United States District Court, S.D. New York
SCOTT HIMROD, Individually and on Behalf of All Others Similarly Situated, Plaintiff,
CYGNUS MEDICAL, LLC, MADISON POLYMERIC ENGINEERING, INC., SHAUN SWEENEY and WALTER L. MAGUIRE, JR., Jointly and Severally, Defendants.
ANALISA TORRES, District Judge
a former surgical instrumental specialist at Defendants'
medical products manufacturing and repair company, filed this
action alleging violations of the Fair Labor Standards Act
(“FLSA”), 29 U.S.C. § 201 et seq.,
and the New York Labor Law (“NYLL”). The parties
have settled, and by joint letter, sought Court approval of
their settlement agreement and an award of attorney's
fees to Plaintiff's counsel. Letter, ECF No. 30. The
Court directed the parties to submit a revised settlement
agreement that made the release of claims mutual. ECF No. 32.
The parties now move for approval of their revised settlement
agreement (“the Settlement”). ECF No. 33. For the
reasons stated below, the motion to approve the Settlement is
FLSA was enacted “to correct and as rapidly as
practicable to eliminate” certain “labor
conditions detrimental to the maintenance of the minimum
standard of living necessary for health, efficiency, and
general well-being of workers.” 29 U.S.C. § 202.
Significantly, “[r]ecognizing that there are often
great inequalities in bargaining power between employers and
employees, Congress made the FLSA's provisions mandatory;
thus, the provisions are not subject to negotiation or
bargaining between employers and employees.”
Lynn's Food Stores, Inc. v. U.S. Dep't of
Labor, 679 F.2d 1350, 1352 (11th Cir. 1982) (citing
Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697, 706
accord with the FLSA's mandatory provisions, an employer
cannot settle claims of unfair wages without approval of the
Department of Labor or a United States district court.
See Wolinsky v. Scholastic Inc., 900 F.Supp.2d 332,
335 (S.D.N.Y. 2012). Where, as here, the parties seek
approval from the district court, they must establish that
the settlement is “fair and reasonable.”
Persaud v. D & H Ladies Apparel LLC, No. 16 Civ.
5994, 2017 WL 1944154, at *1 (S.D.N.Y. May 8, 2017). To
determine whether a settlement is fair and reasonable, courts
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 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, 900 F.Supp.2d at 335 (quoting Medley
v. Am. Cancer Soc'y, No. 10 Civ. 3214, 2010 WL
3000028, at *1 (S.D.N.Y. July 23, 2010)). In addition, courts
should not approve agreements that contain “highly
restrictive confidentiality provisions” and
“overbroad” releases of claims. Cheeks v.
Freeport Pancake House, Inc., 796 F.3d 199, 206 (2d Cir.
the proposed settlement provides for payment of
attorneys' fees, the Court must separately assess the
reasonableness of the fee award. Lliguichuzhca v. Cinema
60, LLC, 948 F.Supp.2d 362, 366 (S.D.N.Y. 2013).
“In an individual FLSA action where the parties settled
on the fee through negotiation, there is ‘a greater
range of reasonableness for approving attorney's
fees.'” Wolinsky, 900 F.Supp.2d at 336
(quoting Misiewicz v. D'Onofrio Gen. Contractors
Corp., No. 08 Civ. 4377, 2010 WL 2545439, at *5
(S.D.N.Y. May 17, 2010)). Still, “counsel must submit
evidence providing a factual basis for the award, ”
including “contemporaneous billing records documenting,
for each attorney, the date, the hours expended, and the
nature of the work done.” Id. (citation
Settlement provides for Defendants to pay a total of $132,
500, with Plaintiff to receive $87, 032.50, and
Plaintiff's counsel to receive approximately one-third of
the settlement in fees: $45, 467.50. Settlement ¶ 1(a),
ECF No. 33-1. The parties' initial letter motion
identifies Plaintiff's total possible recovery, if he
were to succeed on all of his claims, to be $485, 955.15.
Letter at 5. However, the parties note there were
“significant litigation risks, ” id.,
that Plaintiff's claims were “fact-intensive,
” id. at 4, and that “[a]lthough there
is a possibility that Plaintiff could recover higher damages
if the case proceeded to trial, there is also the possibility
that he could receive much lower damages, or nothing at all,
” id. at 5. Moreover, the Settlement is the
product of bargaining between experienced counsel.
Id. at 8. The Court, therefore, concludes that the
Settlement satisfies each of the Wolinsky factors.
addition, the release provision in the Settlement is not
overly broad, as it releases Defendants from claims
“relating to any and all federal, state or local wage
and hour claims that were alleged or could have been alleged
in this Action, ” and mutually releases Plaintiff from
“any and all claims . . ., which Defendants at any time
have, had or claimed to have against Plaintiff specifically
relating to the claims that were alleged or could have been
alleged in this Action.” Settlement ¶ 2. The
Settlement does not contain any provisions (1) requiring
confidentiality, or (2) restricting Plaintiff's future
employment opportunities. See generally Settlement.
The mutual non-disparagement clause contains a carve-out for
truthful statements about the litigation and settlement,
which satisfies the remedial goals of the FLSA. Settlement
¶ 6; Lazaro-Garcia v. Sengupta Food Servs., No.
15 Civ. 4259, 2015 WL 9162701, at *3 (S.D.N.Y. Dec. 15,
2015). The Court is, therefore, satisfied that the Settlement
is fair and reasonable.
to attorney's fees, Plaintiff's counsel seeks to
recover $45, 467.50 in fees and costs, reflecting about
one-third of the total value of the Settlement. Settlement
¶ 1(a). The Second Circuit favors the percentage of the
fund approach of calculating attorney's fees because it
“directly aligns the interests of [Plaintiff] and [her]
counsel.” Wal-Mart Stores, Inc. v. Visa U.S.A.,
Inc., 396 F.3d 96, 121 (2d Cir. 2005) (internal
quotation marks and citation omitted). As a check on the
reasonableness of attorney's fees, however, courts still
calculate the total cost of attorney's hours billed,
previously known as the lodestar method. In re AOL Time
Warner S'holder Derivative Litig., No. 02 Civ. 6302,
2010 WL 363113, at *5-6 (S.D.N.Y. Feb. 1, 2010).
counsel's lodestar calculation is $22, 530.56 in costs
and attorney's fees for work done by Pelton Graham LLC;
at $45, 467.50, the bargained-for attorney's fees in the
settlement is approximately 2.23 times the lodestar
calculation. Letter at 7. A multiplier near 2 reflects
sufficient compensation for the risk associated with
contingent fees in FLSA cases. Fujiwara v. Sushi Yasuda
Ltd.,58 F.Supp.3d 424, 439 (S.D.N.Y. 2014) (approving a
multiplier of 2.28). The Court concludes, moreover, that the
billing rates are reasonable. The billing records reflect
time spent drafting the complaint, preparing for and
attending a mediation, and reaching settlement. ECF No. 30-2
at 6-19. Brent Pelton, a founder of Pelton Graham LLC, billed
at a rate of $450 an hour, Taylor Graham, a partner, at $350
an hour, Kristen Boysen, an associate, at $250 an hour, and
Adriana Sandoval, a paralegal, billed at a rate of $125 an
hour. Id. ¶¶ 6-9. Mr. Pelton has been in
practice for 16 years and has extensive experience in
employment litigation. Id. ¶ 6. Mr. Graham, who
graduated from law school in 2011, has federal wage-and-hour
litigation experience at the trial and appellate levels.
Id. ¶ 7. Ms. Boysen graduated law school in
2014. Id. ¶ 8. Although the Court observes that
counsel's rates are on the higher end,  a reduction is
not necessary in light of counsel's effective
representation of Plaintiff here. See Letter at 8
(noting that the “Settlement at this stage of ...