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Galantowicz v. Rhino Room, Inc.

United States District Court, W.D. New York

February 13, 2014

MATTHEW GALANTOWICZ, on behalf of himself and all others similarly situated, Plaintiff,

BERKE-WEISS & PECHMAN LLP Louis Pechman, Esq, New York, New York, Attorneys for Plaintiffs.

THE KNOER GROUP, PLLC Robert E. Knoer, Esq, Buffalo, New York, Attorneys for Defendants.


WILLIAM M. SKRETNY, Chief District Judge.

1. Plaintiff commenced this collective and putative class action pursuant to the Federal Labor Standards Act ("FLSA") and New York State Labor Law seeking damages due to Defendants' alleged failure to comply with these laws. Presently before the Court is the parties' joint motion for approval of a stipulation for a binding award by Mediator Robert Weissflach settling the matter.

2. Because this case involves the assertion of FLSA claims, special consideration must be paid to any proposed settlement in order to guard against an employer's possible coercion of a waiver or settlement from employees. Voldberg v. A.D. Winston Servs., No. 11-CV-2700, 2012 WL 1415051, *1 (E.D.N.Y. Apr. 20, 2012). "[A]n employee may not waive or otherwise settle an FLSA claim for unpaid wages for less than the full statutory damages unless the settlement is supervised by the Secretary of Labor or made pursuant to a judicially supervised stipulated settlement." Wolinsky v. Scholastic Inc. , 900 F.Supp.2d 332, 335 (S.D.N.Y. 2012); see Lynn's Food Stores, Inc. v. U.S. , 679 F.2d 1350, 1352-53 (11th Cir. 1982); Martinez v. Ragtime Foods of New York, Inc., No. 11-CV-1483 , 2011 WL 5508972, *1 (E.D.N.Y. 2011).

3. This Court finds that the settlement procedures outlined in the parties' proposed stipulation are the product of arm's-length bargaining between experienced counsel, favoring the conclusion that the decision to resolve this matter without further litigation was not tainted by coercion or overreaching. See Wolinsky , 900 F.Supp.2d at 335. Further, the determination of the award by a neutral mediator subject to approval by only this Court will result in a "judicially supervised" stipulated settlement, as required. Id . This Court notes, however, that when the Mediator's award is submitted for approval, it must be accompanied by sufficient information to allow this Court to determine that it reflects a fair and reasonable compromise of disputed issues and that there is a substantial showing of the need for confidentiality that outweighs the presumption of public access that applies to FLSA settlements. See Martinez , 2011 WL 5508972 at *1; see also Mosquera v. Masada Auto Sales, Ltd., No. 09-CV-4925(NGG) , 2011 WL 282327, *1 (E.D.N.Y. Jan. 25, 2011) (collecting cases disfavoring confidentiality provisions in FLSA cases).

IT HEREBY IS ORDERED that the parties' Joint Motion for Entry of the Stipulation for a Binding Award by Mediator Robert Weissflach (Docket No. 68) is GRANTED and a copy of this decree (Docket No. 68-1) is filed herewith.



WHEREAS, Robert Weissflach, Esq. ("Weissflach") has been appointed by the Court to mediate the dispute; and

WHEREAS, a bona fide dispute exists between the parties as to the merits of the claims, and parties anticipate and wish to avoid potential extensive additional discovery and motion practice should the parties fail to reach a settlement in this matter; and

WHEREAS, the parties authorize Weissflach to make a binding Award based on submissions at the December 10, 2013 mediation and additional submissions as set forth below or as further directed by Weissflach;


1. Weissflach will make all decisions regarding resolution of all issues in the case (the "Award") and his ruling will be binding and final on all parties on all issues in the case.

2. The Award will include a Resolution Amount having high low limitation, including attorneys' fees and costs. The high will be $480, 000 and the low will be $51, 000, all-inclusive. The high low numbers are based on the last offer and demand made at the mediation session on December 10, 2013 (factoring in the withdrawals of Alex Huerta, Casey Pauline, and William Tardi). This amount shall in addition be adjusted pro rata based on proposed damages for the withdrawal or dismissal of any plaintiffs who have not submitted a verified response to interrogatories in the lawsuit within 30 days of the date of this Stipulation.

3. In the event that any plaintiff, with the exception of deceased plaintiffs James Finan and David Weaver, does not provide the required verified response to interrogatories, the parties agree to make a joint application to the Court to dismiss such plaintiff(s) from the case. As to the deceased Plaintiffs Defendant shall serve a Suggestion of Death pursuant to FRCP 25 and Plaintiffs shall respond as they deem appropriate. The mediation will only proceed when all plaintiffs in this litigation have provided verified interrogatories from the Plaintiffs or their duly appointed and substituted representatives and any remaining plaintiffs' claims have been dismissed by the Court.

4. Once the pool of continuing Plaintiffs has been finally resolved the mediation process shall proceed as follows:

a, Both parties will submit a Mediation Memorandum and exhibit book digitally to Weissflach on or before a certain date.
b. Weissflach, once in receipt of both parties' Memorandums and exhibit books will forward them to the other party.
c. Within two weeks of the date the parties receive the forwarded Mediation Memorandum and exhibit book, the parties will submit any response to the others' Mediation Memorandum in digital form, including exhibits if desired.
d. "Upon Weissflach's receipt of both parties' Responses, he will transmit the Responses to the opposing parties.
e. Each party will have one week following receipt of the Response to submit a Reply. The Reply will contain only argument and no additional exhibits.

5. As ail plaintiffs in the case are current or former employees of Buffalo Chophouse, the Award will include mutual general releases of any and all claims including but not limited to those plead in the instant action.

6. The Award for named plaintiff Matthew Galantowicz shall include any "service fee" and/or other amount Weissflach deems appropriate.

7, In the event that Matthew Galantowicz wishes to make a claim for wrongful termination or any violation of law related to his separation from employment with Defendants he will specifically make the argument and provide evidence in accordance with the Mediation submittal referenced in 4.a. above. In the event that such claim is so made Defendants shall respond as provided in 4.c above. Plaintiffs may reply to Defendants Response as set forth in 4, e. If Plaintiffs submit a Reply the Defendants may submit a Sur-Reply only on the issues of the termination within I. week after receiving Plaintiffs Reply.

8. Weissflach's fees in rendering his Award will be paid equally by both sides regardless of outcome.

9. All plaintiffs and defendants will sign a confidentiality agreement as to the terms of settlement and as to Weissflach's Award. Weissflach's Award will contain a confidentiality provision as to the Resolution Amount and shall establish liquidated damages or not as Weissflach may deem appropriate. There will be no publicity of the settlement by counsel, who will also be bound by the terms of the settlement anal confidentiality agreements.

10. This Stipulation shall be "so ordered" by the Court, and the Court shall retain jurisdiction over this matter.

11. The Award of Weissflach will be submitted to the Court for "approval" upon the recommendation and request of all parties. The Award will only become effective if approved by the Court.

12. As the case involves sharply disputed factual and legal issues, the Award of Weissflach shall be distributed on a pro-rata basis based on weeks worked and the parties agree that this is a fair and reasonable method of distribution in light of all of the circumstances.

13. The Parties agree that Defendants continue to deny any obligation to pay back wages or damages and Defendants' willingness to participate in this binding mediation is based in part on the desire to avoid additional litigation costs.

14. Defendants shall issue a W-2 or 1099 or other required form as may be appropriate to each plaintiff and to Plaintiffs' Counsel.

15. The parties agree that as Weissflach is an experienced practitioner in the area of wage and hour law, there is no need for a written Opinion on the legal and factual issues in this case, and that Weissflach's Award shall be limited to the Resolution Amount and other terms of resolution that Weissflach deems appropriate, including confidentiality.

16. Weissflach may have any ex parse contact that he deems appropriate to determine and effectuate his Award. Each party shall have the right to contact Weissflach on an ex parte basis, provided however that all evidence and argument to be considered by Weissflach shall be limited to that provided as specified in 4 above.

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