Geskina v. Admore Air Conditioning Corp. et al

Filing 22

OPINION AND ORDER: I approve the settlement in this matter, without the confidentiality provision. In light of the settlement, the action is dismissed with prejudice and without costs. The Court shall retain jurisdiction to enforce the settlement agreement. See Hendrickson v. United States, 791 F.3d 354, 358 (2d Cir. 2015). The Clerk of the Court is respectfully requested to mark this matter closed. (Signed by Magistrate Judge Henry B. Pitman on 5/3/2017) Copies Mailed By Chambers. (ras)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

-----------------------------------x
LARISA GESKINA,
16 Civ. 3096 (HBP)
Plaintiff,
OPINION
AND ORDER

-againstADMORE AIR CONDITIONING
CORP., et al.,
Defendants.

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

This matter is before me on the parties'

joint applica-

tion to approve their settlement (Unopposed Motion for Approval
of FLSA Settlement, dated Oct. 28, 2016 (Docket Item ("D.I.")
19); Settlement Agreement, filed Mar. 31, 2017

(D.I. 21)).

All

parties have consented to my exercising plenary jurisdiction
pursuant to 28 U.S.C.

§

636(c).

The parties reached their proposed settlement before I
could schedule a settlement conference, and my knowledge of the
underlying facts and the justification for the settlement is,
therefore, limited to the complaint and counsels' representations
in their motion seeking settlement approval.
Plaintiff formerly worked for Admore Air Conditioning
Corporation ("Admore") as a bookkeeper and in general administra-

tion and seeks, by this action, to recover unpaid overtime
premium pay and spread-of-hours pay.
the Fair Labor Standards Act
~.,

The action is brought under

(the "FLSA"), 28 U.S.C. §§ 201 et

and the New York Labor Law.

She also asserts a claim based

on defendants' alleged failure to maintain certain payroll
records.
Plaintiff alleges that she was employed as a bookkeeper
of Admore from April 7, 2014 until her termination in January
2016.

Plaintiff claims that between April 2014 and May 2015, she

worked at least 572 hours of overtime without compensation.

She

claims that during that period, her annual salary was $90,000.00,
her regular hourly rate was $49.45 and her overtime rate was
$74.17.

Between June 2015 and her termination, plaintiff claims

she worked at least 308 hours of overtime without compensation.
Plaintiff claims that during this later period, her annual salary
was $95,000.00, her regular hourly rate was $52.19 and her
overtime rate was $78.29.

Exclusive of liquidated or statutory

damages, plaintiff claims that she is owed approximately
$67,000.00 in unpaid overtime.

Defendants contend that plaintiff

is exempt from federal and state overtime requirements and is
not, therefore, entitled to recover any damages for allegedly
unpaid overtime premium pay.

2

The parties have agreed to a total settlement of
$40,000.00.

The parties have also agreed that $900.00 of the

settlement figure will be allocated to reimburse plaintiffs'
counsel for their out-of-pocket costs, $13,332.00

(or approxi-

mately 34%) of the remaining $39,100.00 will be paid to plaintiffs' counsel as fees and the remaining $25,768.00 will be paid
to plaintiff.
I previously refused to approve the settlement agreement because the parties filed it on the public docket with the
total settlement amount redacted (Opinion and Order, dated Mar.
28, 2017

(D.I. 20)).

I ordered the parties either to file their

settlement agreement, unredacted, on the public docket or to file
a letter indicating their intention to abandon the settlement and
proceed with litigation.

The parties chose the former option.

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.
(S.D.N.Y. Apr.

4, 2013)

960

(HB), 2013 WL 1401887 at *1

(Baer, D.J.)

(alterations in original)

"Generally, there is a strong presumption in favor of finding a

3

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,

2d 362, 365 (S.D.N.Y. 2013)
tion marks omitted).

(Gorenstein, M.J.)

948 F. Supp.

(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.

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 respective
claims and defenses; ( 3) the seriousness of the li tigation 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.

4

The settlement here satis-

First, the settlement represents approximately 59.7% of
plaintiff's alleged unpaid overtime.

Defendants argue that

plaintiff was exempt from the overtime requirements and is,
therefore, entitled to no damages for overtime work.

As dis-

cussed in more detail below, given the risks this issue presents,
the settlement amount is reasonable.
Second, the settlement will entirely avoid the burden,
expense and aggravation of litigation.

The settlement was

reached prior to any extensive documentary discovery, depositions
and dispositive motions.

The settlement avoids the necessity of

undertaking these tasks.
Third, the settlement will enable plaintiff to avoid
the risks of litigation.

As noted above, defendants contend that

plaintiff was an exempt employee and, therefore, not entitled to
overtime.

The Secretary of Labor's regulations implementing the

FLSA state that bookkeepers generally do not qualify as exempt
employees.

Pippins v. KPMG LLP,

(S.D.N.Y. 2012)
2014) .

921 F. Supp. 2d 26,

47-48

(McMahon, D.J.), aff'd, 759 F.3d 235 (2d Cir.

However, the law is also clear that an employee's title,

by itself, is not determinative of whether he or she is exempt
from the overtime requirements; instead, the court must examine
the nature of the employee's duties.

Reiseck v. Universal

Commc'ns of Miami, Inc., 591 F.3d 101, 105 (2d Cir. 2010); Moran
5

v. GTL Constr., LLC, 06 Civ. 168
(S.D.N.Y. July 24, 2007)

(SCR), 2007 WL 2142343 at *2

(Robinson, D.J.).

Litigation would,

therefore, require testimony as to the nature of plaintiff's
duties, which would raise issues of credibility.

Thus, whether

plaintiff would recover at trial is far from certain.
v. Domino's Pizza, LLC, No. 09-CV-2941
*6 (E.D.N.Y. Jan. 16, 2015)

(Report

(SLT), 2015 WL 588656 at
Recommendation)

&

See Bodon

("[T]he

question [in assessing the fairness of a class action settlement]
is not whether the settlement represents the highest recovery
possible

but whether it represents a reasonable one in

light of the many uncertainties the class faces

" (inter-

nal 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 settle-

ment 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, counsel represents that the settlement is the
product of arm's-length bargaining between experienced counsel

6

and that counsel advocated zealously on behalf of their respective clients during negotiations.
Fifth, there are no factors that suggest the existence
of fraud or collusion.

Therefore, all the Wolinsky factors weigh

in favor of approving the settlement.
Additionally, the settlement agreement does not contain
other clauses that would warrant rejection of the settlement.
Although it still contains a confidentiality clause prohibiting
disclosure of the total settlement amount except to specified
people or authorities if required by law or court order (Settlement Agreement

~

IV), that clause is hereby stricken.

v. Nights of Cabiria, LLC,
2015)

(Kaplan, D.

J.)

96 F. Supp. 3d 170, 177

See Lopez

(S.D.N.Y.

(confidentiality provisions of proposed

settlement agreement were in "strong tension with the remedial
purposes of the FLSA") . 1

1

My striking the confidentiality clause does not void the
settlement agreement because the agreement provides that "[t]o
the extent that the basis of the Court's denial of the motion to
approve the settlement is premised upon the inclusion of the
Confidentiality Provision
., the parties agree that in that
event, that provision may be stricken without further amendment
to this agreement" (Settlement Agreement~ III(C)).
The settlement agreement also provides that "[i]n the event a portion of
this Agreement is held to be legally invalid by a competent court
of law, the invalid portion shall be stricken and all other
obligations shall remain valid and mutually binding on the
parties and not be affected thereby" (Settlement Agreement ~
VI(D)).
Therefore, the confidentiality clause can be stricken
(continued ... )
7

The settlement agreement also contains a mutual nondisparagement clause (Settlement

Agreement~

II(C)).

Because it

includes a carve-out for truthful statements, it is permissible.
Lopez v. Nights of Cabiria, LLC, supra,
n. 65; accord Weng v. T&W Rest.,
2016 WL 3566849 at *4

96 F. Supp. 3d at 180

Inc., 15 Civ. 8167

(S.D.N.Y. June 22, 2016)

Lopez v. Ploy Dee, Inc., 15 Civ.
(S.D.N.Y. Apr. 21, 2016)

647

(PAE) (BCM),

(Moses, M.J.); see

(AJN), 2016 WL 1626631 at *3

(Nathan, D.J.).

The settlement agreement also contains a mutual general
release, with a carve-out for "any workers' compensation or
workplace injury related claims"

(Settlement Agreement

~

V)

"A

general release of the kind proposed in this case, with [a]
former employee[] who ha[s] no ongoing relationship with the
employer, makes sense in order to bring complete closure."
v.

65 St. Marks Bistro, 15 Civ. 327

(S.D.N.Y. Nov.

6, 2015)

(JLC), 2015 WL 7271747 at *5

(Cott, M.J.); accord Cionca v. Interac-

tive Realty, LLC, 15 Civ. 5123
(S.D.N.Y. June 10, 2016)

(BCM), 2016 WL 3440554 at *3-*4

(Moses, M.J.); Lola v. Skadden, Arps,

Meagher, Slate & Flom LLP, 13 Civ. 5008
*2

Souza

(S.D.N.Y. Feb. 3, 2016)

(RJS), 2016 WL 922223 at

(Sullivan, D.J.).

1

Additionally,

( • • • continued)
without withholding approval of the entire settlement agreement.
See Hyun v. Ippudo USA Holdings, 14 Civ. 8706 (AJN), 2016 WL
1222347 at *3 (S.D.N.Y. Mar. 24, 2016) (Nathan, D.J.).

8

because the clause was negotiated by competent counsel for both
sides, the mutual general release is permissible in this case.
Souza v.

65 St. Marks Bistro, supra, 2015 WL 7271747 at *7;

accord Cionca v. Interactive Realty, LLC, supra, 2016 WL 3440554
at *4; Lola v. Skadden, Arps, Meagher, Slate & Flom LLP, supra,
2016 WL 922223 at *2.
Finally, the settlement also provides that, after
deduction of out-of-pocket costs, approximately 34% of the
settlement amount will be paid to plaintiff's counsel as a
contingency fee.

Contingency fees of one-third in FLSA cases are

routinely approved in this Circuit.
Shop Inc., 15 Civ. 814
15, 2015)

Santos v. EL Tepeyac Butcher

(RA), 2015 WL 9077172 at *3

(Abrams, D.J.)

(S.D.N.Y. Dec.

("[C]ourts in this District have de-

clined 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.
2015 WL 5122530 at *4

Inc., 13 Civ. 6667

(S.D.N.Y. Aug. 31, 2015)

and Thornhill v. CVS Pharm., Inc., 13 Civ. 507
1100135 at *3

(S.D.N.Y. Mar. 20, 2014)

(Engelmayer, D.J.)
(JMF), 2014 WL

(Furman, D.J.); Rangel v.

639 Grand St. Meat & Produce Corp., No. 13 CV 3234
5308277 at *l

(E.D.N.Y. Sept. 19, 2013)

(PAE),

(LB), 2013 WL

(approving attorneys'

fees of one-third of FLSA settlement amount, plus costs, pursuant
to plaintiff's retainer agreement, and noting that such a fee
9

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 (LAP) (DCF), 2012 WL 2384419 at *6-*7
Y. June 22, 2012)

(S.D.N.-

In this case, there is a

(Freeman, M.J.).

negligible difference between 33.33% of the settlement fund and
34% of the fund, and therefore the contingency fee is reasonable.
Accordingly, for all the foregoing reasons,

I approve

the settlement in this matter, without the confidentiality
provision.

In light of the settlement, the action is dismissed
The Court shall retain juris-

with prejudice and without costs.

diction to enforce the settlement agreement.
United States, 791 F.3d 354, 358

See Hendrickson v.

(2d Cir. 2015).

The Clerk of

the Court is respectfully requested to mark this matter closed.
Dated:

New York, New York
May 3, 2017
SO ORDERED

J~/~

HENR~

United States Magistrate Judge

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Copies transmitted to:
All Counsel of Record

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