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Geskina v. Admore Air Conditioning Corp.

United States District Court, S.D. New York

May 3, 2017

LARISA GESKINA, Plaintiff,
v.
ADMORE AIR CONDITIONING CORP., et al., Defendants.

          OPINION AND ORDER

          HENRY PITMAN UNITED STATES MAGISTRATE JUDGE.

         This matter is before me on the parties' joint application to approve their settlement (Unopposed Motion for Approval of FLSA Settlement, dated Oct. 28, 2016 (Docket Item ("D.I.") 19); Settlement Agreement, filed Mar. 31, 2017 (D.I. 21)). All parties have consented to my exercising plenary jurisdiction pursuant to 28 U.S.C. § 636(c).

         The parties reached their proposed settlement before I could schedule a settlement conference, and my knowledge of the underlying facts and the justification for the settlement is, therefore, limited to the complaint and counsels' representations in their motion seeking settlement approval.

         Plaintiff formerly worked for Admore Air Conditioning Corporation ("Admore") as a bookkeeper and in general administration and seeks, by this action, to recover unpaid overtime premium pay and spread-of-hours pay. The action is brought under the Fair Labor Standards Act (the "FLSA"), 28 U.S.C. §§ 201 et seq., and the New York Labor Law. She also asserts a claim based on defendants' alleged failure to maintain certain payroll records.

         Plaintiff alleges that she was employed as a bookkeeper of Admore from April 7, 2014 until her termination in January 2016. Plaintiff claims that between April 2014 and May 2015, she worked at least 572 hours of overtime without compensation. She claims that during that period, her annual salary was $90, 000.00, her regular hourly rate was $49.45 and her overtime rate was $74.17. Between June 2015 and her termination, plaintiff claims she worked at least 308 hours of overtime without compensation. Plaintiff claims that during this later period, her annual salary was $95, 000.00, her regular hourly rate was $52.19 and her overtime rate was $78.29. Exclusive of liquidated or statutory damages, plaintiff claims that she is owed approximately $67, 000.00 in unpaid overtime. Defendants contend that plaintiff is exempt from federal and state overtime requirements and is not, therefore, entitled to recover any damages for allegedly unpaid overtime premium pay.

         The parties have agreed to a total settlement of $40, 000.00. The parties have also agreed that $900.00 of the settlement figure will be allocated to reimburse plaintiffs' counsel for their out-of-pocket costs, $13, 332.00 (or approximately 34%) of the remaining $39, 100.00 will be paid to plaintiffs' counsel as fees and the remaining $25, 768.00 will be paid to plaintiff.

         I previously refused to approve the settlement agreement because the parties filed it on the public docket with the total settlement amount redacted (Opinion and Order, dated Mar. 28, 2017 (D.I. 20)). I ordered the parties either to file their settlement agreement, unredacted, on the public docket or to file a letter indicating their intention to abandon the settlement and proceed with litigation. The parties chose the former option.

Court approval of an FLSA settlement is appropriate "when [the settlement] [is] reached as a result of contested litigation to resolve bona fide disputes." Johnson v. Brennan, No. 10 Civ. 4712, 2011 WL 4357376, at *12 (S.D.N.Y. Sept. 16, 2011). "If the proposed settlement reflects a reasonable compromise over contested issues, the court should approve the settlement." Id. (citing Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350, 1353 n.8 (11th Cir. 1982)).

Aqudelo v. E & D LLC, 12 Civ. 960 (HB), 2013 WL 1401887 at *1 (S.D.N.Y. Apr. 4, 2013) (Baer, D.J.) (alterations in original). "Generally, there is a strong presumption in favor of finding a settlement fair, [because] the Court is generally not in as good a position as the parties to determine the reasonableness of an FLSA settlement." Lliguichuzhca v. Cinema 60, LLC, 948 F.Supp.2d 362, 365 (S.D.N.Y. 2013) (Gorenstein, M.J.) (internal quotation marks omitted). "Typically, courts regard the adversarial nature of a litigated FLSA case to be an adequate indicator of the fairness of the settlement." Beckman v. KeyBank, N.A., 293 F.R.D. 467, 476 (S.D.N.Y. 2013) (Ellis, M.J.), citing Lynn's Food Stores, Inc. v. United States, supra, 679 F.2d at 1353-54.

         In Wolinsky v. Scholastic Inc., 900 F.Supp.2d 332, 335 (S.D.N.Y. 2012), the Honorable Jesse M. Furman, United States District Judge, identified five factors that are relevant to an assessment of the fairness of an FLSA settlement:

In determining whether [a] proposed [FLSA] settlement is fair and reasonable, a court should consider the totality of circumstances, including but not limited to the following factors: (1) the plaintiff's range 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.

(Internal quotation marks omitted). The settlement here satisfies these criteria.

         First, the settlement represents approximately 59.7% of plaintiff's alleged unpaid overtime. Defendants argue that plaintiff was exempt from the overtime requirements and is, therefore, entitled to no damages for overtime work. As discussed in more detail below, given the risks this issue presents, the settlement amount is reasonable.

         Second, the settlement will entirely avoid the burden, expense and aggravation of litigation. The settlement was reached prior to any extensive documentary discovery, depositions and dispositive motions. ...


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