Medina v. Almar Sales Co., Inc. et al

Filing 24

OPINION AND ORDER re: #23 SETTLEMENT AGREEMENT. I approve the settlement in this matter, without the re-employment 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, and as further set forth herein. (Signed by Magistrate Judge Henry B. Pitman on 8/10/2017) Copies Transmitted By Chambers. (ras)

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IUSDCSDNY
I DOCUMENT

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

I

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MANUELA MEDINA,

~1 ELl~CTRONICALLY FILED
~1 DOC N:

H FILED: '8-ft--··--!
DATE
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Plaintiff,
16 Civ. 4107

(HBP)

-againstOPINION
AND ORDER

ALMAR SALES CO., INC., et al.,
Defendants.

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PITMAN, United States Magistrate Judge:

This matter is before me on the parties' joint applicati on to approve their settlement (Docket Item ( 11 D. I.

11

)

2 3) .

The

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

§

636(c).

Plaintiff formerly worked for defendants and seeks, by
this action, to recover allegedly unpaid overtime premium pay.
The action is brought under the Fair Labor Standards Act
11

FLSA 11 ) , 29 U.S.C.

(the

11

NYLL 11 )

§§

§§

190 et

201 et
.§.fill.

.§.fill.,

(the

and the New York Labor Law

Plaintiff also asserts claims based

on defendants' alleged failure to provide wage statements and
notices as required by the NYLL.
Plaintiff alleges that she was employed to clean
defendants' office space from 2008 to approximately May 2, 2016.
Plaintiff claims that she worked nine and one-half hours per day,

five days a week for a weekly salary of $400.00 and was not paid
any overtime premium pay.

Accordingly, she initially claimed

that she is owed $95,340.75 in unpaid overtime premium pay,
liquidated damages, statutory damages and attorneys' fees.
Defendants deny plaintiff's allegations.
that plaintiff did not work any overtime.

They contend

In support of their

argument, defendants offer records that purport to show the
number of hours plaintiff actually worked.

They also argue that

the parties had an oral agreement that plaintiff's salary covered
all hours worked.

In recognition of the potential accuracy of

defendants' records, plaintiff has reduced her demand to
$26,852.63 in unpaid overtime premium pay, liquidated damages,
statutory damages and attorneys' fees.
I held a lengthy settlement conference on December 8,
2016 that was attended by the parties and their counsel.

After a

protracted discussion of the strengths and weaknesses of the
parties' respective positions, the parties agreed to resolve the
dispute for a total settlement of $22,500.00.

The parties have

also agreed that $550.00 of the settlement amount will be allocated to reimburse plaintiff's counsel for their out-of-pocket
costs, $7,500.00

(or approximately 34%) of the remaining

$21,950.00 will be paid to plaintiff's counsel and the balance
will be paid to plaintiff.
2

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
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.

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

3

who are well suited to assess the risks of litigation and the
benefits of the proposed settlement.
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 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).

The settlement here satis-

fies these criteria.
First, after deduction of attorneys' fees and costs,
the net settlement represents approximately 54% of plaintiff's
total damages.

Given the risks of litigation, as discussed in

more detail below, the settlement amount is reasonable.
Second, the settlement will entirely avoid the burden,
expense and aggravation of litigation.
ery has taken place so far.

Only preliminary discov-

If the case were to proceed, addi-

4

tional discovery would be needed, including depositions.

Settle-

ment avoids the necessity of conducting this discovery.
Third, the settlement will enable plaintiff to avoid
the risks of litigation.

As noted above, defendants kept records

of the hours plaintiff worked.

Plaintiff, therefore, faces the

risk that a fact finder may credit defendants' documentary
evidence.
certain.

Thus, whether she would recover at trial is far from
See Bodon v. Domino's Pizza, LLC, No. 09-CV-2941

2015 WL 588656 at *6 (E.D.N.Y. Jan. 16, 2015)
dation)

(SLT),

(Report & Recommen-

( 11 [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 .

II

(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. 11cv-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 reasonable

II

(internal quotation marks

omitted; assessing fairness of class action settlement)).

5

Fourth, because I presided over the settlement conference that preceded the settlement, 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 conference.
Fifth, there are no factors here that suggest the
existence of fraud.

The settlement was reached after a mediation

before the Court, further negating the possibility of fraud or
collusion.
The settlement agreement also contains a release.

It

provides that plaintiff releases
any and all charges, complaints, claims .
. and
causes of action of any nature whatsoever, known or
unknown, asserted or un-asserted, accrued or not accrued, arising before or existing when this Agreement
is executed, which the Plaintiff may have or claim to
have against any of the Defendants and the other persons and/or entities released, but only insofar [as]
those matters relating to, or in connection with her
pay, her rates of pay, overtime, minimum wage, wage
violations, paid time off, vacation days, sick days,
tip credit violations, spread of hours, recordkeeping
violations, any type of wage and hour claims, and/or
any claims of retaliation for having brought or raised

6

any of the foregoing claims, as well as any related
attorneys' fees and/or costs incurred in the prosecution of the wage and hour claims and/or the prosecution
of the Action .
(Letter from William Cafaro, Esq., to the undersigned, dated Jan.
30, 2017

(D. I. 23)

("Cafaro Letter"), Ex. 1

§

4 (a)) . 1

Because

this release does not extend beyond wage-and-hour issues or the
claims at issue in this action, it is permissible.
Apple Sanitation, Inc., No. 13 CV 04758
5376241 at *2

(E.D.N.Y. Mar. 16, 2016)

Ocasio v. Big

(CBA) (LB), 2016 WL
(Report & Recommendation),

adopted !2y, 2016 WL 5390123 (E.D.N.Y. Sept. 26, 2016); Martinez
v. Gulluoglu LLC, 15 Civ. 2727
(S.D.N.Y. Jan. 15, 2016)

(PAE), 2016 WL 206474 at *2

(Engelmayer, D.J.).

However, the settlement agreement bars plaintiff from
ever working, or applying to work, for defendants
Ex. 1 § 6).

A provision limiting plaintiff's employment opportu-

nities is not permitted.
Civ. 8194

(Cafaro Letter,

Baikin v. Leader Sheet Metal,

(ER), 2017 WL 1025991 at *l

(Ramos, D.J.).

Inc., 16

(S.D.N.Y. Mar. 13, 2017)

Such a provision is in direct conflict with the

FLSA's "primary remedial purpose:

to prevent abuses by unscrupu-

lous employers, and remedy the disparate bargaining power between

1

The release does not include claims plaintiff "has, may
have had or may have against any of the Defendants connected to
or arising from her employment relationship with the Defendants,"
other than those claims listed above (Cafaro Letter, Ex. 1 §
4 (b)).

7

employers and employees."
Inc., 796 F.3d 199, 207
824

(2016).

Cheeks v. Freeport Pancake House,

(2d Cir. 2015), cert. denied, 136 S. Ct.

This clause, therefore, is hereby stricken. 2

Finally, the settlement agreement provides that, after
deduction of out-of-pocket costs, approximately 34% of the total
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. Inc., 13 Civ. 6667
2015 WL 5122530 at *4

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

(PAE),

(Engelmayer, D.J.)

2

My striking this language does not void the settlement
agreement because the agreement provides that
[i]f any provision of this Agreement is or may be held
by a court of competent jurisdiction to be invalid,
void, or unenforceable to any extent, the validity of
the remaining parts, terms or provision[s] of this
Agreement shall not be affected thereby, and such
illegal or invalid part, term, or provision shall be
deemed not to be part of this Agreement .
(Cafaro Letter, Ex. 1 § 11).
Therefore, the re-employment
provision can be stricken without affecting the validity of the
remaining provisions.
See Hyun v. Iopudo USA Holdings, 14 Civ.
8 7 0 6 (AJN) , 2016 WL 12 2 2 3 4 7 at * 3 ( S . D. N . Y . Mar . 2 4 , 2016)
(Nathan, D.J.).
8

and Thornhill v. CVS Pharm., Inc., 13 Civ. 507
1100135 at *3 (S.D.N.Y. Mar. 20, 2014)

(JMF), 2014 WL

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

639 Grand St. Meat & Produce Corp., No. 13 CV 3234
5308277 at *1 (E.D.N.Y. Sept. 19, 2013)

(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
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)

(Freeman, M.J.).

(S.D.N.-

In this case, there is a

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 re-employment 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.

9

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.
Dated:

New York, New York
August 10, 2017
SO ORDERED

Copies transmitted to:
All Counsel of Record

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