Bonaventura v. Gear Fitness One NY Plaza LLC et al
Filing
96
OPINION & ORDER: Accordingly, the parties' request for approval of the Agreement is DENIED without prejudice. The parties may proceed in one of the following ways: 1. File a revised letter and signed agreement addressing the concerns e xpressed in this Order by April 26, 2021; or 2. File a joint letter by April 26, 2021 that indicates the parties' intention to abandon settlement and continue to trial, at which point the Court will set a date for a pre-trial conference. It is SO ORDERED. (Signed by Judge Edgardo Ramos on 4/12/2021) (va)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
BEN BONAVENTURA,
Plaintiff,
– against –
GEAR FITNESS ONE NY PLAZA LLC,
GEAR FITNESS HOLDINGS LLC,
RETROFITNESS, LLC, MEDISPA ONE NY
PLAZA LLC, and RICHARD SANSARICQ,
OPINION & ORDER
17 Civ. 2168 (ER)
Defendants.
RAMOS, D.J.:
Ben Bonaventura commenced this action on March 24, 2017, asserting contract-based
claims and claims for violations of the Fair Labor Standards Act (“FLSA”) and the New York
Labor Law. Doc. 1. Pending before the Court is the parties’ request for approval of their
settlement agreement (the “Agreement”) and dismissal with prejudice of the instant suit. Doc.
95.
In this Circuit, parties cannot privately settle FLSA claims with prejudice absent the
approval of the district court or the Department of Labor. Cheeks v. Freeport Pancake House,
Inc., 796 F.3d 199, 200 (2d Cir. 2015). To determine whether a proposed settlement is fair and
reasonable pursuant to Cheeks, the Court must consider the totality of circumstances, including:
(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.
Fisher v. SD Prot. Inc., 948 F.3d 593, 600 (2d Cir. 2020) (quoting Wolinsky v. Scholastic Inc.,
900 F. Supp. 2d 332, 335–36 (S.D.N.Y. 2012)). Additionally, factors that preclude approval
include the presence of an overly broad release that waives claims beyond those related to wageand-hour issues, a non-disparagement provision that prevents a plaintiff from making truthful
statements related to her wage-and-hour claims, a confidentiality clause that has the same effect,
and a provision barring a plaintiff from future employment with the defendant. See Cheeks, 796
F.3d at 206; Lopez v. Nights of Cabiria, LLC, 96 F. Supp. 3d 170, 180 & n.65 (S.D.N.Y 2015);
Zekanovic v. Augies Prime Cut of Westchester, Inc., No. 19 Civ. 8216 (KMK), 2020 WL
5894603, at *4 (S.D.N.Y. Oct. 5, 2020); Weng v. T&W Rest., Inc., No. 15 Civ. 8167 (PAE)
(BCM), 2016 WL 3566849, at *4–5 (S.D.N.Y. June 22, 2016). Currently, the Court cannot
approve the Agreement for three reasons.
First, the Agreement impermissibly bars Bonaventura from reemployment with
Defendants. Doc. 95-1 at 5. “Courts in this Circuit have consistently rejected FLSA settlements
that seek to prevent plaintiffs from having a future employment relationship with the defendant
as contrary to the underlying aims of the FLSA.” Brittle v. Metamorphosis, LLC, No. 20 Civ.
3880 (ER), 2021 WL 606244, at *3 (S.D.N.Y. Jan. 22, 2021) (quoting Zekanovic, 2020 WL
5894603, at *4). Such bars on reemployment “conflict with the FLSA’s primary remedial
purpose.” Ortiz v. My Belly’s Playlist LLC, 283 F. Supp. 3d 125, 126 (S.D.N.Y. 2017) (quoting
Cheeks, 796 F.3d at 207) (internal quotation mark omitted). Here, the Agreement provides that
Bonaventura will not apply to work for or seek any business relationship with Defendants or any
of their affiliates, parent companies, or successors. Doc. 95-1 at 5. Further, the Agreement
provides that, if Bonaventura is found to be an applicant for or employee of any of those entities,
Defendants may terminate him based solely on this provision of the Agreement. See id. Because
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these terms prevent Bonaventura from having a future employment relationship with Defendants,
they are not fair and reasonable.
Second, the Agreement contains an impermissible non-disparagement clause. Nondisparagement clauses “run afoul of the purposes of the FLSA and the public’s independent
interest in assuring that employees’ wages are fair,” Lopez, 96 F. Supp. 3d at 178 (quotation
omitted), as “they ‘prevent the spread of information about FLSA actions to other workers . . .
who [could] then use that information to vindicate their own statutory rights,’” see Weng, 2016
WL 3566849, at *4 (quoting Lopez v. Ploy Dee, Inc., No. 15 Civ. 647 (AJN), 2016 WL 1626631,
at *3 (S.D.N.Y. Apr. 21, 2016)). “While ‘not every non-disparagement clause in an FLSA
settlement is per se objectionable,’ a clause which bars a plaintiff from making negative
statements about a defendant ‘must include a carve-out for truthful statements about [a
plaintiff’s] experience in litigating [her] case.’” Id. (quoting Lopez, 96 F. Supp. 3d at 180 n.65).
Moreover, a non-disparagement clause that bars a worker from sharing any information related
to her wage-and-hour claim—regardless of whether it was discussed during her litigation
experience—likewise frustrates the remedial and information-sharing purposes of the FLSA. Cf.
Doe v. Solera Cap. LLC, No. 18 Civ. 1769 (ER), 2021 WL 568806, at *2 (S.D.N.Y. Jan. 20,
2021); Lopez, 96 F. Supp. 3d at 180.
Here, the non-disparagement clause prevents Bonaventura from publishing or
communicating to any person or entity any disparaging statements concerning Defendants. Doc.
95-1 at 5–6. “Disparaging,” according to the Agreement, includes statements in any form that
“(i) reflect adversely upon the affairs or practices of the person or entity being remarked or
commented upon or (ii) impugn the character, honesty, integrity, morality, acumen, or abilities of
the person or entity being remarked or commented upon.” See id. at 6. Of course, the
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Agreement also states that Bonaventura may make truthful statements about his “experiences in
litigating [his] claims and defenses” under the FLSA. Id. Thus, the Agreement does contain a
carve-out that allows him to make some statements related to his wage-and-hour claims. See
Weng, 2016 WL 3566849, at *4. However, the provision prevents Bonaventura from sharing
information related to his wage-and-hour claims that may not have come out during the instant
litigation. See Solera, 2021 WL 568806, at *2; see also Lopez, 96 F. Supp. 3d at 180 & n.65.
Accordingly, the non-disparagement provision bars Bonaventura from making some truthful
statements relating to his wage-and-hour claims that may be deemed critical or disparaging, and
therefore is not fair and reasonable.
Third, the Agreement lacks information necessary for the Court to complete its review
pursuant to Cheeks. In his fairness letter, Bonaventura notes that, of the $300,000 settlement
award, his counsel will receive $100,000 for attorney’s fees.1 Doc. 95 at 1. Although courts in
this District routinely approve FLSA settlement agreements where, as here, the award of
attorney’s fees represents less than or equal to one third of the settlement fund, net costs, see
Flores Hernandez v. Vill. Nat. Rest. Corp., No. 19 Civ. 8378 (ER), 2020 WL 5518314, at *1
(S.D.N.Y. Sept. 14, 2020), they must still “independently ascertain the reasonableness of” an
award of attorney’s fees, Gurung v. White Way Threading LLC, 226 F. Supp. 3d 226, 229–30
(S.D.N.Y. 2016), and doing so requires counsel to “submit evidence providing a factual basis for
the award,” Wolinsky, 900 F. Supp. 2d at 336. Bonaventura’s attorneys assert that they expended
403.1 hours on this case, and note that Bonaventura’s prior counsel worked 127.3 hours on this
matter. Doc. 95 at 4. However, Bonaventura’s attorneys fail to provide documentation to
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Neither the Agreement nor the fairness letter specifies the amount dedicated to covering litigation costs.
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support these figures and do not state the litigation costs, and they fail to specify what portion, if
any, of the $100,000 allotted for attorney’s fees will be provided to Bonaventura’s prior counsel.
Further, Bonaventura’s attorneys have not offered information to support their proposed
hourly rates, nor have they provided information regarding Bonaventura’s prior counsel’s rates.
“Even when a plaintiff has entered into a contingency-fee arrangement with his attorneys, and
‘even when the proposed fees do not exceed one third of the total settlement amount, courts in
this circuit use the lodestar method as a cross check to ensure the reasonableness of attorneys’
fees.’” Hernandez v. Boucherie LLC, No. 18 Civ. 7887 (VEC), 2019 WL 3765750, at *4
(S.D.N.Y. Aug. 8, 2019) (quoting Lazo v. Kim’s Nails at York Ave., Inc., 17 Civ. 3302 (AJN),
2019 WL 95638, at *2 (S.D.N.Y. Jan. 2, 2019)). The lodestar amount is the product of a
reasonable hourly rate and the reasonable number of hours required for the case. See Millea v.
Metro-N. R. Co., 658 F.3d 154, 166 (2d Cir. 2011). To determine the reasonableness of a
requested hourly rate, the Court considers the prevailing market rate in this District. Zhen Ming
Chen v. Y Café Ave B Inc., No. 18 Civ. 4193 (JPO), 2019 WL 2324567, at *5 (S.D.N.Y. May 30,
2019). Courts in this District have found that an hourly rate ranging from $250 to $450 is
appropriate for experienced litigators in wage-and-hour cases. See id. Although Bonaventura’s
attorneys state that their hourly rates ranged from $430 to $680, see Doc. 95 at 4, they fail to
provide information justifying rates that are at the high end of or greater than rates typically
awarded to experienced litigators in wage-and-hour cases in this District, see Zhen Ming Chen,
2019 WL 2324567, at *5. Thus, because the Agreement and the accompanying fairness letter
lack the requisite information for the Court’s review, the Court cannot determine whether the
Agreement is fair and reasonable as to the settlement award or attorney’s fees.
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Accordingly, the parties’ request for approval of the Agreement is DENIED without
prejudice. The parties may proceed in one of the following ways:
1. File a revised letter and signed agreement addressing the concerns expressed in this
Order by April 26, 2021; or
2. File a joint letter by April 26, 2021 that indicates the parties’ intention to abandon
settlement and continue to trial, at which point the Court will set a date for a pre-trial
conference.
It is SO ORDERED.
Dated:
April 12, 2021
New York, New York
EDGARDO RAMOS, U.S.D.J.
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