United States District Court, W.D. New York
REPORT AND RECOMMENDATION
MICHAEL J. ROEMER United States Magistrate Judge.
instant case is pending before the Court following a
dispositive referral from the Hon. William M. Skretny. The
lawsuit was commenced by plaintiff Zhaohua Yu on July 17,
2017 for incidents occurring during the course of his
employment at King Buffet in Springville, New York. (Dkt.
Nos. 1, 5). Plaintiff alleged that defendants King Buffet in
Springville, Inc., Xiu Yan Zhang, Jinzhou Shi, and Wen Juan
Pen violated various wage and hour requirements under the
Fair Labor Standards Act (“FLSA”) and New York
State Labor Law. (Id.). The action was brought both
as a collective action pursuant to the FLSA and as a class
action under Rule 23 of the Federal Rules of Civil Procedure.
(Id.). The parties have submitted a notice to the
Court indicating that it is their intent to settle the matter
between themselves prior to discovery and prior to a class
and/or collective action certification. (Dkt. No. 26).
that dismiss FLSA claims with prejudice require approval from
the District Court or the New York State Department of Labor.
Cheeks v. Freeport Pancake House, 796 F.3d 199 (2d
Cir. 2015). The District Court is required to review the
settlement to ensure that it is fair and reasonable by taking
into account the following factors: (1) the plaintiff's
possible range of 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, 335-36 (SDNY 2012). In seeking approval of the
settlement here, the parties have submitted their proposed
settlement agreement and a joint letter discussing the
factors in Wolinsky. (Dkt. No. 26).
reviewing the parties' letter and the proposed settlement
agreement, the Court concludes that the terms of the
settlement are fair and reasonable, with the exception of
some language in the release provisions of the agreement. The
parties have agreed to a settlement in the amount of $16,
000. They arrived at this number through an assessment of
plaintiff's claims and anticipated recovery should he
prevail, defenses that will be asserted, the anticipated cost
and burden of moving forward with the action, and the
litigation risks to both parties. There were issues related
to plaintiff's representation earlier in the case. (Dkt.
Nos. 10, 12, 16). However, it is now clear based upon the
parties' letter that those issues have been resolved and
the settlement was negotiated and agreed to by counsel for
both parties. The proposed settlement agreement indicates
that plaintiff has been represented by counsel through the
negotiation and execution of the agreement. There is no
evidence of fraud or collusion.
respect to attorney's fees, plaintiff signed a retainer
agreement indicating that counsel would receive 1/3 of his
recovery. In addition, the parties represent that costs to
plaintiff total $1, 826.34, of which plaintiff's attorney
is assigning $1000 to plaintiff. Therefore, the overall
recovery less costs borne by plaintiff and prior to
attorney's fees is $15, 000. Both the letter and the
agreement itself indicate that plaintiff's counsel will
receive $1, 000 (costs) and $5, 000 (attorney's fees),
and plaintiff will recover $10, 000. Plaintiff's counsel
attaches their time and billing records, and the tasks and
amount of time spent on those tasks appear reasonable.
Indeed, a fee of $5, 000 is less than the reasonable
chargeable time that plaintiff's counsel has spent
working on the case. Zhang v. Lin Kumo Japanese Rest.
Inc., 13 Civ. 6667, 2015 WL 5122530, at *4 (SDNY Aug.
31, 2015) (“barring unusual circumstances, ” a
fee “in excess of one-third of the settlement amount
disserves the FLSA's important interest in fairly
compensating injured plaintiffs”).
proposed agreement also contains mutual releases by the
parties. Some courts in this Circuit have refused to approve
FLSA settlement agreements with broad, general releases of
claims on the basis that they conflict with the FLSA's
remedial purposes. See Lola v. Skadden, Arps, Meagher,
Slate & Flom LLP, 13 CV 5008, 2016 WL 922223 at *2
(SDNY Feb. 3, 2016) (“In the recent cases where courts
have rejected settlement agreements that included broad
releases waiving non-FLSA claims against defendants, the
releases were not mutual and protected only
defendant.”); Lopez v. Nights of Cabiria, LLC,
96 F.Supp.3d 170 (SDNY 2015) (courts typically reject broad
FLSA releases purporting to “waive practically any
possible claim against the defendants, including unknown
claims and claims that have no relationship whatsoever to
wage-and-hour issues.”); Cionca v. Interactive
Realty, LLC, 15-CV-05123, 2016 WL 3440554 (SDNY June 10,
2016) (approving FLSA settlement agreement “releasing
both plaintiff and defendants from liability for any claims
each may have against the other, up to the date the Agreement
is signed, with the exception of personal injury or
workers' compensation claims by
plaintiff…[because] plaintiff here is no longer an
employee of the defendants, reducing the danger that the
release was obtained through improper job related
paragraph entitled “Mutual Release” indicates
that plaintiff releases defendants from all lawsuits, claims
and demands “concerning and arising from
plaintiff's pay during his alleged employment with
defendants.” (Dkt. No. 26-1, pg. 3). In that same
paragraph defendants agree to release any claims they have or
may have against plaintiff as of the date the agreement is
signed. (Id.). This section appears reasonable
because it is mutual and, with respect to plaintiff, is
limited to wage claims arising during his employment. It is
suggested that the District Court instruct the parties to
include the dates of plaintiff's employment in the
section of this paragraph pertaining to plaintiff's
release of claims, such that this paragraph does not imply
that plaintiff is waiving future claims, employment related
or otherwise. A paragraph entitled “Agreement Not to
File Suit/Arbitration for Past Acts” is more broadly
worded and states that plaintiff agrees not to file any
claim, complaint, arbitration request or action in any court
or judicial forum against defendants “arising out of
any actions or non-actions on the part of defendants before
the execution of this agreement.” (Dkt. No. 26-1, pg.
4). It is suggested that the District Court instruct the
parties to modify this portion of the paragraph so that the
language mirrors the Mutual Release paragraph and states that
plaintiff is waiving only wage and hour claims arising before
the execution of the agreement and during the period of his
employment. Likewise, in the “Discontinuance of
Claims” paragraph, the District Court should instruct
the parties to remove the language “but not limited
to” so that the agreement not to refile includes only
“any and all claims asserted, or which could have been
asserted in the complaint.” (Id.).
these reasons, it is recommended that the District Court
instruct the parties to make the changes to the release
language suggested above, and then approve the proposed
to 28 U.S.C. §636(b)(1), it is hereby
ORDERED that this Report and Recommendation
be filed with the Clerk of Court.
otherwise ordered by Judge Skretny, any objections to this
Report and Recommendation must be filed with the Clerk of
Court within fourteen days of service of this Report and
Recommendation in accordance with the above statute, Rules
72(b), 6(a), and 6(d) of the Federal Rules of Civil
Procedure, and W.D.N.Y. L. R. Civ. P. 72. Any requests for an
extension of this deadline must be made to Judge Skretny.
Failure to file objections, or to request an
extension of time to file objections, within fourteen days of
service of this Report and Recommendation WAIVES THE RIGHT TO
APPEAL THE DISTRICT COURT'S ORDER. See
Small v. Sec'y of Health & Human Servs., 892
F.2d 15 (2d Cir. 1989).
District Court will ordinarily refuse to consider de
novo arguments, case law and/or evidentiary material
which could have been, but were not, presented to the
Magistrate Judge in the first instance. See
Paterson-Leitch Co. v. Mass. Mun. Wholesale Elec.
Co., 840 F.2d 985, 990-91 (1st Cir. 1988).
the parties are reminded that, pursuant to W.D.N.Y.
L.R.Civ.P. 72(b), written objections “shall
specifically identify the portions of the proposed findings
and recommendations to which objection is made and the basis
for each objection, and shall be supported by legal
authority.” Failure to comply with these
provisions may result in the District Court's refusal to
consider the objection.