United States District Court, S.D. New York
Justin Cilenti, Peter H. Cooper, CILENTI & COOPER, PLLC, Attorneys for Plaintiff.
Carolyn D. Richmond, Glenn S. Grindlinger, James M. Lemonedes, FOX ROTHSCHILD, LLP, Attorneys for Defendants.
LEWIS A. KAPLAN, District Judge.
Plaintiff Raul Camacho was employed as a "baker, porter/cleaner, and occasional delivery person" at Ess-A-Bagel, a kosher delicatessen and bakery, from approximately March 2007 until March 2014. He brings this suit to enforce his alleged rights under the Fair Labor Standards Act ("FLSA") and the New York Labor Law ("NYLL"). Camacho claims principally that defendants failed to pay his requisite minimum and overtime wages and that he did not receive "spread of hours" pay as required by the NYLL.
Camacho and his attorneys submitted for court approval a proposed settlement. District courts must evaluate whether a proposed FLSA settlement is "fair and reasonable" and whether any concomitant award of attorneys' fees is reasonable. The Court denied the request for settlement approval without prejudice to the filing of a new and complete motion for approval. The Court identified five deficiencies in the original submission:
1. It did not "provide the Court with each party's estimate of the number of hours worked or the applicable wage." The Court therefore had no sense of "how plaintiff's counsel arrived at the maximum recovery figure of $53, 000, nor to what extent resolution of the tip credit' issue in defendants' favor would decrease that figure."
2. The parties' submission lacked "any declarations, affidavits or exhibits substantiating its arguments."
3. The text of the proposed settlement agreement (the "Proposed Agreement") contained a confidentiality requirement. This section would have barred Camacho from discussing the settlement with anyone except "his immediate family members, financial advisors and attorneys." The Court concluded that "FLSA settlements are judicial documents to which the public's right of access attaches, " and concluded further that "any countervailing privacy interests often will be outweighed by the public's interest in ensuring that workers receive [a] fair day's pay for a fair day's work.'"
4. The language of the Proposed Agreement's general releases was "far too sweeping to be fair and reasonable.'" They would have gone "far beyond terminating the present litigation, " and purported to waive "practically any possible claim against the defendants, including unknown claims and claims that have no relationship whatsoever to wage-and-hour issues."
5. The request for attorneys' fees was unaccompanied by any "contemporaneous billing records documenting, for each attorney, the date, the hours expended, and the nature of the work done."
The parties now have submitted an updated proposed settlement agreement and posted it on the public docket. This new submission diligently responds to the Court's concerns. One aspect of the revised agreement, however, is problematic. Paragraph 14A states:
"The parties agree that if specifically asked about the status of the Pending Action or this Agreement generally, Plaintiff and Defendants agree that they or it will respond solely by stating that The Parties' dispute has been amicably resolved.'"
In other words, while the revised agreement itself now would be publicly available on the Court's docket, the agreement imposes an obligation on the plaintiff - a gag order, really - to refrain from discussing any aspect of the case or the settlement. This provision, like the confidentiality provision now excised from the proposed settlement, runs afoul of the purposes of the FLSA and the "public's independent interest in assuring that employees' wages are fair."
The Court's obligation to police FLSA settlements to ensure that they are fair and reasonable is a searching one. It implicates both the rights of the settling employee and the interests ...