United States District Court, S.D. New York
SOTERO NELI FLORES and CORNELIO GUERRERO, individually and on behalf of others similarly situated
HILL COUNTRY CHICKEN NY, LLC d/b/a HILL COUNTRY CHICKEN and MARC GLOSSERMAN, Defendants.
OPINION AND ORDER
PITMAN United States Magistrate Judge.
matter is before me on the parties' joint application to
approve the parties' settlement (Proposed Settlement
Agreement, annexed as Ex. A to Letter of Alexander W.
Leonard, Esq., to the undersigned, dated Jan. 5, 2018 (Docket
Item ("D.I."} 41}. All parties have consented to my
exercising plenary jurisdiction pursuant to 28 U.S.C. §
an action brought by two individuals who worked as
deliverymen at defendants' restaurant. Plaintiffs bring
this action under the Fair Labor Standards Act (the
"FLSA"), 29 U.S.C. §§ 201 et seq., and
the New York Labor Law (the "NYLL") §§
190 et seq., claiming that they were paid below
minimum wage, that they were not paid the overtime premium
pay to which they were entitled and that defendants
unlawfully paid them at the "tip credit" rate.
Plaintiffs also assert claims based on defendants'
alleged failure to maintain certain payroll records, provide
certain notices as required by the NYLL and reimburse
plaintiffs for the cost of equipment that plaintiffs used
during the course of their employment. Plaintiffs claim to be
entitled to $49, 065.45 in total damages.
dispute plaintiffs' allegations and contend that
plaintiffs were paid the appropriate and lawful minimum wage
throughout their employment. Defendants also maintain that
they complied with the wage notice requirements under the
the parties reached a proposed settlement prior to the
scheduled settlement conference, my knowledge of the
underlying facts and the justification for settlement is
limited to the Complaint and counsel's representations in
their letters seeking settlement approval.
parties have twice sought approval of prior settlement
agreements. By Opinion and Order dated August 11, 2017, I
rejected the parties' first proposed settlement agreement
on the grounds that the proposed settlement: (1} provided
insufficient information to enable me to determine whether
the proposed settlement amount was fair and reasonable and
(2) contained impermissible provisions, including (a) a
unilateral general release in favor of defendants, (b) a
provision barring plaintiffs from re-employment with
defendants and (c) a provision prohibiting plaintiffs from
making truthful statements about their experience litigating
this action (Opinion and Order of the undersigned, dated Aug.
11, 2017 (D.I. 31}}. The parties submitted a revised proposed
settlement agreement, (see Letter of Michael
Faillace, Esq., to the undersigned, dated Sept. 11, 2017
(D.I. 32)), which I also rejected by Opinion and Order, dated
October 25, 2017, due to the parties' failure to cure the
deficient general release (Opinion and Order of the
undersigned, dated Oct. 25, 2017 (D.I. 34)).
parties have submitted a second revised proposed settlement
agreement for approval. I am still unable to approve the
proposed settlement agreement currently before me because it
still contains an impermissible release.
proposed settlement agreement contains a release that,
although unlimited in duration, is limited to wage-and-hour
claims only (Proposed Agreement ¶ 5(a)). See Santos
v. Yellowstone Props., Inc., 15 Civ. 3986 (PAE), 2016 WL
2757427 at *1, *3 (S.D.N.Y. May 10, 2016) (Engelmayer, D.J.)
(approving release that included both known and unknown
claims and was limited to wage and hour claims). However, the
proposed settlement also contains a contradictory provision
that still provides for an impermissible general release
(Proposed Settlement ¶ 3}. In pertinent part, the
provision states that plaintiffs agree "not to refile
the causes of action asserted in the Pending Action or any
other causes of action against Releasees arising from
employment related or other matters that were encompassed or
could have been encompassed or raised in the pending
action" (Proposed Settlement Agreement ¶ 3). Unlike
the limited release contained in the fifth paragraph of the
proposed settlement agreement, given the liberal joinder
rules in federal practice, this provision constitutes a
general release running in favor of defendants and, thus, is
impermissible. Hyun v. Ippudo USA Holdings, 14 Civ.
8706 (AJN), 2016 WL 1222347 at *3-*4 (S.D.N.Y. Mar. 24, 2016}
(Nathan, D.J.) (approving release that included both known
and unknown claims and claims through the date of the
settlement that was limited to wage and hour issues;
rejecting other release that included both known and unknown
claims and claims through the date of the settlement that was
not limited to wage and hour issues); Alvarez v. Michael
Anthony George Constr. Corp., No. 11 CV 1012 (DRH)(AKT),
2015 WL 10353124 at *1 (E.D.N.Y. Aug. 27, 2015} (rejecting
release of all claims "whether known or unknown, arising
up to and as of the date of the execution of this
Agreement" because it included the release of claims
unrelated to wage and hour issues").
the parties are directed to submit a revised settlement
agreement that contains a properly limited release within 30
days of this Order.
Under the terms of the proposed
settlement agreement, "Releasees" are
"defendants and each and every one of their divisions,
affiliates, subsidiaries, parents, corporations under common
ownership or control, related business entities,
predecessors, successors, management companies, assigns,
insurers, officers, directors, trustees, employees, agents,
shareholders, members, owners, representatives, attorneys,