Sanchez Montenegro et al v. NMN Food LLC et al
Filing
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MEMORANDUM OPINION AND ORDER: For the reasons stated above, the Court approves the proposed settlement agreement. Plaintiffs counsel will receive $6,666.67 of the settlement amount and the remaining $13,666.67 will go to Plaintiff in ac cordance with the payment schedule set out in the Settlement Agreement. The Clerk of Court is respectfully directed to terminate Defendants NMN Food LLC d/b/a Hummus Kitchen and Sharon Hoota from the caption in this case. The remaining Defendants-C ohen, Odet Doe, and Ashley Doe-were served with a Summons and the Complaint, see Dkts. 16, 17, 19, but have not appeared nor responded to the Complaint, and their time to do so has passed. No later than December 21, 2018, Plaintiff shall notify the Court whether and how he intends to proceed with this case as against Defendants Cohen, Odet Doe, and Ashley Doe. If Plaintiff does not comply this deadline, the Court may dismiss the remainder of this action pursuant to Fed. R. Civ. P. 41(b). SO ORDERED. (Sharon Hoota and NMN Food LLC terminated.) (Signed by Judge Ronnie Abrams on 12/18/2018) (rro)
USDC-SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC#:
DATE FILED:
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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
I;-/ I
tr~
NEIL SANCHEZ MONTENEGRO,
individually and on behalfof others similarly
situated,
Plaintiff,
v.
No. 18-CV-3153 (RA)
MEMORANDUM OPINION AND ORDER
NMN FOOD LLC d/b/a HUMMUS
KITCHEN, SHARON HOOT A, PFER
COHEN, ODET DOE and ASHLEY DOE,
Defendants.
RONNIE ABRAMS, United States District Judge:
Plaintiff Neil Sanchez Montenegro brought this action against Defendant NMN Food LLC,
a Mediterranean Restaurant doing business under the name "Hummus Kitchen," and its alleged
owners, managers, principals or agents-Defendants Sharon Hoota, Pfer Cohen, Odet Doe, and
Ashley Doe, see Compl.
,r,r 2-3
(Dkt. 1)-for alleged violations of the Fair Labor Standards Act
("FLSA") and New York Labor Law ("NYLL"). Now before the Court is an application for
approval of a settlement agreement as between Plaintiff Montenegro and Defendants NMN Food
LLC and Sharon Hoota ("Defendants"). 1 For the reasons set forth below, the Court grants the
application.
Plaintiffs Complaint names four individual Defendants: Sharon Hoota, Pfer Cohen, Odet
Doe, and Ashley Doe. See Compl. Sharon Hoota is the only individual Defendant that is named
as a party to the Settlement Agreement, however. See Settlement Agreement and Release (Dkt.
20-1 ). The joint stipulation of dismissal with prejudice attached to the Settlement Agreement
names Hoota and Cohen as individual Defendants, omitting Odet Doe and Ashley Doe from the
caption, but is signed by Hoota, only. See Settlement Agreement and Release, Exs. A-B.
1
The Court addresses four aspects of the proposed settlement agreement: (1) the settlement
amount, (2) attorneys' costs and fees, (3) the release provision, and (4) the non-disparagement
provision. The Court finds that each of these, and the settlement as a whole, is fair and reasonable.
A. Settlement Amount
Under the proposed settlement agreement, Defendants agree to pay Plaintiff a total of
$20,000.00.
See Settlement Agreement and Release
,r 1.
Of the total $20,000, one-third
($6,666.66) represents payment for any and all unpaid minimum wage and other wages under the
FLSA and NYLL; another third ($6,666.67) represents payment for alleged liquidated damages
and penalties under the FLSA and NYLL; and the final third ($6,666.67) represents payment for
Plaintiffs' attorneys' fees and costs in connection with this matter. See id. Plaintiff will receive
his share of the settlement total (i.e., $13,333.33) in fourteen monthly installments. Id. Plaintiff
estimates that, if he were to prevail on all claims, "he would be entitled to approximately
$47,135.04, which represents calculated actual damages, penalties, and interest, but excludes
attorneys' fees and costs." Fairness Letter at 2 (Dkt. 20). Thus, the settlement amount here,
exclusive of attorneys' fees and costs-$13,333-represents approximately 28% of Plaintiffs
total conceivable damages recovery of $47,135.04. This amount is fair "in light of the legal and
evidentiary challenges that would face the plaintiffl:] in the absence of a settlement." Lopez v.
Poko-St. Ann L.P., 176 F. Supp. 3d 340, 342 (S.D.N.Y. 2016); see also Beckert v. Ronirubinov,
No. 15 Civ. 1951 (PAE), 2015 WL 8773460, at *2 (S.D.N.Y. Dec. 14, 2015) (approving a
settlement of approximately 25 percent of the maximum possible recovery). The Court thus finds
that the parties' proposed settlement amount is fair and reasonable.
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B. Attorneys' Fees and Costs
The Court approves the requested award of attorneys' fees and costs. "In an FLSA case,
the Court must independently ascertain the reasonableness of the fee request." Gurung, 226 F.
Supp. 3d at 229-30. A contingency fee award is presumptively valid where "the proposed fee
amount is exactly one-third of the net settlement amount, which is an amount routinely approved
under the percentage method" in this District, "particularly where it is pursuant to a previously
negotiated retainer agreement." Yunjian Lin v. Grand Sichuan 74 St Inc., No. 15-CV-2950(RA),
2018 WL 3222519, at *5 (S.D.N.Y. July 2, 2018). The proposed settlement total of $20,000
allocates $6,666.67 in fees to Plaintiffs counsel, which amounts to 33% of the settlement amount.
Plaintiffs counsel is also requesting less than what they claim they are entitled to under their
retainer agreement. Fairness Letter at 3 (noting that Plaintiffs retainer agreements provide that
Plaintiffs counsel is to receive 40% of the recovery it obtains). The Court thus approves the
proposed attorneys' fees under the percentage of the fund method.
C. Release
Plaintiffs release of claims is also reasonable. "In FLSA cases, courts in this District
routinely reject release provisions that 'waive practically any possible claim against the
defendants, including unknown claims and claims that have no relationship whatsoever to wageand-hour issues."' Gurung v. White Way Threading LLC, 226 F. Supp. 3d 226, 228 (S.D.N.Y.
2016) (quoting Lopez v. Nights ofCabiria, LLC, 96 F. Supp. 3d 170, 181 (S.D.N.Y. 2015)).
Here, Plaintiffs releases are all tied to his claims in this case or to wage-and-hour issues:
he agrees to waive "any and all claims related to [his] wages or compensation that [he] may have
against Defendants," and releases all claims "relating specifically to the claims in the Litigation
that have occurred as of the Effective Date of th[e] Agreement." Settlement Agreement and
3
Release ,, 3, 5. This release is sufficiently narrow to survive judicial scrutiny, especially given
that it appears to have been the "fair result of a balanced negotiation, in which Plaintiftl] w[as]
represented by able counsel." See Candido v. Prosperty 89 Corp., No. 17-CV-3310(RA), 2018
WL 4778918, at *2 (S.D.N.Y. Oct. 3, 2018) (noting that there is "nothing inherently unfair about
a release of claims in an FLSA settlement" in such situations).
The Court therefore finds that the
release in the proposed settlement agreement is fair and reasonable.
D. Non-Disparagement Clause
The settlement agreement here contains a non-disparagement clause. See Settlement
Agreement and Release, 12 (providing that Plaintiff "agrees that he will not make, or cause to be
made, any derogatory, disparaging, defamatory or untruthful statements about the Defendants,
their family members, or any of the Releases ... to any other person ...."). Confidentiality and
non-disparagement clauses are deemed unreasonable under the FLSA when they "inhibit[] one of
the FLSA's primary goals-to ensure 'that all workers are aware of their rights."' Nights of
Cabiria, 96 F. Supp. 3d at 180. "[N]ot every non-disparagement clause in an FLSA settlement is
per se objectionable," however, because "plaintiffs may contract away their right to say things that
are insulting or calumnious about the defendants." Id. at 180 n.65 (emphasis in original). Thus,
so long as non-disparagement clauses contain "a carve-out for truthful statements about plaintiffs'
experience litigating their case," they may be fair and reasonable. Id.; see also Santos v. El
Tepeyac Butcher Shop Inc., No. 15-CV-814 (RA), 2015 WL 9077172, at *1 (S.D.N.Y. Dec. 15,
2015). The non-disparagement clause here includes such a carve-out. See Settlement Agreement
and Release 1 12 (providing that Plaintiff is not prohibited "from making truthful statements about
[its] experiences litigating this case"). The Court therefore concludes that it is fair and reasonable
in the context of this settlement.
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CONCLUSION
For the reasons stated above, the Court approves the proposed settlement agreement.
Plaintiffs counsel will receive $6,666.67 of the settlement amount and the remaining $13,666.67
will go to Plaintiff in accordance with the payment schedule set out in the Settlement Agreement.
The Clerk of Court is respectfully directed to terminate Defendants NMN Food LLC d/b/a
Hummus Kitchen and Sharon Hoota from the caption in this case.
The remaining Defendants-Cohen, Odet Doe, and Ashley Doe-were served with a
Summons and the Complaint, see Dkts. 16, 17, 19, but have not appeared nor responded to the
Complaint, and their time to do so has passed. No later than December 21, 2018, Plaintiff shall
notify the Court whether and how he intends to proceed with this case as against Defendants
Cohen, Odet Doe, and Ashley Doe. If Plaintiff does not comply this deadline, the Court may
dismiss the remainder of this action pursuant to Fed. R. Civ. P. 41(b).
SO ORDERED.
Dated:
December 18, 2018
New York, New York
R
rams
United States District Judge
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