Castillo Ortiz et al v. My Bellys Playlist LLC et al

Filing 39

OPINION AND ORDER re: 36 SETTLEMENT AGREEMENT. This matter is before me on the parties' joint application to approve their settlement (Docket Item ("D.I.") 36). Accordingly, within 30 days of the date of this Order, the parties are to provide the information sought and a revised settlement agreement that eliminates the foregoing issues, and as further set forth herein. (Signed by Magistrate Judge Henry B. Pitman on 10/16/2017) Copies Transmitted By Chambers. (ras)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

-----------------------------------x
TRANQUILINO ORTIZ, et al.,
16 Civ. 2924

(HBP)

Plaintiff,
OPINION
AND ORDER

-againstMY BELLY'S PLAYLIST LLC, et. al.,
Defendants.

-----------------------------------x
PITMAN, United States Magistrate Judge:

This matter is before me on the parties'

joint applica-

ti on to approve their settlement (Docket Item ( 11 D. I.

11

)

3 6) .

All

parties have consented to my exercising plenary jurisdiction
pursuant to 28 U.S.C. § 636(c)

(D.I. 33).

This is an action brought
dards Act

(the

11

under the Fair Labor Stan-

FLSA 11 ) , 29 U.S.C. §§ 201 et

provisions of the New York Labor Law (the

11

.§.§_g.,

NYLL 11 )

and various
by three

individuals, who were employed as delivery workers at one of
defendants' two sandwich shops/catering services.

The action was

commenced on April 20, 2016 as a collective action with respect
to the FLSA claim.

The parties reached a settlement agreement

prior to the matter being conditionally certified as a collective
action, and they now seek approval of their proposed settlement
(Letter of Gerald A. Ellis, Esq. to the undersigned, dated

December 16, 2016 (D. I. 36) ("Ellis Letter")).
approve the settlement at this time.

However,

I cannot

First, the parties have not

provided sufficient information to enable me to determine whether
the proposed settlement is fair and reasonable.

Although the

parties have indicated that plaintiffs will receive a total net
settlement of $13,400, they fail to explain how that amount will
be allocated among plaintiffs or the basis for the allocation.
This is particularly significant here because each plaintiff
claims damages in a different amount and the settlement proceeds
must be allocated in a rational manner.
Additionally, Sections 3 and 7 (a),

(b) of the proposed

settlement agreement purport to release "all claims referred to
or identified in the various correspondence, pleadings, etc. to
and between the parties' respective law firms" and "all claims
referred to or identified in the various correspondence, to and
between the parties leading up to this Agreement," respectively.
This language fails to define the claims being released in any
meaningful way.
Third, the settlement agreement has two impermissible
provisions:

(1) an understanding by the plaintiff not to partic-

ipate or assist in any other wage and hour litigation against
defendant and (2) an agreement by plaintiffs never to seek reemployment with defendant

(Ellis Letter, Ex. 1
2

§§

3, 5).

Both of these provisions conflict with the FLSA's "primary
remedial purpose:

to prevent abuses by unscrupulous employers,

and remedy the disparate bargaining power between employers and
employees."

Cheeks v. Freeport Pancake House Inc., supra, 796

F.3d at 207; see Fu v. Mee May Corp., 15 Civ. 4549
2172910 at *2

(S.D.N.Y. Mar. 31, 2017)

(HBP), 2017 WL

(Pitman, M.J.) (striking

down a similar provision prohibiting plaintiffs from assisting in
any action against defendants because it conflicted with the
"remedial purpose" of the FLSA); Baikin v. Leader Sheet Metal,
Inc., 16 Civ. 8194
2017)

(Ramos, D.J.)

(ER), 2017 WL 1025991 at *1 (S.D.N.Y. Mar. 13,
(striking down a similar provision barring

plaintiffs from ever working, or applying to work, for defendants
because it was in direct conflict with FLSA's remedial purpose).

3

Accordingly, within 30 days of the date of this Order,
the parties are to provide the information sought and a revised
settlement agreement that eliminates the foregoing issues. 1

Dated:

New York, New York
October 16, 2017
SO ORDERED

United States Magistrate Judge
Copies transmitted to:
All Counsel

1

If the proposed settlement agreement were otherwise
compliant with the law, I could simply strike the offensive
provision.
The agreement provides that "if any provision, or
portion thereof, of this Agreement is, or becomes, invalid under
any applicable statute or rule of law, it is to be deemed
stricken and the rest of this Agreement shall remain in full
force and effect" (Ellis Letter, Ex. 1 'II 15) .
4