United States District Court, S.D. New York
LUIS BARBECHO, on behalf of himself and others similarly situated, et al., Plaintiffs,
M.A. ANGELIADES, INC., et al., Defendants.
OPINION AND ORDER
PITMAN, UNITED STATES MAGISTRATE JUDGE
a collective action brought under the Fair Labor Standards
Act (the "FLSA"), 29 U.S.C. §§ 201 et
sea., and the New York Labor Law (the
"NYLL"). Plaintiffs have also asserted a breach of
contract claim. The matter is currently before me on the
parties' application to approve the settlements agreed to
by eight of the more than 33 plaintiffs. The parties have consented
to my exercising plenary jurisdiction pursuant to 28 U.S.C.
action arises out of work performed by plaintiffs in
connection with contracts between defendants and various
public agencies, including the New York City Transit
Authority (the "NYCTA"), the New York City Housing
Authority, the New York City Department of Correction and the
New York City School Construction Authority. Plaintiffs
allege that they worked for defendants as carpenters and
laborers on these projects. The contracts required defendants
to pay plaintiffs a prevailing wage rate and required that
plaintiffs be paid at least one and one-half times their
regular rate for work in excess of forty hours per week and
for weekend work. Plaintiffs allege that they worked Monday
through Friday for forty hours and sometimes were required to
work an additional sixteen to twenty-four hours on weekends.
For the weekend work, plaintiffs claim they were paid less
than their regular hourly rate.
2009, several of the defendants were indicted for falsifying
business records and defrauding employees by underpaying them
on four NYCTA projects. Several of the defendants pleaded
guilty to some of the charges, and a restitution fund was
established to provide compensation to those workers who were
underpaid. The restitution fund, however, was limited to the
projects that were the subject of the indictment.
Additionally, in order to receive payment from the
restitution fund, a worker was required to release all claims
against the defendants. Accordingly, many of defendants'
employees did not seek payment from the fund.
concede that almost all plaintiffs are owed some wages.
However, the parties vigorously dispute how much is owed. In
support of their contention that plaintiffs' claims for
unpaid wages after 2008 are exaggerated, defendants note that
commencing in 2008, an independent monitor was installed to
oversee defendants' payroll practices and that in 2008
training sessions for defendants' employees were
conducted at which the employees were advised of their rights
under the FLSA and NYLL. Defendants also note that the NYCTA
conducted an audit to determine what was owed to employees
who worked on NYCTA projects, and that audit disclosed unpaid
wages in amounts far smaller than those claimed by
plaintiffs. As additional evidence that plaintiffs'
claims are exaggerated, defendants cite plaintiffs'
interrogatory answers which defendants argue are inconsistent
with plaintiffs' present claims. Defendants also cite
work-site access records maintained in connection with
several of the projects at issue; for security reasons,
sign-in/sign-out logs were maintained at several of the work
sites at issue. Defendants claim that these records
demonstrate that some of the plaintiffs could not have worked
all the hours that they claim.
November 10, 2015, the late Honorable Miriam Goldman
Cedarbaum, United States District Judge, granted in part and
denied in part defendants' motion for partial summary
judgment. Specifically, Judge Cedarbaum granted
defendants' motion to dismiss the NYLL claims but denied
the motion to dismiss the breach of contract
Almazo v. M.A. Angeliades, Inc., 11 Civ. 1717 (MGC),
2015 WL 6965116 (S.D.N.Y. Nov. 10, 2015) (Cedarbaum, D.J.),
reconsideration denied, 2016 WL 5719748 (S.D.N.Y.
Sept. 29, 2016) (Pitman, M.J.).
to Judge Cedarbaum's decision, I began conducting
day-long settlement conferences. Conferences were held on
January 15, 22, March 29, and May 16, 2016. The claims of 21
plaintiffs were settled at the conferences held in January
and March. After negotiations, four other plaintiffs agreed
to settle their claims either at or after the May 16
conference. Finally, in August 2016 and November 2016, the
following eight plaintiffs agreed to settle their claims:
parties have also agreed that defendants will pay an
additional 1/3 of the total settlement amount of the August
2016 agreement and an additional 1/6 of the total settlement
amount of the November 2016 agreement as attorneys' fees
preliminary review of the proposed settlements reveals that I
cannot approve them in their current form because each
contains a general release that runs only in favor of
defendants. In relevant part, the release reads as follows:
[Each plaintiff] hereby releases and forever discharges
defendants . . . from any and all actions, causes of action,
. . . claims . . . whatsoever, in law or equity, he ever had,
now has, or shall have against [the defendants] as of the
Date of this Release, on the basis of any local, state or
federal law, regulation or ordinance, New York public policy,
contract, tort, or common law, or other laws, rules,
regulations and/or guidelines, constitutions, ordinances, or
any other claim for unpaid wages or salary, back pay, fringe
benefits, liquidated damages, interest or compensation of any
kind whatsoever against [the defendants], the [plaintiff] . .
. ever had, now ha[s] or hereinafter can, shall or may have,
for, upon, or by reason of any matter, cause or thing
whatsoever from the beginning of the world to the day of the
date of this RELEASE.
(Letter from Melissa S. Chan, Esq., to the undersigned, dated
Aug. 19, 2016, Ex. 2 to Stipulation of Partial Settlement;
Letter from Melissa S. Chan, Esq., to the undersigned, dated
Dec. 1, 2016, Ex. 2 to Stipulation of Settlement).
release is not limited to wage-and-hour issues or to claims
at issue in this lawsuit; specifically, the plaintiffs would
be releasing all claims for fringe benefits, liquidated
damages, interest or compensation of any kind, no matter the
source of the claim. Numerous judges in this Circuit have
rejected general releases in FLSA settlement agreements that
are not limited to wage-and-hour issues. See
Leon-Martinez v. Central Cafe & Deli. 15 Civ. 7942
(HBP), 2016 WL 7839187 at *1 (S.D.N.Y. Dec. 19, 2016)
(Pitman, M.J.) (collecting cases); see also Boyle v.
Robert M. Spano Plumbing & Heating, Inc., 15 Civ.
2899 (KMK), 2016 WL 1688014 at *3 (S.D.N.Y. Apr. 27, 2016)
(Karas, D.J.) (approving "broad" release because it
was limited to "'conduct set forth in the Lawsuit
including, claims arising under or pursuant to the Fair Labor
Standards Act, 29 U.S.C. §[§] 201 et seq.
and New York Labor Law, and its governing regula-
tions1"). The settlement should more narrowly define
what is being released.
within 30 days of the date of this Order, the parties are to
submit either revised settlement agreements that eliminate
the foregoing issue or a memorandum of law explaining why the