¶¶

2-3,

17-31).

The

plaintiffs brought the case as a putative class and collective
action on behalf of all service employees who worked at Gramercy
Tavern between June 23, 2011, and September 15, 2016.

(Compl., ¶¶

4-5,

conditional

32-57).

After

the

defendants

consented

to

certification of an FLSA collective action, notice was sent to
putative members of the collective, and Syed A. Tahir, Andy Gomez,
Luis

Rosario,

Hanuman

Welch,

and

Diana

Arnold

opted

in.

(Declaration of Jeanne M. Christensen dated March 23, 2017, Docket
no. 54 (“Christensen Decl.”), ¶¶ 20-24).
The parties then engaged in targeted discovery that involved
the

production

of

more

(Christensen Decl., ¶ 30).

than

12,000

pages

of

documents.

These included complete payroll and

time records for the named plaintiffs and the opt-in plaintiffs;
a sampling of payroll and time records and tip sheets for the class
members; contracts, invoices, and receipts for private events over
a four-year period; and lists of class members indicating their
job

titles,

dates

of

employment,

and

hours

worked

per

year.

(Christensen Decl., ¶ 32).
On

September

15,

2016,

the

parties

attended

a

day-long

mediation session with Carol A. Wittenberg, an experienced labor
and employment mediator at JAMS Inc.

(Christensen Decl., ¶ 25).

At the conclusion of that process, they agreed to the framework
2

for a resolution of the action and executed a Memorandum of
Understanding.
details

of

(Christensen Decl., ¶¶ 25-26).

the

agreement

Agreement and Release.

were

memorialized

Subsequently, the
in

a

Settlement

(Christensen Decl., ¶ 26).

Settlement Terms
Pursuant to the terms of the settlement, the defendants agreed
to create a Settlement Fund of $695,000.00.
and

Release

(“Settlement

Agreement”),

Christensen Decl., §§ 2.26, 4.1(H)-(I)).

(Settlement Agreement

attached

as

Exh.

1

to

The net amount of that

fund after deducting attorneys’ fees, costs, administrative fees,
and enhancement awards, would then be allocated among class members
based on a point system derived from the number of hours that they
worked during the class period.
(D)).

(Settlement Agreement § 4.1(A)-

Under the Settlement Agreement, plaintiffs’ counsel could

apply to the court for an award of attorneys’ fees of up to
$231,666.67, or one-third of the Settlement Fund, together with
costs

of

Similarly,

up

to

the

$5,000.00.
plaintiffs

(Settlement
could

seek

Agreement,

enhancement

§

4.2).

awards

of

$7,000.00 for Mr. Siddiky; $6,000.00 each for Mr. Maruf and Mr.
Tahir; and $1,000.00 each for Mr. Gomez, Mr. Rosario, Mr. Welch,
and Ms. Arnold.

(Settlement Agreement, § 4.1(G)).

After payment

of expenses and distribution of the net Settlement Fund to class
members, any funds remaining as a result, for example, of unclaimed
settlement checks, would be paid to City Harvest, a charitable
3

organization.

(Settlement Agreement, § 4.1(E)).

Discussion
A. Class Certification
The parties seek certification of a settlement class of all
persons

who

worked

as

a

tipped

“captains,”

“servers,”

“bartenders,” “bussers/backwaiters,” “food runners,” or “coffee
runners” at Gramercy Tavern during the period from June 23, 2011,
through September 15, 2016.

(Settlement Agreement, §§ 2.4, 2.23).

In order to be certified, a proposed class must generally
meet all of the standards of Rule 23(a) and then satisfy the
requirements of one of the three categories in Rule 23(b).
1. Rule 23(a)
As set forth in Rule 23(a), the prerequisites for any class
action are that:
(1) the class is so numerous that joinder of all members
is impracticable; (2) there are questions of law or fact
common to the class; (3) the claims or defenses of the
representative parties are typical of the claims or
defenses of the class; and (4) the representative
parties will fairly and adequately protect the interests
of the class.
a. Numerosity
Numerosity is presumed where the proposed class includes more
than 40 members.

Consolidated Rail Corp. v. Town of Hyde Park, 47

F.3d 473, 483 (2d Cir. 1995); Shepard v. Rhea, No. 12 Civ. 7220,
2014 WL 5801415, at *4 (S.D.N.Y. Nov. 7, 2014).
numerosity

requirement

is

satisfied
4

because

Here, the
there

are

approximately 220 class members.

(Declaration of Abigail Schwartz

dated March 22, 2017, attached as Exh. 6 to Christensen Decl., ¶
7).
b. Commonality
“[A]n issue is common to the class when it is susceptible to
generalized, class-wide proof.”

In re Nassau County Strip Search

Cases, 461 F.3d 219, 227 (2d Cir. 2006).

Accordingly, a court

must determine whether the class members’ claims “will in fact
depend on the answers to common questions,” Wal-Mart Stores, Inc.
v. Dukes, 564 U.S. 338, 356 (2011), and whether a class action is
likely to “generate common answers apt to drive the resolution of
the litigation,” id. at 350 (emphasis omitted) (quoting Richard A.
Nagarato, Class Certification in the Age of Aggregate Proof, 84
N.Y.U. L. Rev. 97, 132 (2009)).

In this case, there are plainly

common issues concerning whether the defendants unlawfully applied
a minimum wage tip credit by including ineligible employees in the
tip pool and distributing gratuities to them.
c. Typicality
“Typicality requires that the claims or defenses of the class
representatives be typical of the claims and defenses of the class
members.

This requirement ‘is satisfied when each class member’s

claim arises from the same course of events, and each class member
makes

similar

liability.’”

legal

arguments

to

prove

the

defendant’s

Brown v. Kelly, 609 F.3d 467, 475 (2d Cir. 2010)
5

(internal citation omitted) (quoting Marisol A. v. Giuliani, 126
F.3d 372, 376 (2d Cir. 1997)).
unlawful

conduct

was

directed

“When it is alleged that the same
at

or

affected

both

the

named

plaintiff and the class sought to be represented, the typicality
requirement is usually met irrespective of minor variations in the
fact patterns underlying individual claims.”
987 F.2d 931, 936-37 (2d Cir. 1993).

Robidoux v. Celani,

The claims of the named

plaintiffs are typical of those of the class members in this action
because the defendants applied the same wage and tip policies to
all tipped employees.
d. Adequacy of Representation
Finally, “adequacy of representation entails inquiry as to
whether: 1) plaintiff’s interests are antagonistic to the interest
of other members of the class and 2) plaintiff’s attorneys are
qualified, experienced and able to conduct the litigation.”

Baffa

v. Donaldson, Lufkin & Jenrette Securities Corp., 222 F.3d 52, 60
(2d Cir. 2000).
opt-in

Here, the interests of the named plaintiffs and

plaintiffs

align

with

those

of

all

class

members.

Furthermore, plaintiffs’ counsel, Wigdor LLP (“Wigdor” or “Class
Counsel”), have vast experience in litigating employment cases,
including wage and hour claims.
2. Rule 23(b)
The plaintiffs here propose certification of a damages class
under Rule 23(b)(3).

Certification under Rule 23(b)(3) requires
6

that common questions “predominate over any questions affecting
only individual members,” and class resolution must be “superior
to other available methods for fairly and efficiently adjudicating
the controversy.”
predominance

and

Fed. R. Civ. P. 23(b)(3).
superiority

of

class

In assessing the

treatment,

courts

must

consider:
(A) the class
controlling the
actions;

members’ interests in
prosecution or defense

individually
of separate

(B) the extent and nature of any litigation concerning
the controversy already begun by or against class
members;
(C) the desirability or undesirability of concentrating
the litigation of the claims in the particular forum;
and
(D) the likely difficulties in managing a class action.
Fed. R. Civ. P. 23(b)(3).
a. Predominance
“Predominance is satisfied ‘if resolution of some of the legal
or factual questions that qualify each class member’s case as a
genuine controversy can be achieved through generalized proof, and
if these particular issues are more substantial than the issues
subject only to individualized proof.’”

Roach v. T.L. Cannon

Corp., 778 F.3d 401, 405 (2d Cir. 2015) (quoting In re U.S.
Foodservice Inc. Pricing Litigation, 729 F.3d 108, 118 (2d Cir.
2013)).

Here, common issues predominate since the defendants’ tip

policies applied to all of the class members, and damages can be
7

assessed on the basis of a common formula and do not require
individualized

determinations.

See

Hart

v.

Rick’s

Cabaret

International, Inc., 60 F. Supp. 3d 447, 472-73 (S.D.N.Y. 2014).
b. Superiority
In wage and hour cases such as this, class actions are often
superior for three very practical reasons. First, “there is reason
to believe that class members may lack familiarity with the legal
system,

discouraging

them

from

pursuing

individual

claims.”

Jankowski v. Castaldi, No. 01 CV 164, 2006 WL 118973, at *4
(E.D.N.Y. Jan. 13, 2006) (quoting Velez v. Majik Cleaning Service,
No. 03 Civ. 8698, 2005 WL 106895, at *5 (S.D.N.Y. Jan. 19, 2005));
accord Balverde v. Lunella Ristorante, Inc., No. 15 Civ. 5518,
2017 WL 1954934, at *9 (S.D.N.Y. May 10, 2017).

Second, many class

members may still be employed by the defendants and therefore be
reluctant

to

retaliation.

initiate

individual

litigation

for

fear

of

See Perez v. Isabella Geriatric Center, Inc., No. 13

Civ. 7453, 2016 WL 4618932, at *11 (S.D.N.Y. Sept. 1, 2016),
adopted in part and rejected in part on other grounds, 2016 WL
5719802 (S.D.N.Y. Sept. 30, 2016); see also Schear v. Food Scope
America, Inc., 297 F.R.D. 114, 126 (S.D.N.Y. 2014).

And, third,

because the value of any individual claim may be small, it is not
economically efficient to litigate each claim separately.
Perez, 2016 WL 4618932, at *11; Schear, 297 F.R.D. at 126.

8

See

All of

these considerations indicate that a class action is superior in
this case.
B. Fairness
Class action settlements must be approved by the court to
ensure both procedural and substantive fairness.
23(e).

To

determine

procedural

fairness,

Fed. R. Civ. P.

courts

negotiation process that resulted in the settlement.

assess

the

See Charron

v. Weiner, 731 F.3d 241, 247 (2d Cir. 2013); Wal-Mart Stores, Inc.
v. Visa U.S.A. Inc., 396 F.3d 96, 116 (2d Cir. 2005); D’Amato v.
Deutsche Bank, 236 F.3d 78, 85 (2d Cir. 2001).

In assessing

substantive fairness, courts utilize the nine factors set forth in
City of Detroit v. Grinnell Corp., 495 F.2d 448 (2d Cir. 1974),
abrogated on other grounds by Goldberger v. Integrated Resources,
Inc.,

209

F.3d

43

(2d

Cir.

2000),

to

evaluate

settlement is fair, adequate, and reasonable.

whether

the

See Charron, 731

F.3d at 247; Seijas v. Republic of Argentina, Nos. 04 Civ. 400 et
al.,

2017

WL

1511352,

at

*6

(S.D.N.Y.

April

27,

2017).

Furthermore, a judicial determination that a settlement is fair
and reasonable is required in any FLSA case, whether brought on a
class or individual basis. Cheeks v. Freeport Pancake House, Inc.,
796 F.3d 199, 203-04, 206 (2d Cir. 2015).
1. Procedural Fairness
A presumption of procedural fairness applies to a proposed
class settlement where that settlement is “reached in arm’s-length
9

negotiations between experienced, capable counsel after meaningful
discovery.”

McReynolds v. Richards–Cantave, 588 F.3d 790, 803 (2d

Cir. 2009) (quoting Wal–Mart Stores, 396 F.3d at 116); accord
Charron, 741 F.3d at 247.

Here, counsel are highly experienced

both in wage and hour cases and in complex litigation.

As

discussed above, they engaged in targeted discovery in connection
with their negotiations.

And those negotiations were conducted

before a respected mediator.
L.L.C.,

58

F.

Supp.

3d

See Romero v. La Revise Associates,

411,

420

(S.D.N.Y.

2014)

(applying

presumption of procedural fairness where mediation took place with
experienced mediator).

Accordingly, the settlement was reached on

the basis of fair procedures. 2
2. Substantive Fairness
In Grinnell, the Second Circuit identified nine factors to be
considered in assessing the substantive fairness of a settlement:
(1) the complexity, expense and likely duration of the
litigation; (2) the reaction of the class to the
settlement; (3) the stage of the proceedings and the
amount of discovery completed; (4) the risks of
establishing liability; (5) the risks of establishing
damages; (6) the risks of maintaining the class action
through the trial; (7) the ability of the defendants to
2

A further procedural requirement is that the notice of the
settlement be provided to the appropriate state and federal
officials at least ninety days prior to final approval pursuant to
the Class Action Fairness Act (“CAFA”). 28 U.S.C. § 1715(b), (d);
Perez v. Jupada Enterprises, Inc., No. 10 Civ. 3118, 2012 WL
3042928, at *1-2 (S.D.N.Y. July 25, 2012) (holding that
requirements of CAFA apply to FLSA class settlements). Here, the
parties have certified that this requirement has been satisfied.
(Declaration of Jason B. Jendrewski dated April 24, 2017, ¶ 3).
10

withstand a greater judgment; (8) the range of
reasonableness of the settlement fund in light of the
best possible recovery; [and] (9) the range of
reasonableness of the settlement fund to a possible
recovery in light of all the attendant risks of
litigation.
495 F.2d at 463 (internal citations omitted).

I will address each

in turn.
a. Complexity of the Litigation
It would be expensive and time-consuming to take this case to
trial.

“As courts recognize, most ‘class actions are inherently

complex and settlement avoids the costs, delays and multitude of
other problems associated with them.’ Guippone v. BH S&B Holdings,
LLC, No. 09 Civ. 1029, 2016 WL 5811888, at *5 (S.D.N.Y. Sept. 23,
2016) (quoting Johnson v. Brennan, No. 10 Civ. 4712, 2011 WL
4357376, at *8 (S.D.N.Y. Sept. 16, 2011)).

Here, the plaintiffs

would still have to move for class certification, a motion the
defendants would oppose.

If the motion were granted, the parties

would engage in full-blown discovery with respect to 220 class
members.

Following discovery, the parties would likely file

summary judgment motions, and unless those motions fully disposed
of all issues, the parties would proceed to trial. There, not only
would liability be contested, but the parties would submit evidence
with respect to each individual class member.

The settlement

avoids these tasks and provides relief to the class quickly,

11

efficiently, and without further risk.

The first Grinnell factor

therefore favors approval.
b. Reaction to the Settlement
“It is well-settled that the reaction of the class to the
settlement is perhaps the most significant factor to be weighed in
considering its adequacy.”

Babcock v. C. Tech Collections, Inc.,

Nos. 14 CV 3124, 14 CV 3576, 2017 WL 1155767, at *6 (E.D.N.Y. March
27, 2017) (quoting Maley v. Del Global Technology Corp., 186 F.
Supp. 2d 358, 362-63 (S.D.N.Y. 2002); accord Pennsylvania Public
School Employees’ Retirement System v. Bank of America Corp., 318
F.R.D. 19, 24 (S.D.N.Y. 2016).

The class members in this case

were fully apprised of the terms of the settlement. None objected,
and only one opted out. The reaction of the class was thus markedly
positive.
c. Discovery
As

described

completed,

the

above,

parties

although
exchanged

formal
targeted

discovery

was

documentation

not
in

connection with mediation. This was an efficient means of ensuring
that counsel had sufficient information to evaluate the risks and
potential rewards of litigation.

This factor, as well, therefore

favors approval.
d. Risks of Establishing Liability and Damages
“[I]f settlement has any purpose at all, it is to avoid a
trial on the merits because of uncertainty of the outcome.” Azogue
12

v. 16 for 8 Hospitality LLC, No. 13 Civ. 7899, 2016 WL 4411422, at
*5 (S.D.N.Y. Aug. 19, 2016) (quoting In re Ira Haupt & Co., 304 F.
Supp.

917,

934

(S.D.N.Y.

1969)).

Here,

the

settlement

is

advantageous to the plaintiffs because it avoids substantial risks
involved in proving liability. For example, there is a significant
possibility that a court would find that the administrative fee
collected for private events was not a gratuity and therefore was
not required to be distributed to the plaintiff employees. Second,
a court could determine that polishers and expediters were tipeligible, such that their participation in the tip pool did not
violate the plaintiffs’ rights.

Furthermore, even if the tip pool

was diluted by the participation of tip-ineligible employees,
there is precedent to the effect that, while this would constitute
an FLSA minimum wage violation, it would not violate the NYLL as
long as class members received the minimum wage.

See Murphy v.

Lajaunie, No. 13 Civ. 6503, 2016 WL 1192689, at *4-6 (S.D.N.Y.
March 21, 2016); Schear, 297 F.R.D. at 133; but see Maldonado v.
BTB Events & Celebrations, Inc., 990 F. Supp. 2d 382, 387 (S.D.N.Y.
2013); Copantitla v. Fiskardo Estiatorio, Inc., 788 F. Supp. 2d
253, 290 (S.D.N.Y. 2011).
effect

upon

class

Such a holding would have a devastating

members

who

had

not

opted

into

the

FLSA

collective here, since they would be left entirely without relief
for minimum wage claims in this action.

See Damassia v. Duane

Reade, Inc., 250 F.R.D. 152, 161 (S.D.N.Y. 2008) (holding that
13

class and collective actions “‘are mutually exclusive,’ so suits
seeking relief under the FLSA may proceed only through a collective
action, and not a class action” (quoting Lachapelle v. OwensIllinois, Inc., 513 F.2d 286, 289 (5th Cir. 1975))).
e. Risk of Maintaining a Class
The plaintiffs also face uncertainty with respect to their
ability to maintain a class through trial.

Because the class

contains employees in a variety of jobs, there is a risk that the
plaintiffs would ultimately be unable to demonstrate commonality.
Furthermore,
individualized

since

each

class

damages,

the

member

would

defendants

be

entitled

could

to

challenge

certification under Rule 23(b)(3).
f. The Defendants’ Ability to Pay
The parties have not produced information showing that the
defendants would be unable to pay a judgment greater than the
amount of the settlement.
approval.
greater

This factor therefore does not favor

Nevertheless, the “defendants’ ability to withstand a

judgment,

standing

settlement is unfair.”

alone,

does

not

suggest

that

the

In re Austrian and German Bank Holocaust

Litigation, 80 F. Supp. 2d 164, 178 n. 9 (S.D.N.Y. 2000); accord
Viafara v. MCIZ Corp., No. 12 Civ. 7452, 2014 WL 1777438, at *7
(S.D.N.Y. May 1, 2014); Frank v. Eastman Kodak Co., 228 F.R.D.
174, 186 (W.D.N.Y. 2005).

14

g. Reasonableness of the Settlement
“[T]he value of a settlement to the settling plaintiffs is
the most important factor in the court’s decision to approve or
disapprove a settlement.”

4 William B. Rubenstein, Newberg on

Class Actions § 13:49 (5th ed.) (footnote omitted).

That value,

of course, must be judged in relation to the optimal recovery that
the plaintiffs could receive at trial, discounted by the risks
specific to their claims.

See Mars Steel Corp. v. Continental

Illinois Bank & Trust Co., 834 F.2d 677, 682 (7th Cir. 1987) (“A
settlement is fair to the plaintiffs in a substantive sense . . .
if it gives them the expected value of their claim if it went to
trial, net of the costs of trial (minus the costs of settlement,
but we can disregard that detail).”).
Here,

Class

Counsel

estimate

a

fifty

percent

chance

of

complete success on their minimum wage claims, which results in a
value of approximately $900,000 for those claims.

(Christensen

Decl.,

as

¶

87).

That

compensatory damages.

figure

includes

(Tr. at 5-6). 3

liquidated

well

as

Similarly, counsel discount

their claims for disgorgement under NYLL § 196-d by fifty percent,
bringing the value of this claim to $600,000.
¶ 87).

(Christensen Decl.,

Class Counsel do not include in their calculations any

value for their claim that service charges for private events

3

“Tr.” refers to the transcript of the hearing on final
approval of the settlement held on April 6, 2017.
15

constituted

gratuities,

having

evaluated

defendants’ arguments on this issue.

the

strength

of

the

(Christensen Decl., ¶ 88).

Thus, the value of the settlement -- $695,000 -- is approximately
forty-six percent of $1.5 million, which is what Class Counsel
estimate to be the total value of both claims.

But they have

already discounted each viable claim by one-half, so the settlement
value

is

more

accurately

characterized

as

about

twenty-three

percent of the maximum possible recovery of $3,000,000.
“[T]here is ‘a range of reasonableness with respect to a
settlement,’ and the settlement amount’s ratio to the maximum
potential recovery need not be the sole, or even the dominant,
consideration when assessing the settlement’s fairness.”

In re

Global Crossing Securities and ERISA Litigation, 225 F.R.D. 436,
460 (S.D.N.Y. 2004) (internal citation omitted) (quoting Newman v.
Stein, 464 F.2d 689, 693 (2d Cir. 1972)).
a

proposed

settlement

may

only

amount

Indeed, “the fact that
to

a

fraction

of

the

potential recovery does not, in and of itself, mean that the
proposed

settlement

disapproved.”

is

grossly

inadequate

and

should

be

Grinnell, 495 F.2d at 455 (footnote omitted).

In

any event, the settlement here falls comfortably within the range
for class settlements approved in this district.

See Trinidad v.

Pret a Manger (USA) Ltd., No. 12 Civ. 6094, 2014 WL 4670870, at *7
(S.D.N.Y. Sept. 19, 2014) (approving FLSA class settlement of 2025% of maximum recovery); Athale v. Sinotech Energy Ltd., No. 11
16

Civ. 5831, 2013 WL 11310686, at *6-7 (S.D.N.Y. Sept. 4, 2013)
(approving class settlement of 13% of maximum recovery calculated
by plaintiffs’ expert); In re Citigroup Inc. Bond Litigation, 296
F.R.D. 147, 157 (S.D.N.Y. 2013) (approving class settlement of
approximately 24% of maximum recovery); In re IMAX Securities
Litigation, 283 F.R.D. 178, 191 (S.D.N.Y. 2012) (approving class
settlement of 13% of maximum recovery); In re Giant Interactive
Group, Inc. Securities Litigation, 279 F.R.D. 151, 162 (S.D.N.Y.
2011) (approving class settlement of 16.5% of maximum provable
damages).

For the reasons articulated above, the plaintiffs would

face significant risks if they were to proceed to trial.
settling,

they

receive

substantial

sums,

estimated

approximately $2,000 on average for each class member.
13).

Yet, by
at

(Tr. at

After payment of attorneys’ fees, litigation expenses, and

administration costs, all of the settlement fund would be paid out
to class members, and none of it would revert to the defendants.
(Tr. at 13).

The terms of the settlement, therefore, including

its magnitude and the allocation of payments based on the number
of hours worked by each class member, are reasonable.
3. FLSA Approval
“[T]he FLSA is a uniquely protective statute.”
F.3d at 207.

Cheeks, 796

Accordingly, in addition to the factors that govern

approval of any class action settlement, a court evaluating the
settlement

of

an

FLSA

action

must

17

take

into

account

other

considerations, including any confidentiality requirements, the
scope of any release, and any provision for attorneys’ fees.

Id.

at 206.
The policies underlying the FLSA preclude confidentiality
provisions in an FLSA settlement.
Among the people who require the protection of the FLSA
are workers who are poorly educated and non-English
speaking.
Some
of
these
workers
may
have
an
understandable aversion to courthouses and lawyers. At
the same time, such persons are especially vulnerable to
workplace exploitation and have much to gain from the
diffusion of information about their employment rights.
A non-disclosure provision blocks such information.
Lopez v. Nights of Cabiria, LLC, 96 F. Supp. 3d 170, 179 (S.D.N.Y.
2015) (footnotes omitted).

Thus, “[b]arring the plaintiffs from

speaking about their experience would ‘further[] resolution of no
bona fide dispute between the parties,’ but rather ‘thwart[]
Congress’s intent to ensure widespread compliance with the statute
. . . by silencing the employee who has vindicated a disputed FLSA
right.’”

Id. (alterations in original) (quoting Dees v. Hydadry,

Inc., 706 F. Supp. 2d 1227, 1242 (M.D. Fla. 2010)).
In this case, the Settlement Agreement originally contained
a

provision

limiting

the

plaintiffs’

communications.

Specifically, it provided in relevant part, that
Plaintiffs, Class Counsel, Defendants, and Defense
Counsel agree that they will not issue, send, or post,
or cause to be issued, sent, or posted, any press
release, posting, e-mail, or other verbal or written
communication to any electronic, print, or digital
media, blog, or social networking site (including, but
18

not limited to, Facebook, LinkedIn, Instagram, and
Twitter) regarding the Parties’ settlement discussions
and/or the facts and events leading up to the settlement.
If specifically asked about the status of the Litigation
or
this
Agreement,
Plaintiffs,
Class
Counsel,
Defendants, and Defense Counsel agree that they will
respond solely by stating that the Parties’ dispute has
been amicably resolved.
(Settlement Agreement, § 5.4).

Although this provision did not

muzzle absent class members, it did prevent the named plaintiffs
and the opt-in plaintiffs from discussing the settlement.
15).
the

(Tr. at

However, at my urging (Tr. at 14-16), the parties modified
agreement,

and

it

now

limits

only

the

communications

of

counsel; the parties, including opt-in plaintiffs, are free to
discuss

the

terms

of

the

settlement.

(Rider

to

Settlement

Agreement and Release, attached as exhibit to Letter of Jason D.
Jendrewski dated April 11, 2017). Thus, there is no confidentiality
impediment to approval of the settlement.
Nor
release.

does

the

Courts

Settlement
will

reject

Agreement
FLSA

contain

settlements

an

overbroad

that

contain

“an overbroad release 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 Nights of Cabiria, 96 F. Supp. 3d
at 181).

With respect to absent class members, the Settlement

Agreement releases the defendants only for wage and hour claims
that

accrued

prior

to

September

19

15,

2016,

the

date

of

the

successful mediation.

(Settlement Agreement, § 5.1(A)).

By

contrast, the named plaintiffs and opt-in plaintiffs release any
and

all

claims,

otherwise.

whether

related

to

wage

(Settlement Agreement, § 5.1(D)).

for two reasons.

and

hour

issues

or

This is appropriate

First, unlike the absent class members, these

plaintiffs have had the advice of class counsel and can waive their
rights knowingly.

Second, they are receiving enhancement payments

under the Settlement Agreement that constitute consideration for
this broader release.
Finally, the fairness of the settlement is not affected by
the provision for attorneys’ fees.

The Settlement Agreement does

not establish the fees which Class Counsel will receive.

Rather,

it sets a limit on the amount that they may seek by application to
the court.

It is therefore within the discretion of the court to

reallocate funds between the class and Class Counsel if that is
necessary to assure a fair outcome. See Trinidad, 2014 WL 4670870,
at *8 (approving FLSA class settlement after reallocating portion
of attorneys’ fees and enhancement awards to class settlement
fund).
C. Enhancement Awards
Mr.

Siddiky

and

Mr.

preparation of the Complaint.

Maruf

assisted

Class

Counsel

(Christensen Decl., ¶ 91).

in

They,

together with Mr. Tahir, provided information and documents, met
with

Class

Counsel,

communicated
20

with

other

class

members,

assisted counsel in preparing for settlement negotiations, and
attended the mediation session.

(Christensen Decl., ¶ 91).

These

services merit the enhancement awards requested: $7,000 for Mr.
Siddiky and $6,000 each for Mr. Maruf and Mr. Tahir.

See Waggoner

v. U.S. Bancorp, No. 15-cv-1626, 2016 WL 7474408, at *2, 4 (N.D.
Ohio

Dec.

29,

2016)

(approving

$10,000

enhancement

in

FLSA

settlement); Toure v. Amerigroup Corp., No. 10 CV 5391, 2012 WL
3240461, at *6 (E.D.N.Y. Aug. 6, 2012) (approving settlement in
FLSA

action

including

$10,000

enhancement

awards

for

named

plaintiffs and $5,000 awards for opt-in plaintiffs).
It would be anomalous to grant enhancement awards to opt-in
plaintiffs who do no more than “raise their hands” in response to
notice of a collective action.

However, in this case, Mr. Gomez,

Mr. Rosario, Mr. Welch, and Ms. Arnold all did more than that.
They met with counsel and provided information and documents.
(Christensen Decl., ¶ 91; Tr. at 6-8). Furthermore, like the named
plaintiffs, they exposed themselves to possible retaliation for
their public participation in the case.

See Asare v. Change Group

New York, Inc., No. 12 Civ. 3371, 2013 WL 6144764, at *15 (S.D.N.Y.
Nov. 18, 2013) (approving enhancement awards in FLSA settlement
and noting, “In the employment context, where workers are often
blacklisted

if

they

are

considered

trouble

representatives are vulnerable to retaliation.
is

no

record

of

retaliation,
21

class

makers,

class

Even where there

representatives

merit

recognition for assuming such risk.” (internal citation omitted)).
Therefore,

modest

appropriate.

enhancement

awards

of

$1,000

each

are

See Zeltser v. Merrill Lynch & Co., No. 13 Civ. 1531,

2014 WL 4816134, at *11 (approving enhancement awards of $4,000
for

opt-in

plaintiffs

in

FLSA

settlement);

Silverstein

v.

AllianceBernstein, L.P., No. 09 Civ. 5904, 2013 WL 7122612, at *10
(S.D.N.Y. Dec. 20, 2013) (approving enhancement awards of $1,500
for opt-in plaintiffs in FLSA settlement); Aponte v. Comprehensive
Health Management, Inc., No. 10 Civ. 4825, 2013 WL 1364147, at *7
(S.D.N.Y. April 2, 2013) (approving enhancement awards of $500 to
opt-in plaintiffs in FLSA settlement).
D. Attorneys’ Fees and Costs
Class

Counsel

seek

attorneys’

fees

of

$231,666.67,

representing one-third of the total settlement of $695,000.00.
(Settlement Agreement, § 4.2; Christensen Decl., ¶¶ 111, 113).
Counsel’s

retainers

with

the

named

plaintiffs

provide

for

contingency fees of one-third of any recovery. (Christensen Decl.,
Exh. 10).

Awarding attorneys’ fees on a percentage basis is

favored in class actions.
Courts in the Second Circuit tend to grant class counsel
a percentage of any settlement, rather than utilize the
“lodestar method” (multiplying the hours reasonably
expended by a reasonable hourly rate), because the
percentage method aligns the interests of the class and
its counsel and provides a powerful incentive for the
efficient
prosecution
and
early
resolution
of
litigation.
The lodestar method, on the other hand,
disincentivizes early settlements, tempts lawyers to run
22

up their hours, and “compels district courts to engage
in a gimlet-eyed review of line-item fee audits.” Id.
Raniere v. Citigroup Inc., 310 F.R.D. 211, 220 (S.D.N.Y. 2015)
(internal citation omitted) (quoting Wal–Mart, 396 F.3d at 121);
see also Velez v. Novartis Pharmaceuticals Corp., No. 04 Civ. 9194,
2010 WL 4877852, at *21 (S.D.N.Y. Nov. 30, 2010) (“[T]he Second
Circuit favors awarding fees according to the ‘percentage-of-thefund’ over the ‘lodestar’ method in common fund cases.”).

To

determine whether a fee is reasonable, courts look to the factors
identified by the Second Circuit in Goldberger, 209 F.3d at 50.
See Wal–Mart, 396 F.3d at 121; Raniere, 310 F.R.D. at 220.

Those

factors are (1) the time and labor expended by counsel, (2) the
magnitude and complexities of the litigation, (3) the risk of the
litigation,

(4)

the

quality

of

the

representation,

(5)

the

requested fee in relation to the settlement, and (6) public policy
considerations.

Goldberger, 209 F.3d at 50.

1. Class Counsel’s Time and Labor
As in Raniere, the first Goldberger factor cuts both ways in
this case.

On one hand, “while class counsel [have] prosecuted

this case vigorously, this settlement comes at a fairly early stage
of the litigation.”

Raniere, 310 F.R.D. at 221.

Consequently,

“[t]he parties have not engaged in full discovery, drafted summary
judgment briefing, or come remotely close to trial.”

Id.

On the

other hand, counsel have undoubtedly devoted substantial effort to

23

organizing

the

class

action,

taking

engineering a favorable settlement.

targeted

See id.

discovery,

One measure of that

effort may be Class Counsel’s lodestar, which is also utilized
cross-check any percentage award.
Goldberger, 209 F.3d at 50.

and

to

See Wal-Mart, 396 F.3d at 123;

According to Class Counsel, they

expended slightly more than 350 hours of time, at rates ranging
from $180 per hour for paralegal work to $750 per hour for the
work

of

a

partner,

for

a

total

lodestar

(Christensen Decl., ¶ 112 & Exh. 8).

of

$142,905.00.

Thus, the fee award they

seek is a multiplier of 1.62 of the lodestar.

(Christensen Decl.,

¶ 113).
Unfortunately,

the

lodestar

is

of

little

assistance

in

evaluating Wigdor’s application in this case. First, Class Counsel
have not submitted time records that would allow me to assess the
work performed.

Instead, they have provided only the total number

of hours recorded by each attorney.

(Christensen Decl., Exh. 8).

To be sure, in a percentage-of-the-fund case, the hours “need not
be exhaustively scrutinized.”

Goldberger, 209 F.3d at 50.

But

some detail with respect to the number of hours devoted to each
type of task is necessary for the court to evaluate the effort of
counsel.
Second, “[t]here is little consensus in this district on the
appropriate range for lodestar multipliers.”

Fujiwara v. Sushi

Yasuda Ltd., 58 F. Supp. 3d 424, 438 (S.D.N.Y. 2014).
24

One court found that “[i]n recent years multipliers of
between 3 and 4.5 have become common” and described 2.09
as “at the lower end of the range of multipliers awarded
by courts within the Second Circuit.”
In re Lloyd’s
American Trust Fund Litigation, No. 96 Civ. 1262, 2002
WL 31663577, at *27 (S.D.N.Y. Nov. 26, 2002); see also
Maley v. Del Global Technologies Corp., 186 F. Supp. 2d
358, 369 (S.D.N.Y. 2002) (finding multiplier of 4.65
“well within the range awarded by courts in this Circuit
and courts throughout the country”).
This Court has
held that “[a]s a rule, post-Goldberger courts . . .
have generally refused multipliers as high as 2.03.” In
re Currency Conversion, 263 F.R.D. at 129 (quoting In re
Merrill
Lynch
&
Co.
Research
Report
Securities
Litigation, No. 02 MDL 1484, 2007 WL 4526593, at *21
(S.D.N.Y. Dec. 20, 2007)); see also Tiro v. Public House
Investments, LLC, Nos. 11 Civ. 7679, 11 Civ. 8249, 2013
WL 4830949, at *15 (S.D.N.Y. Sept. 10, 2013) (awarding
multiplier of 1 and noting “[t]his court is not one that
routinely authorizes settlements at six, seven and eight
times lodestar . . . .
[I]f the lodestar is
significantly out of line with the percentage of
recovery it raises a red flag.”); Silverstein v.
AllianceBernstein, L.P., No. 09 Civ. 5904, 2013 WL
7122612 (S.D.N.Y. Dec. 20, 2013) (awarding one-third of
settlement fund with no multiplier in wage class
action). And several courts have awarded only a fraction
of the lodestar amount (confusingly referred to as a
“negative lodestar”) when the lodestar is a high
proportion of the settlement fund. See, e.g., Fears v.
Wilhelmina Model Agency, No. 02 Civ. 4911, 2009 WL
2958396, at *8 (S.D.N.Y. Sept. 16, 2009); In re NTL,
Inc. Securities Litigation, No. 02 Civ. 3013, 2007 WL
623808, at *8 (S.D.N.Y. March 1, 2007); Beane v. Bank of
N.Y. Mellon, No. 07 Civ. 9444, 2009 WL 874046, at *8
(S.D.N.Y. March 31, 2009); Silberblatt v. Morgan
Stanley, 524 F. Supp. 2d 425, 434 (S.D.N.Y. 2007).
Id. (alterations in original).

In Fujiwara, the court concluded

that “[t]he lodestar is worthless as a ‘cross check’ on the
percentage recovery method when there is so little agreement as to
what constitutes a reasonable multiplier.”

25

Id.

Even if there were consensus with respect to a reasonable
range of multipliers, the value of the lodestar as a measuring
stick is limited by the difficulty of ascertaining appropriate
billing rates in a case such as this.

In the typical fee-shifting

case, a court seeks “to use the approximate market rate for an
attorney’s services in calculating the presumptively reasonable
fee.”

Arbor Hill Concerned Citizens Neighborhood Association v.

County of Albany, 522 F.3d 182, 192 (2d Cir. 2008).

According to

the Second Circuit, “by focusing on the hourly rate at which a
client who wished to pay no more than necessary would be willing
to compensate his attorney, the district court can enforce market
discipline, approximating the negotiation that might ensue were
the client actually required to pay the attorney’s fees.”

Id.

Yet this free enterprise model breaks down in circumstances where
there is not a robust market for the type of legal services at
issue.
In this case, Wigdor seeks fees at the rates of $750 per hour
for Jeanne M. Christensen, a partner; $450 per hour for Tanvir
Rahman, a senior associate; $390 per hour for Elizabeth Chen, an
associate; and $180 per hour for paralegals.
¶ 102 & Exh. 8).

(Christensen Decl.,

Class Counsel represent that this is a discount

from the rates that they regularly charge hourly paying clients.
(Christensen Decl., ¶ 102).

But they also candidly acknowledge

that these are not market rates paid by plaintiffs in wage and
26

hour cases: “these are clients that generally are earning at most
$20 an hour, so they could never pay that.”
attorneys

in

these

cases

are

virtually

(Tr. at 10).
always

Instead,

retained

contingency basis, and there is no discernable hourly rate.

on

a

While

the Wigdor attorneys may indeed bill at the requested rates in
some practice areas, “factors may justify compensating an attorney
at a rate lower than his or her customary rate for a different
type of practice.”

Arbor Hill, 522 F.3d at 184 n.2.

Class Counsel nevertheless cite a number of FLSA cases in
which they have been awarded fees based, at least in part, on rates
similar to those they seek here.

See,e.g., Raniere, 310 F.R.D. at

221; Asare, 2013 WL 6144764, at *19.
little assistance.

These cases, however, are of

For instance, Raniere does not analyze whether

the requested rates were reflective of the market, and it notes
that fee request did not seek a multiplier over the lodestar.
F.3d at 221.

310

Similarly, in Asare, the court approved Wigdor’s

requested rates by comparison to rates approved in securities
cases, not in wage and hour actions.

2013 WL 6144764, at *19.

And there, counsel sought a fee representing less than twenty-five
percent of the settlement fund.

Id. at *16.

As the court noted in Fujiwara, “Courts in this District have
determined in recent cases that a fee ranging from $250 to $450 is
appropriate for experienced litigators in wage-and-hour cases.” 58
F. Supp. 3d at 437 (quoting Yuquilema v. Manhattan’s Hero Corp.,
27

No. 13 Civ. 461, 2014 WL 4207106, at *14 (S.D.N.Y. Aug. 20, 2014)).
Similarly,

in

a

quite

recent

case,

the

court

observed

that

“[a]lthough courts in this district have occasionally awarded
hourly rates of $550 and $600 to experienced senior litigators,
FLSA litigators are rarely awarded over $450 per hour.”

Manley v.

Midan Restaurant, Inc., No. 14 Civ. 1693, 2017 WL 1155916, at *11
(S.D.N.Y. March 27, 2017).

Yet even this precedent is suspect in

the sense that it appears to be based only on prior cases, none of
which

determine

what

a

client

would

be

willing

to

pay

for

representation in the same type of case.
Counsel should not be penalized for taking a case on a
contingency basis in circumstances where it is not possible to
charge hourly rates.

At the same time, they should not receive an

unwarranted windfall on the basis of rates that bear no relation
to a market for their services.

In this situation, the lodestar

necessarily has diminished utility, and greater reliance must be
placed on other relevant factors.
2. Magnitude and Complexity of the Litigation
This action is moderately large and complex.

As noted, it

involves a class of approximately 220 individuals in several
different job titles.

It comprises claims both of minimum wage

violations and of the unlawful withholding of gratuities.

28

3. Litigation Risk
As

discussed

above

in

connection

with

approval

of

the

Settlement Approval, this action involved risk with respect to
proving both liability and damages.

Furthermore, the plaintiffs’

ability to maintain it as a class action was uncertain.

Class

Counsel are entitled to reasonable compensation precisely because
of

their

willingness

to

provide

representation

despite

these

risks.
4. Quality of Representation
“To determine the ‘quality of the representation,’ courts
review,

among

other

things,

the

recovery

obtained

backgrounds of the lawyers involved in the lawsuit.”

and

the

Manley, 17

WL 1155916, at *9 (quoting Taft v. Ackermans, 02 Civ. 7951, 2007
WL 414493, at *10 (S.D.N.Y. Jan. 31, 2007)).

Here, Class Counsel

are highly experienced in employment cases generally and in wage
and hour cases in particular, see Raniere, 310 F.R.D. at 221
(“Class counsel [are] well-regarded in this District as skillful
and effective class-action advocates.”), and they engineered a
settlement quite favorable to the class.
5. Relation of the Fee to the Settlement
“Courts also consider the size of the settlement to ensure
that the percentage award does not constitute a ‘windfall.’”
Asare, 2013 WL 6144764, at *21.

In Raniere, the court approved

the requested fee but noted that “the proposed one-third fee is
29

quite high in relation to the settlement,” which was for a total
of $4,650,000.

360 F.R.D. at 221.

In Asare, in connection with

a settlement for $165,765, the court approved a fee of slightly
less than 25%, observing that “[c]ourts in this Circuit have
routinely granted requests of approximately one-quarter to onethird of the fund in cases with settlement funds substantially
larger than this one.”

2013 WL 6144764 at *21.

In Fujiwara, the

court reduced the fee award to 20% of the settlement fund of $2.4
million.

58 F. Supp. 3d at 431, 439.

In light of the settlement of $695,000 here and each of the
factors discussed above, a fee award of 25% of the settlement,
which equals $173,750, is fair and reasonable.

For 350 hours of

work, this equates to a blended hourly rate of almost $500 for
each attorney and paralegal.

From a different perspective, it

represents a multiplier of approximately 1.2 over the lodestar of
$142,905, as calculated by Class Counsel.

(Christensen Decl.,

Exh. 8).
6. Public Policy Considerations
Public policy supports a fee award in this range.

“The FLSA

and NYLL are remedial statutes designed to protect the wages of
workers.

Fair

compensation

for

attorneys

who

prosecute

those

rights by taking on such litigation furthers the remedial purpose
of those statutes.”

Asare, 2013 WL 6144764 at *22.

While a one-

third contingency may well be necessary to attract counsel to take
30