United States District Court, S.D. New York
GERMAN LARREA, individually and on behalf of others similarly situated, Plaintiff,
FPC COFFEES REALTY CO., INC. doing business as CAFFE REGGIO, FABRIZIO PRIM CAVALLACCI and ELENA A. BATYUK, Defendants.
OPINION AND ORDER
ABRAMS, United States District Judge
German Larrea and Segundo Bermejo bring this action against
Defendants FPC Coffees Realty Co., Fabrizio Prim Cavallacci,
and Elena Batyuk for alleged violations of the Fair Labor
Standards Act ("FLSA") and the New York Labor Law
("NYLL"). Before the Court is the parties'
application for approval of a settlement agreement. For the
reasons set forth below, the Court declines to approve the
proposed settlement agreement at this time.
approximately October 1994 to December 2014, Larrea worked as
a cook at Caffe Reggio, an Italian restaurant owned by
Cavallacci and Batyuk. See Compl. ¶¶2, 15
(Dkt. 1). Larrea alleges that he regularly worked more than
forty hours per week without receiving minimum wage or
overtime compensation. See Id. ¶ 9.
March 2, 2015, Larrea initiated this action on behalf of
himself and all others similarly situated. Larrea asserted
six claims for violations of the FLSA and the NYLL. See
Id. ¶¶ 69-90. Two months after notifying the
Court that they had reached a settlement, see Dkt.
33, the parties submitted a settlement agreement and a letter
setting forth their views on why the agreement is fair and
reasonable, see Dkt. 37. The Court ordered
Plaintiffs to submit contemporaneous billing records
documenting the hours worked by each of their attorneys,
see Dkt. 38, which Plaintiffs filed shortly
thereafter, attaching billing records for one of the
attorneys identified in their application, see Dkt.
promote FLSA's purpose of ensuring 'a fair day's
pay for a fair day's work, ' a settlement in a FLSA
case must be approved by a court or the Department of
Labor." Hyun v. Ippudo USA Holdings, No.
14-CV-8706 (AJN), 2016 WL 1222347, at *1 (S.D.N.Y. Mar. 24,
2016) (quoting Cheeks v. Freeport Pancake House,
Inc., 796 F.3d 199, 206 (2d Cir. 2015)). To obtain
approval, the parties must demonstrate that their agreement
is "fair and reasonable." Beckert v.
Ronirubinov, No. 15-CV-1951 (PAE), 2015 WL 8773460, at
*1 (S.D.N.Y. Dec. 14, 2015) (citation omitted). "A fair
settlement must reflect a reasonable compromise of disputed
issues rather than a mere waiver of statutory rights brought
about by an employer's overreaching." Chauca v.
Abitino 's Pizza 49th St. Corp., No. 15-CV-06278
(BCM), 2016 WL 3647603, at *1 (S.D.N.Y. June 29, 2016)
(quoting Mamani v. Licetti, No. 13-CV-7002 (KMW),
2014 WL 2971050, at *1 (S.D.N.Y. July 2, 2014))). "In
determining whether the proposed settlement is fair and
reasonable, a court should consider the totality of
circumstances, including but not limited to the following
factors: (1) the plaintiffs 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." Wolinsky v.
Scholastic Inc., 900 F.Supp.2d 332, 335 (S.D.N.Y. 2012)
(internal quotation marks omitted).
Court addresses five aspects of the proposed settlement
agreement: (1) the settlement amount, (2) the release
provision, (3) the confidentiality provision, (4) the
non-disparagement provision, and (5) the attorneys' fees
provision. While the Court finds that the proposed settlement
amount is fair and reasonable, the proposed agreement must be
rejected on the basis of the remaining four aspects discussed
A. Settlement Amount
the proposed settlement agreement, Defendants agree to pay
Plaintiffs a total of $130, 000 in three installments.
See Fairness Letterat 2 (Dkt. 37). Plaintiffs
estimate that they are entitled to a maximum recovery of
$300, 000 in back wages, including cumulative or
"stacked" awards of liquidated damages under the
FLS A and the NYLL. See Id. Excluding one of the two
of liquidated damages awards, Plaintiffs represent that their
maximum recovery would be $212, 000. See Id. The
proposed settlement amount thus represents approximately 43
percent of Plaintiffs' anticipated maximum recovery
including cumulative liquidated damages, or 61 percent of
Plaintiffs' maximum recovery excluding one award of
the circumstances of this case, this amount is fair and
reasonable. While it falls short of the maximum amount
Plaintiffs assert they might have recovered at trial, this
amount is significant "in light of the legal and
evidentiary challenges that would face the plaintiffs in the
absence of a settlement." Lopez v. Poko-St. Ann
L.P., 176 F.Supp.3d 340, 342 (S.D.N.Y.2016). In
particular, the parties represent that this litigation
involved "sharply contested factual and legal disputes
that went to the heart of Plaintiffs' claims, "
including a dispute regarding the dates on which Plaintiffs
worked at Caffe Reggio. In addition, because Defendants
produced employment records to support their position, it
would likely be more difficult for Plaintiffs to establish
liability solely on the basis of their testimony, as
plaintiffs in some wage-and-hour cases are able to do.
See Anderson v. Mt. Clemens Pottery Co., 328 U.S.
680, 687-88 (1946); Kuebel v. Black & Decker
Inc., 643 F.3d 352, 364 (2d Cir. 2011). Finally,
Plaintiffs' ability to collect on any judgment in this
case would be complicated by the fact that Caffe Reggio's
owner does not live in the United States. See, e.g.,
Howard v. Don Coleman Advert. Inc., No. 16-CV-5060
(JLC), 2017 WL 773695 (S.D.N.Y. Feb. 28, 2017) (finding that
a plaintiffs "serious concerns about collectability . .
. 'militates in favor of finding a settlement
reasonable'" (quoting Lliguichuzhca v. Cinema
60, LLC, 948 F.Supp.2d 362, 365 (S.D.N.Y. 2013))). In
light of these risks and challenges, the proposed settlement
amount represents a substantial recovery.
amount is also reasonable when viewed as a percentage of
Plaintiffs' maximum recovery. On the basis of the
parties' submissions, the Court finds that
Plaintiffs' maximum recovery was $212, 000, which
excludes cumulative liquidated damages under the FLSA and the
NYLL, in light of the "emerging jurisprudential trend .
. . that an employee may not recover cumulative liquidated
damages under both the FLSA and NYLL for overlapping
claims." Hengjin Sun v. China 1221, Inc., No.
12-CV-7135 (RJS), 2016 WL 1587242, at *4 (S.D.N.Y. Apr. 19,
2016); see also Chowdhury v. Hamzan Express Food
Corp., 666 F.App'x 69, 61 (2d Cir. 2016) (summary
order). The proposed settlement thus represents approximately
61 percent of Plaintiffs' maximum recovery, a portion
exceeding that often approved by courts in this District.
See, e.g., Hyun, 2016 WL 1222347, at *2 (approving a
settlement amount of approximately 51 percent of
plaintiffs' maximum recovery); Beckert, 2015 WL
8773460, at *2 (approving a settlement of approximately 25
percent of the maximum possible recovery). The Court thus
finds that the parties' proposed settlement amount is
fair and reasonable.