Linares v. Cosan Construction Corp. et al

Filing 35

OPINION & ORDER For the reasons stated above, I conclude that the proposed Amended Settlement Agreement is fair and reasonable. Accordingly, the Amended Settlement Agreement is APPROVED. Within seven days of Defendants making full payment of the Settlement Amount and upon both checks clearing, Plaintiff shall file the proposed stipulation of dismissal with prejudice in accordance with Fed. R. Civ. P. 41(a)(1)(A)(ii). SO ORDERED. (Signed by Judge Vernon S. Broderick on 6/3/2024) (jca)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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:
JOSE LINARES,
:
:
Plaintiff,
:
:
-against:
:
COSAN CONSTRUCTION CORP., COSAN
:
NEW YORK INC., and TERENCE
:
FERGUSON,
:
:
Defendants.
:
:
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22-CV-6267 (VSB)
OPINION & ORDER

Jacob Aronauer
The Law Offices of Jacob Aronauer
New York, New York
Counsel for Plaintiff
Brian L. Gardner
Jason Robert Finkelstein
Cole Schotz P.C.
New York, New York
Counsel for Defendants
VERNON S. BRODERICK, United States District Judge:
On January 11, 2023, after it was reported that the parties had reached a settlement
agreement in this Fair Labor Standards Act (“FLSA”) case, I directed the parties to submit their
settlement agreement for approval. (Docs. 24–25.) Parties may not privately settle FLSA claims
and stipulate to the case’s dismissal pursuant to Rule 41(a) of the Federal Rules of Civil Procedure
without the approval of the district court or the Department of Labor. See Samake v. Thunder Lube,
Inc., 24 F.4th 804, 806–07 (2d Cir. 2022); Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199,
200 (2d Cir. 2015). In the absence of Department of Labor approval, the parties must demonstrate
to me that their settlement is “fair and reasonable.” Velasquez v. SAFI-G, Inc., 137 F. Supp. 3d 582,
584 (S.D.N.Y. 2015) (internal quotation marks omitted).
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On January 11, 2023, the parties filed their settlement agreement and a letter in support of
that agreement. (Doc. 26 (“Settlement Ltr.”); see also Doc. 26, Ex. A (“Settlement Agreement”)).
After reviewing those materials, I found that Plaintiff failed to (1) provide the purported document
setting forth Plaintiff’s alleged damages, and (2) provide billing records that related solely to work
done on Plaintiff’s case. In addition, I found that the Settlement Agreement’s “No Publicity” clause
impermissibly undermined the purpose of the FLSA in that it arguably prohibited “a[] FLSA
plaintiff from speaking truthfully about h[er] experiences, h[er] claims, and the resolution of h[er]
lawsuit.” See Lopez v. Poko-St. Ann L.P., 176 F. Supp. 3d 340, 345 (S.D.N.Y. 2016); see also
Baikin v. Leader Sheet Metal, Inc., 16-CV-8194, 2017 WL 1025991, at *1 (S.D.N.Y. Mar. 13,
2017) (“Courts in this District have held that while not all non-disparagement clauses are per se
objectionable, if the provision would bar plaintiffs from making any negative statement about the
defendants, it must include a carve-out for truthful statements about plaintiffs’ experience litigating
their case.” (internal quotation marks omitted)). Therefore, I held that the Settlement Agreement
was not fair and reasonable, rejected the Settlement Agreement, and ordered the parties to file either
a revised settlement agreement or a joint letter indicating the parties’ intention to abandon
settlement. (Doc. 33.)
On February 29, 2024, the parties filed an amended settlement agreement. (Doc. 34
(“Amended Settlement Agreement”).) Having reviewed the materials before me, I conclude that the
Amended Settlement Agreement is fair and reasonable. Therefore, the parties’ joint motion seeking
an order approving the Amended Settlement Agreement and entering the proposed Stipulation and
Order of Dismissal with prejudice is GRANTED.
I.

Legal Standard

To determine whether a settlement is fair and reasonable under FLSA, I “consider the
totality of circumstances, including but not limited to the following factors: (1) the plaintiff’s range
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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.” Wolinsky v. Scholastic Inc., 900 F. Supp. 2d 332, 335 (S.D.N.Y. 2012) (internal
quotation marks omitted).
“In addition, if attorneys’ fees and costs are provided for in the settlement, district courts
will also evaluate the reasonableness of the fees and costs.” Fisher v. SD Prot. Inc., 948 F.3d 593,
600 (2d Cir. 2020). In requesting attorneys’ fees and costs, “[t]he fee applicant must submit
adequate documentation supporting the [request].” Id. “A reasonable hourly rate is a rate ‘in line
with . . . prevailing rates in the community for similar services by lawyers of reasonably comparable
skill, expertise and reputation.’” McDonald ex rel Prendergast v. Pension Plan of the NYSA-ILA
Pension Tr. Fund, 450 F.3d 91, 96 (2d Cir. 2006) (quoting Blum v. Stenson, 465 U.S. 886, 895 n. 11
(1984)) (alterations omitted). A fee may not be reduced “merely because the fee would be
disproportionate to the financial interest at stake in the litigation.” Fisher, 948 F.3d at 602 (internal
quotation marks omitted).
“When a district court concludes that a proposed settlement in a FLSA case is unreasonable
in whole or in part, it cannot simply rewrite the agreement, but it must instead reject the agreement
or provide the parties an opportunity to revise it.” Id. at 597.
II.

Discussion

I have reviewed the Amended Settlement Agreement, supporting evidence, and
supplemental material in order to determine whether the terms are fair and reasonable. I find that
they are and approve the Amended Settlement Agreement.

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A.

Clarified Settlement Amounts

Plaintiff Jose Linares (“Plaintiff” or “Linares”) filed his complaint seeking to recover unpaid
overtime compensation, liquidated damages, compensatory damages for alleged wage notice and
wage statement violations, pre-judgment and post-judgment interest, and attorneys’ fees and costs
pursuant to the FLSA, New York Labor Law and New York State Wage Theft Prevention Act.
(Doc. 7 at 1–2, 5, 10.) As explained in my prior order, (Doc. 33 at 3), when seeking approval of a
FLSA settlement, the plaintiff “must supply calculation addressing all possible sources of a
plaintiff’s potential damages.” Leonardo v. Reza Fast Food, Inc., No. 20-CV-8879, 2022 WL
2440975, at *2 (S.D.N.Y. July 5, 2022). Specifically, in my prior order rejecting the Settlement
Agreement, I stated:
Plaintiff asserts that “[a] spreadsheet setting forth Plaintiff’s alleged damages
is annexed [to the Settlement Letter],” . . . and that his “best scenario is over
$15,000.00.” Plaintiff further asserts that, “[a]s reflected in the damage
calculations, Plaintiff believes he is owed approximately $2,800.00 in unpaid
overtime.” . . . However, Plaintiff failed to provide this spreadsheet. Given
that I do not have sufficient information concerning Plaintiff’s range of
possible recovery or how that recovery is broken down, I cannot evaluate the
reasonableness of the settlement amount.
(See Doc. 33 at 3.)
In the Amended Settlement Agreement, Plaintiff provides the missing spreadsheet, which
explains how the amount to be paid to Plaintiff—$6,666.67—is fair and reasonable when compared
to Plaintiff’s maximum possible recovery. (Doc. 34, Ex. B.) Based on his records, Plaintiff
estimates that if he were to prevail in this case, he would be entitled to unpaid overtime
compensation in the amount of $2,805.00. (Id.) Plaintiff estimates that he would be entitled to
$15,610.00 were he to recover fully on his claims. (Id.) Of the $10,200.00 settlement amount,
Plaintiff will receive approximately one-third of the total $10,200.00 settlement amount—
$6,666.67—as compared to the $15,610.00 that he would have possibly recovered if he were to
prevail at trial. Even excluding the attorneys’ fees and costs from the Amended Settlement
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Agreement, the Amended Settlement amount of $6,666.67 that Plaintiff will receive still represents
approximately 42.7 percent of the total possible recovery, which is well above other settlement
percentages accepted in this District. See Cronk v. Hudson Valley Roofing & Sheetmetal, Inc., 538
F. Supp. 3d 310, 322–23 (S.D.N.Y. 2021) (approving a settlement amount around 13 percent of
plaintiff’s potential recovery and collecting similar cases). In addition, nothing suggests that the
Amended Settlement Agreement is the product of anything less than arm’s-length bargaining
between experienced counsel or is tainted by fraud or collusion. I therefore conclude that the
settlement amount provided for in the Amended Settlement Agreement is fair and reasonable and in
line with the settlement amounts in other cases approving FLSA settlements in this District.
B.

Attorneys’ Fees

District courts may calculate attorneys’ fees using either the lodestar method or the
percentage of the fund method. See McDaniel v. County of Schenectady, 595 F.3d 411, 417 (2d Cir.
2010). As a general matter, the “starting point” in determining reasonable attorneys’ fees is “the
lodestar — the product of a reasonable hourly rate and the reasonable number of hours required by
the case.” Millea v. Metro-North R.R., 658 F.3d 154, 166 (2d Cir. 2011) (lodestar calculation
creates a “presumptively reasonable fee” (quoting Arbor Hill Concerned Citizens Neighborhood
Ass’n v. Cnty. of Albany & Albany Cnty. Bd. of Elections, 522 F.3d 182, 183 (2d Cir. 2008))). The
party seeking fees bears the burden of demonstrating that its requested fees are reasonable, see Blum
v. Stenson, 465 U.S. 886, 897 (1984), and must provide the court with sufficient information to
assess the fee application, see N.Y. State Ass’n for Retarded Child., Inc. v. Carey, 711 F.2d 1136,
1148 (2d Cir. 1983). “Fees of one-third in FLSA cases are routinely approved in this Circuit.” See
Manley v. Midan Rest. Inc., 14-CV-1693, 2017 WL 1155916, at *9 (S.D.N.Y. Mar. 27, 2017)
(collecting cases); see also Zorn-Hill v. A2B Taxi LLC, No. 18-CV-11165, 2020 WL 5578357, at *6
(S.D.N.Y. Sept. 17, 2020) (“[C]ourts in the Second Circuit routinely award attorney’s fees
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in FLSA settlements of one-third of the total recovery.”) Additionally, “[c]ourts regularly award
lodestar multipliers from two to six times lodestar.” Johnson v. Brennan, No. 10-CV-4712, 2011
WL 4357376, at *20 (S.D.N.Y. Sept. 16, 2011); see also Beckman v. KeyBank, N.A., 293 F.R.D.
467, 481–82 (S.D.N.Y. 2013) (finding that “the lodestar sought by Class Counsel, approximately
6.3 times, falls within the range granted by courts”).
Under the Amended Settlement Agreement, Plaintiff’s counsel will receive a total of
$3,533.33, representing approximately one-third of the total settlement amount of $10,200.00. 1
(Amended Settlement Agreement at 2; Amended Settlement Ltr. at 1.) Plaintiff’s counsel states that
its lodestar in this case is less than one, and that its legal fees amount to $3,308.05. (Amended
Settlement Ltr. at 4.) Given that courts regularly award lodestar multipliers from two to six times
lodestar, Plaintiff’s counsel’s receipt of a total of $3,533.33 is consistent with lodestar multipliers
approved by other courts. Accordingly, I conclude that the requested attorneys’ fees and costs
under the Amended Settlement Agreement to be fair and reasonable.
C.

“No Publicity” Clause

Courts in this district have repeatedly rejected non-publicity provisions in FLSA settlement
agreements. See Tarbell-Littman v. TFO USA Ltd., No. 19-CV-3063, 2019 WL 13226417, at *2
(S.D.N.Y. Nov. 8, 2019) (explaining that “[w]hile some judges in this District have approved nonpublication provisions with similar limitations,” many others have concluded that they
impermissibly undermine the FLSA’s purposes); see, e.g., Siddiky v. Union Square Hosp. Grp.,
LLC, 2017 WL 2198158, at *7 (S.D.N.Y. May 17, 2017) (rejecting mutual non-publicity clause that

In my prior order, I noted that Plaintiff’s counsel’s “time records show that the total amount that was billed for the
Linares matter was $4,465.55 . . . and include multiple entries that concern someone named Diego Orea, . . . , apparently
another client of Plaintiff’s counsel. Plaintiff’s counsel needs to show the breakdown of its legal fees and costs
associated with Linares and provide an invoice that reflects entries involving only Linares in this matter or indicate
which entries relate solely to Linares.” (See Doc. 33 at 4.) Plaintiff’s counsel has since done so. (See Doc. 34, Ex. C).

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provided that the parties “will not issue, send, or post, or cause to be issued, sent, or posted, any
press release, posting, e-mail, or other verbal or written communication to any electronic, print, or
digital media, blog, or social networking site”); see also Sanz v. Johny Utah 51 LLC, 2015 WL
1808935, at *2 (S.D.N.Y. Apr. 20, 2015) (striking confidentiality clause that prevented the plaintiffs
from disclosing the terms of the settlement, inter alia, “to the media or on social media” or by
publishing any “blog entry, tweet, or other internet or social media posting”)).
The original Settlement Agreement contained a non-mutual “No Publicity” clause that
stated: “Plaintiff’s counsel shall not specifically advertise this settlement and/or issue a press
release concerning the settlement of this Litigation. Furthermore, neither Plaintiff nor Plaintiff’s
counsel will initiate discussions about the amount of settlement to any third parties outside of
immediate family and/or their respective accountant.” (Settlement Agreement ¶ H.13.) In my
previous order, I found the “No Publicity” clause impermissibly undermined the purpose of the
FLSA in that it arguably prohibited a FLSA plaintiff from speaking truthfully about his experiences,
his claims, and the resolution of his lawsuit. (See Doc. 33 at 5). I also observed that the parties
presented no rationale for the non-publicity provision. (Id. at 6). Ultimately, I ruled that absent a
compelling justification, the “No Publicity” clause at ¶ H.13 violated the public policy animating
the FLSA and was therefore unenforceable. (Id.) Further, I stated: “[T]he parties must either (1)
strike the ‘No Publicity’ clause at ¶ H.13 from the proposed settlement, or (2) provide a compelling
justification for the provision and modify it to be mutual and to indicate it is not meant to bar
Plaintiff or Plaintiff’s counsel from truthfully speaking about their experiences litigating the case.”
(Id.)
In the Amended Settlement Agreement, the parties have elected to strike the “No Publicity”
clause. (See Doc. 34.) Accordingly, the parties have resolved this issue.

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D.

Remaining Provisions

I conclude that all other provisions of the Amended Settlement Agreement are fair and
reasonable. The Amended Settlement Agreement does not contain any bar on Plaintiffs’
employment with Defendants in the future. I find the absence of this provision fair and reasonable.
III.

Conclusion

For the reasons stated above, I conclude that the proposed Amended Settlement Agreement
is fair and reasonable. Accordingly, the Amended Settlement Agreement is APPROVED. Within
seven days of Defendants making full payment of the Settlement Amount and upon both checks
clearing, Plaintiff shall file the proposed stipulation of dismissal with prejudice in accordance with
Fed. R. Civ. P. 41(a)(1)(A)(ii).
SO ORDERED.
Dated:

June 3, 2024
New York, New York
________________________________
Vernon S. Broderick
United States District Judge

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