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Gomez v. Bkuk Corp.

United States District Court, S.D. New York

April 3, 2018

BKUK CORP., et al., Defendants.


          HENRY PITMAN United States Magistrate Judge

         This matter is before me on the parties' joint application to approve their settlement. I held a lengthy settlement conference in this matter on March 26, 2018 that was attended by the parties and their counsel. After a settlement was reached during this conference, all material terms of the settlement were placed on the record in open court. All parties have consented to my exercising plenary jurisdiction pursuant to 28 U.S.C. § 636(c) and the parties requested an order on the approval of the settlement without written submissions.

         Plaintiff alleges that he was employed as a kitchen worker from June of 2015 until March 24, 2017 at Cara Mia restaurant that was owned and operated by defendants. Plaintiff further alleges that he worked approximately 48 to 52 hours per week and was paid between $420 and $550 per week for all hours worked. Plaintiff brings this action under the Fair Labor Standards Act (the "FLSA"), 29 U.S.C. §§ 201 et seg., and the New York Labor Law (the "NYLL"), and seeks to recover unpaid overtime premium pay. Plaintiff also asserts claims based on the defendants' alleged failure to provide certain wage notices and statements as required by the NYLL. According to plaintiff's damages calculations, plaintiff estimates he could potentially collect $36, 000 in total damages, minus attorneys' fees and costs.[1]

         Defendants contend that plaintiff never worked more than 40 hours per week during his employment and that he was consistently paid more than the minimum wage. Defendants provided several time cards and copies of paychecks that support this claim. Defendants also contend that plaintiff was provided with required wage statements and notifications. In response, plaintiff maintains that defendants' time records were inaccurate and did not show all hours he actually worked.

         I presided over the settlement conference between the parties and their counsel. After a protracted discussion of the strengths and weaknesses of the parties' respective positions, the parties agreed to resolve the dispute for a total settlement of $19, 000 to be paid in three increments - $6, 333 on June 1, 2018, $6, 333 on July 1, 2018 and $6, 333 on August 1, 2018. The parties also agree that defendants will furnish plaintiff with a confession of judgment that will provide that if defendants, after notice, fail to cure any default in making the installment payments within 15 business days, plaintiff may enter judgment in the amount of $10, 000 plus the unpaid balance of the settlement amount.

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)).

Agudelo 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." Lliquichuzhca v. Cinema 60, LLC, 94 8 F.Supp.2d 362, 365 (S.D.N.Y. 2013) (Gorenstein, M.J.) (internal quotation marks omitted). 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 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 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, plaintiff's net settlement - $12, 216.94 after attorneys' fees and costs - represents approximately 34% of his total alleged damages. This percentage is reasonable. See Redwood v. Cassway Contracting Corp., 16 Civ. 3502 (HBP), 2017 WL 4764486 at *2 (S.D.N.Y. Oct. 18, 2017) (Pitman, M.J.) (net settlement of 2 9.1% of FLSA plaintiffs' maximum recovery is reasonable); Chowdhury v. Brioni America, Inc., 16 Civ. 344 (HBP), 2017 WL 5953171 at *2 (S.D.N.Y. Nov. 29, 2017) (Pitman, M.J.) (net settlement of 40% of FLSA plaintiffs' maximum recovery is reasonable); Felix v. Breakroom Burgers & Tacos, 15 Civ. 3531 (PAE), 2016 WL 3791149 at *2 (S.D.N.Y. Mar. 8, 2016) (Engelmayer, D.J.) (net settlement of 25% of FLSA plaintiff's maximum recovery is reasonable).

         Second, the settlement will entirely avoid the expense and aggravation of litigation. This matter was settled prior to the start of formal discovery, which would have led to protracted and costly litigation, likely involving depositions and further document production. The settlement avoids this burden.

         Third, the settlement will enable plaintiff to avoid the risk of litigation. The main factual dispute in this case is whether the defendants' time cards documenting plaintiff's hours - which were signed by plaintiff - are accurate. The only evidence plaintiff has to rebut this documentation is his own self-serving testimony, which the jury may or may not credit. Given the fact that plaintiff bears the burden of proof and this documentary evidence exists, it is uncertain whether, or how much, plaintiff would recover at trial.

         Fourth, because I presided over the settlement conference that immediately preceded plaintiff's acceptance of the settlement, I know that the settlement is the product of arm's-length bargaining between experienced counsel. Both ...

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