Marquez et al v. Paciullo
OPINION AND ORDER. For all the foregoing reasons, I approve the settlement in this matter. In light of the settlement, the action is dismissed with prejudice and without costs. The Clerk is respectfully requested to mark this matter closed. So ordered. (Signed by Magistrate Judge Henry B. Pitman on 11/13/2017). Copies transmitted to: All Counsel. (rjm)
Case 1:16-cv-02304-HBP Document 36 Filed 11/13/17 USDCSDNY
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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
16 Civ. 2304
-againstROBERTO'S RESTAURANT CORP., et al.,:
PITMAN, United States Magistrate:
Plaintiff commenced this action pursuant to the Fair
Labor Standards Act (the "FLSA"), 29 U.S.C.
201 et gg., and
the New York Labor Law (the "NYLL") to recover unpaid minimum
wages, overtime pay and spread-of-hours pay.
asserted a claim under the NYLL against defendants for misappropriating tips.
Plaintiff brought the action as a collective
action pursuant to 29 U.S.C.
216(b) with respect to the FLSA
claims, but the parties reached a settlement prior to the matter
being conditionally certified.
I presided over a settlement
conference held among the parties on September 14, 2017, during
which the parties came to an agreement concerning the essential
terms of a settlement.
The matter is currently before me on the
parties' joint application to approve a proposed settlement
agreement that they have reached (Docket Item ("D.I.'') 34).
Case 1:16-cv-02304-HBP Document 36 Filed 11/13/17 Page 2 of 10
parties have consented to my exercising plenary jurisdiction
pursuant to 28 U.S.C. § 636(c).
Plaintiff worked at defendants' restaurant beginning on
an unspecified date in 2001 through approximately March 8, 2016.
Plaintiff was initially a dishwasher, but was promoted to busboy
and, in 2009, to waiter.
He held this position until his employ-
ment with defendants ended in March 2016.
Plaintiff alleges that
he worked approximately 60 hours per week between March 2010 and
December 2013, and that he worked approximately 50 hours per week
beginning in January 2014 through the remainder of his employment.
Plaintiff claims that from March 2010 through March 2016
defendants never paid him wages or a salary.
alleges his only compensation was the tips he received from
Plaintiff also claims that he was required to surren-
der $150.00 of his weekly tips to defendants, based on the
defendants' representation that they needed to withhold this sum
In addition, plaintiff alleges that, on a weekly
basis, defendants presented him with, and he signed, checks for
approximately $500.00, which defendants would deposit into their
own bank account.
Although defendants contend that these checks
represented plaintiff's wages and that they actually
plaintiff $500.00 per week in cash because plaintiff did not have
a bank account, plaintiff claims that he never received these
Case 1:16-cv-02304-HBP Document 36 Filed 11/13/17 Page 3 of 10
funds and that the proceeds from these checks went to defendants'
Plaintiff claims that he is entitled to
$160,000.00 in unpaid wages, exclusive of liquidated damages,
interest and misappropriated tips.
Defendants deny plaintiff's claims.
the number of hours plaintiff alleges that he worked; defendants
contend that plaintiff worked only approximately 40 hours per
week and is not, therefore, entitled to overtime pay.
claim that their employees are prepared to provide testimony that
will support their contention regarding the number of hours
Defendants also argue that plaintiff was
properly paid at the appropriate tip credit minimum wage, in
cash, at an hourly rate of $5.00 per hour.
Defendants admit that
they did not keep records of the wages paid to plaintiff.
The parties agreed to a settlement amount of
$117,500.00 (Letter of Justin Cilenti, Esq., to the undersigned,
dated Oct. 10, 2017
(D.I. 34) ("Cilenti Letter"), Ex. 1).
parties also agree that, pursuant to the plaintiffs' retainer
agreement, plaintiff's counsel will retain $39,162.75, of the
settlement agreement for attorney's fees
(Cilenti Letter, Ex. 1).
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,
Case 1:16-cv-02304-HBP Document 36 Filed 11/13/17 Page 4 of 10
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)
(alterations in original).
"Generally, there is a strong presumption in favor of finding a
[because] the Court is generally not in as good
a position as the parties to determine the reasonableness of an
Lliquichuzhca v. Cinema 60, LLC, 948 F. Supp.
2d 362, 365 (S.D.N.Y. 2013)
tion marks omitted).
In Wolinsky v. Scholastic Inc., 900 F.
Supp. 2d 332, 335 (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 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
bargaining between experienced counsel; and (5) the
possibility of fraud or collusion.
(internal quotation marks omitted).
fies these criteria.
The settlement here satis-
Case 1:16-cv-02304-HBP Document 36 Filed 11/13/17 Page 5 of 10
First, under the agreement, plaintiff will recover
approximately 66.7% of the total amount of his allegedly unpaid
wages and overtime pay, exclusive of liquidated damages, interest
Defendants argue that plaintiff is not
and misappropriated tips.
entitled to overtime pay because he did not work in excess of 40
hours per week, and that plaintiff was lawfully compensated at
the tip credit minimum hourly rate of $5.00 per hour because he
was subject to the tip credit minimum wage.
As discussed in more
detail below, given the risks these issues present, plaintiff's
settlement amount is reasonable.
Second, the settlement will entirely avoid the expense
and aggravation of litigating this action.
One of the critical
issues in dispute is whether plaintiff worked more than 40 hours
per week and, thus, whether he is entitled to overtime pay.
Given the lack of documentary evidence supporting either party's
position, both parties will likely need to conduct depositions to
further explore this issue.
The settlement obviates the neces-
sity and expense of conducting these depositions.
Third, the settlement will enable plaintiff to avoid
the risks of litigation.
Plaintiff will have to establish that
defendants failed to compensate him and that he is entitled to
the overtime pay.
Given the lack of documentary evidence and the
fact that plaintiff bears the burden of proof, it is uncertain
Case 1:16-cv-02304-HBP Document 36 Filed 11/13/17 Page 6 of 10
whether, or how much, plaintiff would recover at trial.
Bodon v. Domino's Pizza, LLC, NO. 09-CV-2941 (SLT) 2015 WL 588656
at *6 (E. D. N. Y. Jan. 16, 2015)
( 11 [T] he
question [in assessing the fairness of a class action settlement]
is not whether the settlement represents the highest recovery
but whether it represents a reasonable one in
light of the uncertainties the class faces .
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. 11-cv-05669 (BMC), 2012 WL
5874655 at *5 (E.D.N.Y. Nov. 20, 2012)
( 11 [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
(internal quotation marks omitted)).
Fourth, because I presided over the settlement conference, I know that the settlement is the product of arm's-length
bargaining between experienced counsel.
Both counsel represented
their clients zealously at the settlement conferences.
Fifth, there are no factors here that suggest the
existence of fraud.
The essential terms of the settlement were
reached during a settlement conference before the Court.
fact further negates the possibility of fraud or collusion.
Case 1:16-cv-02304-HBP Document 36 Filed 11/13/17 Page 7 of 10
The proposed agreement also contains a release in favor
of defendants limited to claims plaintiff might have relating to
wage and hour issues.
The provision states, in pertinent part,
voluntarily releases and forever discharges defendants
and their predecessors, successors, heirs,
any and all actions, causes of action,
known or unknown, which Plaintiff ever had or no[w] has
as against the Defendants from the beginning of time
until the date of execution of this Agreement related
(i) All claims brought in the Lawsuit; (ii) All
claims for overtime, minimum wage, unpaid tips and any
other claims for wages pursuant to the [FLSA] and/or
[the NYLL]; (iii) All claims related to retaliation
contrary to the anti-retaliation provisions of the
[FLSA] and/or the [NYLL]; (iv) All claims related to
record keeping, liquidated damages interest and/or
attorneys fees, or other claims pursuant to the [FLSA]
and/or [the NYLL]; and (v) All correlative common law
claims associated with nonpayment or underpayment of
(Cilenti Letter, Ex. 1
Although the release is unlimited
in duration and contains both known and unknown claims, it is
permissible because it is limited to claims relating to wage and
See g.g., Yunda v. SAFI-G, Inc., 15 Civ. 8861
(HBP), 2017 WL 1608898 at *3 (S.D.N.Y. April 28, 2017)
M.J.); Santos v. Yellowstone Props., Inc., 15 Civ. 3986 (PAE),
2016 WL 2757427 at *l, *3 (S.D.N.Y. May 10, 2016)
(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
Case 1:16-cv-02304-HBP Document 36 Filed 11/13/17 Page 8 of 10
(S.D.N.Y. Mar. 24, 2016)
(approving release that
included both known and unknown 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 were not similarly
limited); cf. Alvarez v. Michael Anthony George Constr. Corp.,
No. 11 CV 1012 (DRH) (AKT), 2015 WL 10353124 at *1 (E.D.N.Y. Aug.
(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
Finally, the settlement agreement provides that
$39,162.75 of the settlement fund will be paid to plaintiff's
This constitutes slightly less than one-third of the
total settlement amount.
Contingency fees of one-third in FLSA
cases are routinely approved in this Circuit.
Tepeyac Butcher Shop Inc., 15 Civ. 814
*3 (S.D.N.Y. Dec. 15, 2015)
Santos v. EL
(RA), 2015 WL 9077172 at
("[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
(PAE), 2015 WL 5122530 at *4
(S.D.N.Y. Aug. 31,
Case 1:16-cv-02304-HBP Document 36 Filed 11/13/17 Page 9 of 10
(Engelmayer, D.J.) and Thornhill v. CVS Pharm., Inc., 13
(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. Sep. 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
fee that is one-third of the fund is typical" in FLSA cases);
accord Calle v. Elite Specialty Coatings Plus, Inc., No. 13-CV6126 (NGG) (VMS), 2014 WL 6621081 at *3 (E.D.N.Y. Nov. 21, 2014);
Palacio v. E*TRADE Fin. Corp., 10 Civ. 4030 (LAP) (DCF), 2012 WL
2384419 at *6-*7 (S.D.N.Y. June 22, 2012)
Accordingly, for all the foregoing reasons, I approve
the settlement in this matter.
In light of the settlement, the
action is dismissed with prejudice and without costs.
is respectfully requested to mark this matter closed.
New York, New York
November 13, 2017
/ / '-
United States Magistrate Judge
Case 1:16-cv-02304-HBP Document 36 Filed 11/13/17 Page 10 of 10
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