Martinez v. SJG Foods LLC
1:16-cv-07890
S.D.N.Y.Oct 16, 2017Background
- Five plaintiffs brought FLSA and NYLL claims against a group of restaurant defendants seeking unpaid wages and overtime.
- Parties negotiated a global settlement providing $200,000 total to plaintiffs and counsel; counsel to receive $66,000.
- Parties first sought judicial approval in April 2017; court denied approval for an overly broad release, confidentiality provisions, and insufficient fee information.
- Parties revised the agreement to narrow the release to claims in the complaint, removed confidentiality, and submitted billing records.
- On joint motion, the court reviewed the revised settlement under Cheeks and applicable FLSA/NYLL fee rules.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the stipulated dismissal/settlement is fair and reasonable under Cheeks | Settlement resolves claims for $200,000; negotiated at arm's length; revisions address prior concerns | Settlement should be approved as a fair, voluntary compromise avoiding litigation costs | Approved: court found the revised agreement fair and reasonable considering parties’ bargaining, recovery range, and avoidance of litigation burdens |
| Whether attorneys’ fees in the settlement are reasonable | Counsel sought one-third of the fund ($66,000), supported by billing records and customary practice in FLSA cases | Defendants did not oppose the fee as unreasonable in the face of the submitted records | Approved: court applied percentage-of-fund approach and Goldberger factors; one-third fee deemed reasonable given prompt resolution and to avoid disincentivizing early settlement |
Key Cases Cited
- Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199 (2d Cir. 2015) (stipulated FLSA dismissals require court approval)
- Velasquez v. SAFl-G, Inc., 137 F. Supp. 3d 582 (S.D.N.Y. 2015) (court must approve fairness of FLSA settlements)
- Wolinsky v. Scholastic Inc., 900 F. Supp. 2d 332 (S.D.N.Y. 2012) (factors for evaluating settlement fairness; arm’s-length bargaining)
- Goldberger v. Integrated Resources, Inc., 209 F.3d 43 (2d Cir. 2000) (traditional criteria for assessing attorneys’ fees)
- McDaniel v. County of Schenectady, 595 F.3d 411 (2d Cir. 2010) (public policy considerations regarding fee awards and settlements)