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Patel v. Arav & Ishaan Food Inc.

United States District Court, S.D. New York

April 3, 2018

ARAV & ISHAAN FOOD, INC et al., Defendants.



         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 19, 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 she was employed as a food preparation worker and cashier at a Subway restaurant that was owned and operated by defendants. Plaintiff further alleges that she worked approximately 50 hours per week -- ten hours per day, five days a week -- and was paid $8 an hour 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 minimum wages, overtime premium pay and spread of hours damages. 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 she could potentially collect $19, 924 in total damages, minus attorneys' fees and costs. This figure includes unpaid minimum wage and overtime premium compensation, spread of hours damages, liquidated damages and statutory wage notification violations.

         Defendants contend that plaintiff never worked more than 4 0 hours per week during her employment and that she was paid $535 per week. Defendants do not dispute that plaintiff was never provided with wage or statement notices. Neither plaintiff, nor defendants have any time records documenting the number of hours worked by plaintiff or her hourly pay.

         I presided over the three-hour settlement conference among 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 $16, 000 with the following payment schedule:

(1) Defendants will make an initial payment of $5, 000 within 15 days of the Court's approval of the settlement;
(2) Defendants will make a payment of $2, 000 within 30 days of the first payment's due date;
(3) Defendants will make a payment of $1, 300 within 30 days of the second payment's due date. Defendants will then make four monthly payments of $1, 300 thereafter for four consecutive months;
(4) Defendants will make a final payment of $2, 500 within 30 days of the last monthly $1, 300 payment's due date.

         The parties also agree that defendants will furnish plaintiff with a confession of judgment that will provide that if defendants, after receiving notice, fail to cure any default in making payments within ten business days, plaintiff may enter judgment in the amount of $20, 000 less the amount actually paid up to the date of the default.

         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.K.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)).

Aaudelo 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." Llicruichuzhca 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 ...

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