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Simono v. Gemco Realty II, LLC, 16-CV-5385 (AJN). (2017)

Court: District Court, S.D. New York Number: infdco20171121f41 Visitors: 5
Filed: Oct. 23, 2017
Latest Update: Oct. 23, 2017
Summary: MEMORANDUM AND ORDER ALISON J. NATHAN , District Judge . On July 6, 2016, the Plaintiff, Matilda Simono, filed a complaint in the Southern District of New York alleging violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. 207(a), and the New York Labor Law ("NYLL"), Art. 19 160, 190, 191, 195(3), 663(1) and N.Y. Comp. Codes R. & Regs. tit. 12, 142-2.2. See Dkt. No. 1. Plaintiff also pleaded violations of anti-retaliation provisions of the FLSA and NYLL, 29 U.S.C. 215(3)
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MEMORANDUM AND ORDER

On July 6, 2016, the Plaintiff, Matilda Simono, filed a complaint in the Southern District of New York alleging violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 207(a), and the New York Labor Law ("NYLL"), Art. 19 §§ 160, 190, 191, 195(3), 663(1) and N.Y. Comp. Codes R. & Regs. tit. 12, § 142-2.2. See Dkt. No. 1. Plaintiff also pleaded violations of anti-retaliation provisions of the FLSA and NYLL, 29 U.S.C. § 215(3) and N.Y. Lab. Law§ 215( 1). Id. On September 28, 2016, the parties informed the Court that they had reached a settlement. See Dkt. No. 16. However, on October 31, 2016, the parties wrote the Court to alert the Court that Ms. Simono had unfortunately and unexpectedly passed away. See Dkt. No. 18. The parties then worked over the course of the next few months to have Ms. Simono's sister, now-Plaintiff Jacqueline Rodriguez, become a proper plaintiff in the instant action and to reduce the terms of their prior settlement to writing. See Dkt Nos. 19-27.

On February 27, 2017, the parties submitted a fully executed settlement agreement for the Court's approval, see Dkt. No. 30-1 (hereafter "Settlement"), along with a joint letter explaining their views on the fairness of the settlement. See Dkt. No. 30 (hereafter "Joint Letter"). However, the parties report the existence of an additional, separate settlement agreement which resolves Ms. Simono's retaliation claims under the FLSA and NYLL and overtime claims under the NYLL. Joint Letter at 2-3, n.2. This second agreement was not submitted to the Court for approval.

The submitted settlement agreement—which only resolves Ms. Simono's wage-and-hour claims under the FLSA — provides for a settlement fund of $10,000, and for attorney's fees of $3,333.00. Settlement at 1-2. For the following reasons, the Court approves the submitted settlement and fee request in full.

However, as further articulated below, the parties present no authority, nor is the Court aware of any, that allows for the settlement of retaliation claims under the FLSA without judicial approval. 1Given this, the parties must either show cause why the unsubmitted agreement is not subject to judicial approval, or must submit that agreement for judicial review.

I. Legal Standard

In order to serve the FLSA's purpose of ensuring "a fair day's pay for a fair day's work," settlements in FLSA cases must be approved by a court or by the Department of Labor. Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199, 206 (2d Cir. 2015) (quotingA.H Phillips, Inc. v. Walling, 324 U.S. 490, 493 (1945)). As a result of this requirement, the Plaintiff's claims in this case cannot be dismissed with prejudice until the Court determines that the settlement is "fair and reasonable." Wolinsky v. Scholastic Inc., 900 F.Supp.2d 332, 335 (S.D.N.Y. 2012). A "fair and reasonable" settlement is one that "reflects a reasonable compromise of disputed issues rather than a mere waiver of statutory rights brought about by an employer's overreaching." Mamani v. Licetti, No. 13-CV-7002(KMW)(JCF), 2014 WL 2971050, at *1 (S.D.N.Y. July 2, 2014) (internal quotation marks omitted).

II. Discussion

A. The Submitted Settlement Is Fair and Reasonable

In the joint letter, the parties persuasively argue that the submitted settlement is fair and reasonable, as both a substantive and procedural matter. While the settlement amount ($10,000) represents only a small fraction of Plaintiffs actual damages according to her calculations ($221,760), Joint Letter at 5, Plaintiff would be taking significant risks to further pursue the case by litigation.

At the core of the dispute are two entirely different theories of the case. Ms. Simono worked at Defendants' pawn shop at the jewelry counter for either thirty-two or forty hours per week, depending on the week, earning $40 per hour. However, Simono also worked as a property manager for the Defendants' residential buildings, purportedly for an additional twentyfive hours per week on average, for which she alleges Defendants failed to pay her altogether. Id. at 3. Defendants argue that Simono did not work anywhere near the number of hours she claims to have worked as a property manager, and that she performed all of the duties for her property manager position while on the clock as a pawn shop employee, time for which she was fairly compensated. Id. at 4.

As the parties relay in their joint letter, the mediator employed by the parties prior to the filing of the instant action, The Honorable Theodore Katz of JAMS, concluded that Simono's recollection of the hours was not credible. Id. at 5. Furthermore, Judge Katz suggested that even if Simono were correct, her property management work would constitute a separate job, entitling her only to minimum wage, and not to her regular $40/hour wage. Id. Given this, Judge Katz had recommended $10,000 as a fair amount to settle the FLSA overtime claims. Id. Moreover, with Ms. Simono's passing, the only remaining evidence to support her allegations is a few text messages between her and residents of Defendants' buildings sent on weeknights and weekends. Id. at 4, 6.

In light of these shortcomings of Plaintiffs case, that the settlement of her FLSA claims amounts to a small percentage of her actual or total damages is not unreasonable. The settlement also helps the parties avoid the burdens and expenses of continued litigation.

Procedurally, the parties negotiated at arm's length over several months through debates between counsel, with the assistance of an experienced mediator, and then again among counsel after the mediation. Id. at 6. The Court thus approves the settlement amount.

The Court also approves counsel's request for attorneys' fees and costs. The Court agrees with other judges in this district that, when assessing the reasonableness of an attorney's fee on the basis of its percentage of the settlement, it is fairer to look to the percentage of the settlement net costs. Zhang v. Lin Kumo Japanese Rest., Inc., No. 13-cv-6667(PAE), 2015 WL 5122530, at *1 & n.1 (S.D.N.Y. Aug. 31, 2015). Here, the requested attorney's fees, $3,333.00, represents 1/3rd of the net settlement. Courts routinely award 1/3rd of a settlement fund as a reasonable fee in FLSA cases. See Zhang, 2015 WL 5122530, at *4 (collecting cases).

Using the lodestar as a "cross check" further demonstrates the reasonableness of this amount. While the lodestar presented here reflects all of the work done with respect to both settlement agreements, it still offers relevant information. Plaintiffs lodestar of $26,048.75 reflects a billing rate of $400/hr for Michael J. Borrelli and $350/hr for Alexander T. Coleman, partners with Borelli & Associates PLLC, $200/hr for associates Michael R. Minkoff and Pooja Bhutani, and $100/hr for the firm's paralegals. Joint Letter at 9-10. These rates are reasonable for this district, see Allende v. Unitech Design, Inc., 783 F.Supp.2d 509, 514-15 (S.D.N.Y. 2011) (collecting cases on reasonable hourly rates), and have been approved routinely. See, e.g., Aguilar v. Trolio Landscaping, Inc., No. 16-CV-2230(CS), Dkt. Nos. 31-32 (S.D.N.Y. Feb. 16, 2017); Santos v. Yellowstone Prop., Inc., No. 15-CV-3986(PAE), 2016 WL 2757427 (S.D.N.Y. May 10, 2016).

The Court thus approves the fee request.

B. The Parties Must Show Cause as to Their Ability To Settle Plaintiff's Retaliation Claim under the FLSA Outside of Judicial Supervision

As stated above, the parties represent that the second settlement agreement, which was not submitted to the Court for approval, resolves Plaintiffs retaliation claims under the FLSA. While Cheeks is specifically directed to wage-and-hour claims under the FLSA, nothing in its language suggests that non-wage-and-hour claims also brought under the FLSA are exempt from the requirement of judicial approval of settlement. In fact, in every case cited by Plaintiff in support of its bifurcation of these claims into two settlement agreements, the parties had separated the claims brought under the FLSA from non-FLSA claims; the parties had not distinguished between wage-and-hour claims under the FLSA and non-wage-and-hour claims also under the FLSA. See Joint Letter at 2-3, n.2 (citing Lorandini v. Developmental Disabilities Inst., Inc., No. 15-CV-2052, Dkt. Nos. 41-42 (E.D.N.Y. Aug. 24, 2016); Abrar v. 7-Eleven, No. 14-CV-6315(ADS)(AKT), 2016 WL 1465360 (E.D.N.Y. Apr. 14, 2016); Santos, 2016 WL 2757427). The parties suggest that based on this precedent, that "the parties do not believe that court-approval is required with respect to the settlement of Plaintiffs retaliation claim." Id. at n.2. The cases cited do not support this belief.2

While it is true that some courts in the Eleventh Circuit have distinguished settlement agreements directed at FLSA retaliation claims from

Furthermore, the parties represent that the second, unsubmitted agreement contains a general release ofliability of the type that — at least within the FLSA context — this Court and other judges in this district, have rejected. See, e.g., Chen v. Carnegie Nails & Spa, Inc., 16-CV-1275(AJN), Dkt. No. 23 (S.D.N.Y. July 5, 2017); Hyun v. Ippudo USA Holdings, 14-CV-8706(AJN), Dkt. No. 118 (S.D.N.Y. Mar. 24, 2016); Lopez v. Nights ofCabiria, LLC, 96 F.Supp.3d 170, 181 (S.D.N.Y. 2015); Flood v. Carlson Rest. Inc., No. 14-CV-2740(AT), 2015 WL 4111668 (S.D.N.Y. July 6, 2015). The parties suggest that the general release is not subject to the Court's scrutiny because it relates to non-FLSA claims. Joint Letter at 3 (citing Banegas v. Mirador Corp., No. 14-CV-8491(AJN), 2016 WL 1451550, at *3 (S.D.N.Y. Apr. 12, 2016) (stating that the "Court need not scrutinize the liability release for fairness" if the general release "stems from a non-FLSA claim that happens to be settled in the same agreement")). But the precedent is inapposite here as well. The general release at issue in the unsubmitted agreement ostensibly does cover Plaintiffs retaliation claim under the FLSA. The parties offer no authority for the implied notion that a general release is appropriate when settling non-wage-and-hour claims brought under the FLSA.

For the foregoing reasons, by October 30, 2017, the parties are ordered to show cause why the Court need not review and approve the parties' agreement covering the settlement of Plaintiff's retaliation claim under the FLSA, or, alternatively, to submit the unsubmitted agreement for review, alongside a letter arguing that its FLSA-related terms, including its release provision, are "fair and reasonable."

III. Conclusion

In sum, the Court approves the submitted settlement and the request for fees in full. Pursuant to the preceding paragraph, the parties are ordered to submit their supplemental response by October 30, 2017.

SO ORDERED.

FootNotes


1. The Court finds no issue with the bifurcated settlement arrangement in general. As the parties note, courts in this Circuit have regularly approved of the practice whereby parties submit their FLSA-related agreement to the Court for approval, and settle plaintiffs other claims, including under the NYLL, by private agreement. See, e.g., Abrar v. 7-Eleven, No. 14-CV-6315(ADS)(AKT), 2016 WL 1465360 (E.D.N.Y. Apr. 14, 2016); Santos v. Yellowstone Prop., Inc., No. 15-CV-3986(PAE), 2016 WL 2757427 (S.D.N.Y. May 10, 2016).
2. A few courts in the Eleventh Circuit have held that settlement ofFLSA retaliation claims need not be approved by the district court "provided its terms do not serve to contaminate the Agreement as to the FLSA claim." See, e.g., Yost v. Wyndham Vacation Resorts, Inc., No. 6:10-cv-1583-0rl-36GJK, 2012 WL 1165598, at *3 (Mar. 26, 2012), adopted, 2012 WL 1165468 (M.D. Fla. Apr. 9, 2012); McQuillan v. H. W Lochner, Inc., No. 6: 12-cv-1586-0rl-36, 2013 WL 6184063, at *3 (M.D. Fla. Nov. 25, 2013); Williams v. Orlando Family Physicians, LLC, No. 6: 16-cv-1213-0rl-41TBS, 2017 WL 3773261, at *2 (M.D. Fla. Aug. 10, 2017); Hernandez v. Iron Container LLC, No. 13-22170-CIV, 2014 WL 633848, at *2 (S.D. Fla. Feb. 18, 2014). However, those cases rely on language in the governing Eleventh Circuit case which circumscribes district court approval of settlements to "compromises ofFLSA back wage or liquidated damage claims." Lynn's Food Stores, Inc. v. U.S. By and Through U.S. Dep't of Labor, Emp't Standards Admin., Wage and Hour Div., 679 F.2d 1350, 1355 (11th Cir. 1982). There is no similar language in Cheeks that circumscribes district courts' review ofFLSA settlements in this circuit. See Cheeks, 796 F.3d at 206 ("[Thus, Rule 41(a)(l)(A)(ii) stipulated dismissals settling FLSA claims with prejudice require the approval of the district court of the DOL to take effect.").
Source:  Leagle

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