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Weidong Li v. Ichiban Mei Rong Li Inc.

United States District Court, N.D. New York

May 4, 2017

WEIDONG LI, on behalf of himself and others similarly situated, Plaintiff,
v.
ICHIBAN MEI RONG LI INC., d/b/a Ichiban Japanese & Chinese Restaurant,, Defendants.

          FOR PLAINTIFF: JOHN TROY & ASSOCIATES, PLLC JOHN TROY, ESQ. KIMBUM BYUN, ESQ.

          FOR DEFENDANTS: LAW OFFICE OF SCOTT G. GOLDFINGER SCOTT G. GOLDFINGER, ESQ.

          DECISION AND ORDER [1]

          DAVID E. PEEBLES CHIEF U.S. MAGISTRATE JUDGE.

         This is an action brought by plaintiff Weidong Li, a former employee of the defendants, asserting violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., and the New York Labor Law ("NYLL"). Among the matters raised in his complaint, as amended, are claims that defendants failed to pay him minimum wages and proper overtime compensation.

         As a result of mediation, the parties have entered into a tentative settlement agreement, which has been forwarded to the court for approval. Based upon review of the agreement and the parties' submissions, as well as the court's familiarity with the case, I conclude that a fairness hearing is not necessary and approval of the settlement is appropriate.

         I. BACKGROUND

         Plaintiff commenced this action on July 12, 2016, and filed an amended complaint on November 16, 2016. Dkt. Nos. 1, 12. Named as defendants in the amended, operative complaint are Ichiban Mei Rong Li Inc., the operator of Ichiban Japanese & Chinese Restaurant, located in Albany, New York, as well as Shu Jie Xiao and Mei Rong Li, who are alleged to control the daily operations of the restaurant. Dkt. No. 12 at 3-5. Plaintiff alleges that he was employed as a delivery man at the restaurant between October 15, 2014 and February 28, 2015.[2] Id. at 5; Dkt. No. 26 at 1. Plaintiff asserts a variety of claims under the FLSA and NYLL, generally arguing that defendants failed to (1) pay minimum wages, (2) pay proper overtime wages, (3) provide proper spread of hours compensation, (4) provide adequate meal periods, (5) maintain adequate payroll records, (6) provide a time of hire notice detailing rates of pay and other required information, (7) provide paystubs containing the required information, and (8) reimburse plaintiff for compensable motor vehicle expenses. See generally Dkt. No. 12. As relief, plaintiff requests an award to include (1) unpaid minimum wages; (2) unpaid overtime wages; (3) liquidated damages under the FLSA; (4) up to $5, 000 based upon the failure to provide the required time of hire notice; (5) up to $5, 000 for failure to provide proper paystubs; (6) liquidated damages under the NYLL; (7) prejudgment and post-judgment interest; and (8) costs and attorney's fees. Id.

         On February 7, 2017, the court received notification from the mediator who conducted the mandatory mediation in the case that settlement had been achieved. Dkt. No. 21. The court then directed the parties to file the proposed settlement agreement, along with letters stating their positions as to why the settlement terms are fair and reasonable. Dkt. No. 23. The court is now in receipt of those letters and the accompanying settlement agreement. Dkt. Nos. 26, 27.

         II. SETTLEMENT TERMS

         The terms of the parties' settlement are memorialized in an agreement that has been publicly filed with the court. Dkt. No. 26-1. The material terms of the settlement include payment by defendants to plaintiff in the amount of $25, 000, in periodic installments payable over 210 days, secured by a confession of judgment in the amount of $37, 500. Id. at 2-3. The agreement includes mutual release language, and provides for execution of a stipulation of voluntary discontinuance of the action, with prejudice. Id. at 4-5.

         In his submission outlining the terms of the settlement, plaintiff's counsel has advised that, of the settlement amount, a total of $1, 256.57 will be applied to cover the costs and out-of-pocket disbursements incurred by counsel in representing plaintiff.[3] Dkt. No. 26 at 3. Of the remaining sum of $23, 743.43, one-third, or $7, 914.48, will be paid to Troy Law, PLLC, the law firm representing plaintiff, and the balance of $15, 828.95 will inure to the benefit of plaintiff. Id. at 3.

         III. DISCUSSION

         Construing the relevant language of the FLSA, the Second Circuit has held that stipulated dismissals under Federal Rule of Civil Procedure 41(a)(1)(A)(ii) settling FLSA claims with prejudice require approval of either a district court or the Department of Labor to become effective. Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199, 206 (2d Cir. 2015). Requiring such approvals furthers the FLSA's manifest purpose of insuring that workers receive "'a fair day's pay for a fair day's work.'" Cheeks, 796 F.3d at 206 (quoting A.H. Phillips, Inc. v. Walling, 324 U.S. 490, 493 (1945)).

         The touchstone of the required review under Cheeks is that a settlement agreement must be fair and reasonable. Lopez v. 41-06 Bell Blvd. Bakery LLC, No. 15-CV-6953, 2016 WL 6156199, at *1 (E.D.N.Y. Oct. 3, 2016) (citing cases). Among the factors to be considered in the determining the issue of fairness are (1) the ranges of potential recovery by the plaintiff; (2) the litigation risks faced by the parties; (3) the extent to which the parties will avoid the burdens of expensive litigation; (4) whether the agreement results from good-faith, arm's-length negotiations involving experienced attorneys; and (5) whether there is any indicia of fraud or collusion. Lopez, 2016 WL 6156199, at *1 (citing Wolinsky v. Scholastic Inc., 900 F.Supp.2d 332, 335 (S.D.N.Y. 2012)). In addition, when a proposed FLSA settlement includes payment of attorney's fees, the reasonableness of the fee award must also be examined. Lopez, 2016 WL 6156199, at *2; Wolinsky, 900 F.Supp.2d at 336. When evaluating the overarching consideration of fairness, the court bears in mind that ...


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