Case Information

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

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ALBERTO DANIEL BATEN ROJAS, 17 Civ. 2929 (HBP)

Plaintiff, -against- OPINION AND ORDER PIZZA PETE'S LLC, d/b/a

"Pizza Pete's," et al.,

Defendants.

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PITMAN, United States Magistrate Judge: Plaintiff brings this action under the Fair Labor Standards Act (the ^[11] FLSA ^[11] ) , 29 U.S.C. §§ 201 et al., and the ew York Labor Law (the ^[11] NYLL ^[11] ) seeking to recover the difference between what he was actually paid and the applicable minimum wage, unpaid overtime premium pay and other damages. Specifi cally, plaintiff alleges that he was not paid the applicable minimum wage for all the hours he worked, was not paid overti e premium pay at the rate of 150% of his regular hourly rate fo the hours he worked in excess of 40 hours per week, did not receive the "spread-of-hours" pay required by the NYLL for th se days on which the difference between his start and finish ti s exceeded ten hours and did not receive the wage statements an wage notices required by the NYLL. The parties have now ed a settlement and the matter is before me on the parties' joi application for approval of the settlement. All parties have consented to my exercising plenary jurisdiction pursuant to 2 U.S.C. § 636 (c).

Plaintiff alleges that he was employed at defendant ' pizzeria from April 2013 through April 2017 doing delivery wok and performing non-tipped duties unrelated to deliveries such as arranging pizza boxes, making pizzas, stocking the refrigerat r, sweeping and mopping, washing the dishes and taking out e. Plaintiff claims that from April 2013 through September 2013 e typically worked 41 hours per week and was paid $5.50 per hou for all the hours he worked and that from October 2013 throug April 2017 he typically worked 62 hours per week and was paid a fixed salary for all the hours he worked. This fixed salary started at $500.00 per week and was subsequently increased to $550.00 per week in January 2016 and increased again to $575. O in October 2016. Plaintiff further alleges that defendants t ok an offset against plaintiff's wages for any tips he received while making deliveries. Plaintiff estimates that he is owed $78,762.00 in unpaid wages and overtime pay; he estimates his total recoverable damages to be approximately $185,000.00.

Defendants claim that plaintiff worked for them for only two and one-half years but admit that plaintiff is owed ome damages for unpaid overtime premium pay. Defendant have no t'me records reflecting the hours plaintiff worked.

I presided over the settlement conference between t e parties and their counsel on October 20, 2017. Although the matter did not settle at that time, the parties subsequently agreed to settle the matter for $100,000.00, inclusive of att r ney's fees. The parties propose to allocate this figure as follows: (1) $692.00 to be paid to plaintiff's counsel as reimbursement for out-of-pocket costs; (2) one third of the remainder, or $33,102.67, to be paid to plaintiff's counsel a a contingency fee and (3) the net remainder, or $66,205.33, to e paid to plaintiff. The total settlement figure is greater n defendants' best offer at the settlement conference.

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 43573 6, at *12 (S.D.N.Y. Sept. 16, 2011). "If the propose settlement reflects a reasonable compromise over co - tested issues, the court should approve the settle ment." Id. (citing L nn's Food Stores Inc. v. Uni ed States, 679 F.2d 1350, 1353 n. 8 (11th Cir. 1982)).

Agudelo v. E & D LLC, 12 Civ. 960 (HB), 2013 WL 1401887 at *l (S.D.N.Y. Apr. 4, 2013) (Baer, D.J.) (alterations in original "Generally, there is a strong presumption in favor of findin a settlement fair, [because] the Court is generally not in as od a position as the parties to determine the reasonableness of n FLSA settlement." Lliguichuzhca v. Cinema 60, LLC, 948 F. S 2d 362, 365 (S.D.N.Y. 2013) (Gorenstein, M.J.) (internal quot - tion marks omitted). In Wolinsky v. Scholastic Inc., 900 F. Supp. 2d 332, 335 (S.D.N.Y. 2012), the Honorable Jesse M. Fur an, United States District Judge, identified five factors that ar relevant to an assessment of the fairness of an FLSA settleme t:

In determining whether [a] proposed [FLSA] settlement is fair and reasonable, a court should consider the totality of circumstances, including t not limited to the following factors: (1) the plaintiff's range of possible recovery; (2) the ext nt to which the settlement will enable the parties to avoid anticipated burdens and expenses in establish ng their claims and defenses; (3) the seriousness oft e litigation risks faced by the parties; (4) whether he 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 sati - fies these criteria.

First, plaintiff's net settlement -- $66,205.33 aft r deducting costs and counsel's one-third contingency fee - represents approximately 84% of his claimed unpaid wages and approximately 36% of his total alleged damages. This percent ge is clearly reasonable given the uncertainties inherent in an litigation. See Chowdhury v. Brioni America, Inc., 16 Civ. 44 (HBP), 2017 WL 5953171 at *2 (S.D.N.Y. Nov. 29, 2017) (Pitma, M.J.) (net settlement of 40% of FLSA plaintiffs' maximum rec ery is reasonable); 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 29.1% of FLSA plaintiffs' maximum recovery is reasonable); Felix v. Breakroom Bur ers Tacos, 15 Civ. 3531 (PAE), 2016 WL 3791149 at *2 (S.D.N.Y. 8, 2016) (Engelmayer, D.J.) (net settlement of 25% of FLSA plaintiff's maximum recovery is reasonable).

Second, the settlement will entirely avoid the expe se and aggravation of litigation. The factual and legal issues n I this matter would have led to protracted and costly litigatio, likely involving multiple depositions to explore the actual length of plaintiff's employment, the hours he worked and hisl duties. The settlement avoids this burden.

Third, the settlement will enable plaintiff to avoi the risk of litigation. Given the parties' factual dispute concerning the duration of plaintiff's employment and the hou s he worked, it is uncertain whether, or how much, plaintiff wold I recover at trial. If defendants prevailed on their contentio that plaintiff worked for them for only two and one half year I instead of the four-year period claimed buy plaintiff, plain-I i I tiff's recovery would be substantially reduced. Fourth, because (1) I presided over the settlement conference that preceded the settlement and (2) the settleme figure to which the parties agreed exceeds the best offer def n dant made at the settlement conference, I am confident that t e settlement is the product of arm's-length bargaining between experienced counsel. Both counsel represented their clients zealously at the settlement conference.

Fifth, there are no factors here that suggest the existence of fraud. The fact that the settlement figure exce ds defendants' best offer at the settlement conference negates t e possibility of fraud.

Plaintiff's release of defendants will be limited t wage-and-hour claims. I find this release permissible becaus it I I is narrowly tailored to wage-and-hour issues. See Redwood v. i Cassway Contracting Corp., supra, 2017 WL 4764486 at *3 se of defendants "from any and all wage and hour and/or notice claims" that could have been brought permissible "because it 's ! limited to claims relating to wage and hour issues"); Yunda v I SAFI-G, Inc., 15 Civ. 8861 (HBP), 2017 WL 1608898 at *3 (S.D . . Y. Apr. 28, 2017) (Pitman, M.J.) (release that is "limited ims stone Props., Inc., 15 Civ. 3986 (PAE), 2016 WL 2757427 at *l, *3 (S.D.N.Y. May 10, 2016) (release that is "narrowly-tailored plaintiffs' wage-and-hour claims" permissible) (Engelmayer, D.J.); Hyun v. Ippudo USA Holdings, 14 Civ. 8706 (AJN), 2016 L 1222347 at *3-*4 (S.D.N.Y. Mar. 24, 2016) (Nathan, D.J.).

Finally, the settlement provides that one-third of he net settlement figure -- $33,102.67 -- will be paid to plai - tiff's counsel as a contingency fee. Plaintiff's counsel ha submitted billing records which show his lodestar figure to $11,426.25. Although contingency fees of one-third in FLSA are routinely approved in this Circuit, see Santos v. EL Te Butcher Shop Inc., 15 Civ. 814 (RA), 2015 WL 9077172 at *3 Meat & Produce Corp., No. 13 CV 3234 (LB), 2013 WL 5308277 at *l (E.D.N.Y. Sept. 19, 2013) (approving attorneys' fees of one-t ird of FLSA settlement amount, plus costs, pursuant to plaintiff' retainer agreement, and noting that such a fee arrangement "i routinely approved by courts in this Circuit"), I find a fee' i award of one-third here to be excessive. Plaintiff's counsel' specializes in handling minimum wage and overtime cases, and his matter is well within the heartland of counsel's practice; t re were no unique or unusually difficult I appreciate that it appropriate to ply

issues in this matter. a multiplier to counsel's lodestar figure in contingency cases such as this in order to compensate for the risks asso ated with such cases. Nevertheless, a multiplier of almost is excessive, given the unremarkable nature of this matter.

Fujiwara v. Sushi Yasuda Ltd., 58 F. Supp. 3d 424, 439 (S.D . . Y. 2014) (Pauley, D.J.) ("a multiplier near 2 should, in most ca be sufficient compensation for the risk associated with gent fees in FLSA cases").

Accordingly, for all the foregoing reasons, I don t approve the settlement agreement in its current form. I am, i however, willing to approve it if counsel's fee is reduced f om $33,102.67 to twice counsel's lodestar figure, i-~-, $22,298. 0 and the difference remitted to plaintiff. Counsel are to adv se me within ten (10) days whether they agree to this modificati n of the settlement agreement.

Dated: New York, New York

September 3, 2019

SO ORDERED United States Magistrate J dge Copies transmitted to:

All Counsel