throbber
Case 1:18-cv-00881-EAW-MJR Document 101 Filed 06/25/20 Page 1 of 14
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`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF NEW YORK
`___________________________________
`
`ARMANDO CARDENAS, et al.,
`
`Plaintiff,
`
`
`
`v.
`
`
`
`
`
`A.J. PIEDIMONTE AGRICULTURAL
`DEVELOPMENT, LLC, et al.,
`
`Defendants.
`
`
`
`____________________________________
`
`
`
`
`
`
`
`
`
`DECISION AND ORDER
`
`1:18-cv-00881 EAW
`
`BACKGROUND
`
`
`
`Named plaintiffs Armando Cardenas, Jose F. Cardenas, Juanita Senteno, Veronica
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`Simmons Bailey, Isaiah Alexander, Kathy Alexander, and Shonda Tate (collectively
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`“Named Plaintiffs”) commenced the instant action on August 8, 2018, on behalf of
`
`themselves and all others similarly situated. (Dkt. 1). The Complaint alleges that Named
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`Plaintiffs are former employees of defendants A.J. Piedimonte Agricultural Development,
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`LLC, James J. Piedimonte & Sons, Inc, James J. Piedimonte & Sons, LLC, MAGC, Inc.,
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`Anthony Joseph Piedimonte, and Scott James Bennett (collectively “Defendants”), and
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`that, among other things, they were not paid the minimum hourly rates required by law.
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`(Id.).
`
`
`
`On September 20, 2018, the Court referred the matter to United States Magistrate
`
`Judge Michael J. Roemer for supervision of all pre-trial matters except dispositive motions.
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`(Dkt. 29).1 On November 27, 2018, Judge Roemer issued a Decision and Order
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`conditionally certifying the matter as a collective action pursuant to § 216(b) of the Fair
`
`Labor Standards Act (“FLSA”), 29 U.S.C. § 216(b). (Dkt. 48). In addition to Named
`
`Plaintiffs, 41
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`individuals (“Opt-In Plaintiffs”) (together with Named Plaintiffs,
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`“Plaintiffs”) have opted-in to participation in this lawsuit. See Myers v. Hertz Corp., 624
`
`F.3d 537, 542 (2d Cir. 2010) (“Unlike in traditional ‘class actions’ maintainable pursuant
`
`to Federal Rule of Civil Procedure 23, plaintiffs in FLSA representative actions must
`
`affirmatively ‘opt in’ to be part of the class and to be bound by any judgment.”).
`
`
`
`The parties participated in a mediation session before Nelson Thomas, Esq. on May
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`21, 2019. (See Dkt. 76). On January 14, 2020, Judge Roemer presided over a settlement
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`conference wherein the parties made significant process towards a mutually agreeable
`
`resolution of the matter. (See Dkt. 95; Dkt. 99 at 3). The parties appeared before Judge
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`Roemer again on February 19, 2020, and engaged in further settlement negotiations. (See
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`Dkt. 96; Dkt. 99 at 3-4). On April 10, 2020, the parties submitted to the Court a joint letter
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`request for approval of their negotiated Settlement Agreement and Release. (Dkt. 99).
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`
`
`The Court has reviewed the negotiated Settlement Agreement and Release (Dkt. 99-
`
`1) (the “Settlement Agreement”), and approves it—with one modification—for the reasons
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`set forth below.
`
`
`
`
`The referral to Judge Roemer was subsequently modified to include hearing and
`1
`reporting upon dispositive motions for the consideration of the undersigned pursuant to 28
`U.S.C. § 636(b)(1)(B) and (C). (Dkt. 88).
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`Case 1:18-cv-00881-EAW-MJR Document 101 Filed 06/25/20 Page 3 of 14
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`DISCUSSION
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`Legal Standard
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`Plaintiffs have not moved to certify this case as a class action pursuant to Federal
`
`I.
`
`
`
`Rule of Civil Procedure 23 and the deadline for doing so has long since passed. (See Dkt.
`
`47 at ¶ 8 (deadline to move for class certification was October 4, 2019)). Accordingly, the
`
`Settlement Agreement does not impact the rights of any non-parties, and the Court need
`
`not consider whether the requirements to maintain a class action are satisfied. See Scott v.
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`Chipotle Mexican Grill, Inc., 954 F.3d 502, 520 (2d Cir. 2020) (“[T]he requirements for
`
`certifying a class under Rule 23 are unrelated to and more stringent than the requirements
`
`for ‘similarly situated’ employees to proceed in a collective action under § 216(b).”); Surdu
`
`v. Madison Glob., LLC, No. 15 CIV. 6567 (HBP), 2018 WL 1474379, at *6 (S.D.N.Y.
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`Mar. 23, 2018) (“[S]ettlement of a collective action does not implicate the same due
`
`process concerns as the settlement of a class action because, unlike in Rule 23 class actions,
`
`the failure to opt in to an FLSA collective action does not prevent a plaintiff from bringing
`
`suit at a later date.”). Instead, as an initial matter, the Court must satisfy itself that Opt-In
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`Plaintiffs are “similarly situated” to Named Plaintiffs before it can finally determine that a
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`collective action is appropriate. See Marichal v. Attending Home Care Servs., LLC, 432
`
`F. Supp. 3d 271, 277 (E.D.N.Y. 2020) (“The Court can conclude that the opt-in plaintiffs
`
`are in fact similarly situated, either following motion practice by the parties or through its
`
`review of a proposed settlement agreement[.]”).
`
`
`
`Further, “an employee may not waive or otherwise settle an FLSA claim for unpaid
`
`wages for less than the full statutory damages unless the settlement is supervised by the
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`Case 1:18-cv-00881-EAW-MJR Document 101 Filed 06/25/20 Page 4 of 14
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`Secretary of Labor or made pursuant to a judicially supervised stipulated settlement,” and
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`in the latter case, “before a district court enters judgment, it must scrutinize the settlement
`
`agreement to determine that the settlement is fair and reasonable.” Wolinsky v. Scholastic
`
`Inc., 900 F. Supp. 2d 332, 335 (S.D.N.Y. 2012). Such analysis is frequently referred to as
`
`a Cheeks analysis, in reference to Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199
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`(2d Cir. 2015). In performing the Cheeks analysis, the Court considers the totality of the
`
`circumstances, including 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 (quotation omitted). “There is a strong presumption in
`
`favor of finding a settlement fair, as the Court is generally not in as good a position as the
`
`parties to determine the reasonableness of an FLSA settlement.” Cabrera v. CBS Corp.,
`
`No. 17-CV-6011 CM BCM, 2019 WL 502131, at *5 (S.D.N.Y. Feb. 8, 2019) (quotation
`
`omitted).
`
`II.
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`Final Certification of Collective Action
`
`
`
`The Court first considers whether Named Plaintiffs and Opt-In Plaintiffs are
`
`“similarly situated” such that final certification of the collective action is warranted. As
`
`the Second Circuit recently held, in this context “to be ‘similarly situated’ means that
`
`named plaintiffs and opt-in plaintiffs are alike with regard to some material aspect of their
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`litigation.” Scott, 954 F.3d at 516. The Court easily concludes that this standard is met
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`Case 1:18-cv-00881-EAW-MJR Document 101 Filed 06/25/20 Page 5 of 14
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`here. The record in this matter supports the conclusion that Plaintiffs were employed by
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`Defendants in sufficiently similar roles and that there are common issues of law and fact
`
`regarding whether they were paid the minimum wage required by law. (See, e.g., Dkt. 92-
`
`1 at 9; Dkt. 92-2; Dkt. 92-3; Dkt. 92-4; Dkt. 93-1). In particular, there are common
`
`questions as to the applicability of the FLSA’s exemption of agricultural employees from
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`its overtime requirements, see 28 U.S.C. § 213(b)(12), and by definition the collective
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`action consists solely of individuals who performed physical labor for Defendants for more
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`than 40 hours in a week and were paid on an hourly basis but did not receive overtime
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`compensation (see Dkt. 48 at 9). Accordingly, the Court finds that Named Plaintiffs and
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`Opt-In Plaintiffs share a “similarity with respect to an issue of law or fact material to the
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`disposition of their FLSA claim,” Scott, 954 F.3d at 516 n.4, and grants final certification
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`of the collective action.
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`III. Assessment of Settlement Agreement
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`
`
`The Court turns next to the substance of the Settlement Agreement. As an initial
`
`matter, the Court notes that “the named plaintiff and his counsel in a collective action
`
`cannot settle a case on behalf of an opt-in plaintiff: the affirmative assent of each opt-in
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`plaintiff—as a party to the case—is required.” Marichal, 432 F. Supp. 3d at 279. Courts
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`often satisfy this requirement by using “a two-tiered procedure: first, the parties file a
`
`motion for preliminary approval of the settlement and request approval of a notice. . . . As
`
`a second step, the parties file a motion for final approval, and the Court conducts a final
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`fairness hearing, giving all opt-in plaintiffs the opportunity to be heard by the Court.” Id.
`
`at 280. However, such a two-step procedure is not necessary in every case; for example,
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`Case 1:18-cv-00881-EAW-MJR Document 101 Filed 06/25/20 Page 6 of 14
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`it is not required where each opt-in plaintiff has assented to the terms of the proposed
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`settlement. See id. at 284 n.4.
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`
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`In this case, all of the Opt-In Plaintiffs have actively participated in the litigation
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`and Plaintiffs’ counsel has affirmatively represented to the Court that all the Opt-In
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`Plaintiffs have verbally authorized counsel to enter into the Settlement Agreement on their
`
`behalves. (See Dkt. 100 at 2). Further, the Settlement Agreement provides that Opt-In
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`Plaintiffs release their claims against Defendants only by signing their settlement checks.
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`(Dkt. 99-1 at 10). In other words, “Opt-In Plaintiffs will not be bound by the terms of the
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`[Settlement Agreement] unless they affirmatively choose to endorse the check and accept
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`the [Settlement Agreement]. Opt-In Plaintiffs who do not endorse the check will not
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`release any claims and will not be prejudiced.” (Dkt. 100 at 5). On the specific facts of
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`this case, where all of the Opt-In Plaintiffs have actively participated in the litigation and
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`have authorized Plaintiffs’ counsel to enter into the Settlement Agreement on their
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`behalves, the Court finds this procedural mechanism sufficient to ensure that the Opt-In
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`Plaintiffs have consented to the terms of the Settlement Agreement. See, e.g., Ramirez v.
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`Soc. 8th Ave Corp., No. 18-CV-2061 (OTW), 2019 WL 1382711, at *1 (S.D.N.Y. Mar. 26,
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`2019) (approving settlement of FLSA collective action in single-step process); Souza v. 65
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`St. Marks Bistro, No. 15-CV-327 (JLC), 2015 WL 7271747, at *3 (S.D.N.Y. Nov. 6, 2015)
`
`(“Since Cheeks was decided, courts have taken a number of approaches to the approval of
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`wage-and-hour settlements. For example, many judges in this District now require the
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`parties (to the extent they are seeking to dismiss the action with prejudice) to file a joint
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`letter-motion requesting approval of the settlement agreement (or alternatively provide
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`Case 1:18-cv-00881-EAW-MJR Document 101 Filed 06/25/20 Page 7 of 14
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`documentation of DOL approval) on the public docket and explaining why the proposed
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`settlement is fair and reasonable. Once such letter-motions are filed, the court then
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`evaluates the settlement, and assuming it concludes it is fair and reasonable, approves the
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`settlement in a docketed order without holding a formal hearing.”).
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`
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`With respect to the required Cheeks analysis, the Court finds the Settlement
`
`Agreement fair and reasonable. As to the first factor, the total settlement amount in this
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`matter is $250,000.00,2 which falls in between the parties’ opening damages computations.
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`The total settlement amount is approximately 30% of the amount that Plaintiffs sought in
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`their still-pending motion for default judgment (Dkt. 92), which sets forth detailed
`
`calculations of the potential damages.3 Considered in the context of the time and expense
`
`associated with continuing to litigate this matter and the defenses asserted by Defendants,
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`the Court finds the proposed settlement amount acceptable. See, e.g., Lara v. Air Sea Land
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`Shipping & Moving Inc., No. 19-CV-8486 PGG BCM, 2019 WL 6117588, at *2 (S.D.N.Y.
`
`Nov. 18, 2019) (approving settlement of FLSA overtime claim for approximately 30% of
`
`potential recovery where “damages would be vigorously contested, making a compromise
`
`figure appropriate for settlement”). The Court notes that each of the Plaintiffs will receive
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`a meaningful payment (ranging from $710.17 to $27,165.42). (See Dkt. 99-2 at 1); cf.
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`Cabrera v. CBS Corp., 2019 WL 502131, at *5 (rejecting proposed settlement where the
`
`
`This settlement amount is to be paid and distributed in five equal installments. (See
`2
`Dkt. 99-1 at 4-5).
`
` 3
`
`This motion, which is based on the failure of the corporate defendants to retain new
`
`counsel after their prior counsel was granted permission to withdraw (see Dkt. 81; Dkt. 82;
`Dkt. 85), is mooted by the Court’s approval of the Settlement Agreement.
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`Case 1:18-cv-00881-EAW-MJR Document 101 Filed 06/25/20 Page 8 of 14
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`plaintiffs “would receive no settlement payment at all”). There is also no reversion to
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`Defendants—in other words, in the event any Plaintiff opts not to claim his or her share of
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`the settlement amount, the unclaimed funds will be redistributed to the remaining Plaintiffs.
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`(See Dkt. 99-1 at 6).
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`
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`As to the second and third factors, the costs and risks to Plaintiffs of continuing with
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`this litigation are very real. As the Court noted above, Defendants have asserted that the
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`FLSA’s overtime exemption for agricultural workers applies in this case, a fact-intensive
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`issue on which either party might prevail. Further, while Plaintiffs have sought default
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`judgment as to the corporate defendants, the individual defendants concededly have not
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`defaulted. As the parties have explained, inclusion of the individual defendants in the
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`Settlement Agreement “increases Plaintiffs[’] likelihood of collecting . . . in comparison to
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`a judgment against corporate entities.” (Dkt. 99 at 5). Plaintiffs’ likelihood of collecting
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`is further enhanced by the fact that the Settlement Agreement “will allow Defendants to
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`remain in business and significantly decreases the possibility that Defendants will face
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`bankruptcy.” (Id.). Further, the Settlement Agreement avoids the disruption to Plaintiffs’
`
`lives and ability to work that would be occasioned by a trial.
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`
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`Finally, turning to the fourth and fifth factors, the Settlement Agreement was
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`negotiated at arm’s-length by experienced counsel. Plaintiffs are represented by the
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`Worker Justice Center of New York (“WJCNY”), and Defendants were previously
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`represented by David Cook, Esq., a partner at Phillips Lytle LLP. (See Dkt. 99 at 6). The
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`settlement negotiations were overseen in significant part by Judge Roemer. There are no
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`Case 1:18-cv-00881-EAW-MJR Document 101 Filed 06/25/20 Page 9 of 14
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`indicia of fraud or collusion, and none of the Plaintiffs are currently employed by
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`Defendants, so potential fear of reprisal is not a factor.
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`
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`The Settlement Agreement also does not include certain types of provisions that
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`courts have found problematic in the FLSA context. Specifically, it does not contain a
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`confidentiality provision or an overbroad release including non-employment claims. See,
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`e.g., Lara, 2019 WL 61117588 (“As this Court and other courts have frequently explained
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`. . . confidentiality clauses are contrary to public policy and the remedial purposes of the
`
`FLSA because they prevent the spread of information about FLSA actions to other workers
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`who could then use that information to vindicate their own statutory rights[.]” (quotations
`
`and original alterations omitted)); Russell v. Broder & Orland, LLC, No. 3:17-CV-1237
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`(VAB), 2018 WL 3104101, at *3 (D. Conn. June 22, 2018) (“This Court previously
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`declined approval because the Settlement Agreement had a broad release section that swept
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`beyond the release of the type of claim settled in this FLSA action, especially given the
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`inclusion of past and future claims under tort, common law, or federal, state, and local
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`human rights law. Courts within the Second Circuit have rejected such agreements.”
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`(quotation and citation omitted)).
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`
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`However, the Settlement Agreement does contain a non-disparagement clause,
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`which can also be impermissible in the FLSA context. See Lara, 2019 WL 61117588, at
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`*3. “‘Although not all non-disparagement clauses are per se objectionable,’ if the
`
`provision ‘would bar plaintiffs from making any negative statement about the defendants,
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`it must include a carve-out for truthful statements about plaintiffs’ experience litigating
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`their case.’” Lazaro-Garcia v. Sengupta Food Servs., 15-CV-4259, 2015 WL 9162701, at
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`Case 1:18-cv-00881-EAW-MJR Document 101 Filed 06/25/20 Page 10 of 14
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`*3 (S.D.N.Y. Dec. 15, 2015) (quoting Lopez v. Nights of Cabiria, LLC, 96 F. Supp. 3d 170,
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`180 (S.D.N.Y. 2015)). The non-disparagement clause in this case is very broad, stating
`
`that “[t]he parties mutually agree that they shall not make any oral or written statement that
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`disparages the other party.” (Dkt. 99-1 at 11). The Court cannot approve this non-
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`disparagement clause as written.
`
`
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`However, the Settlement Agreement also contains a severability clause, which
`
`provides that “[i]f any term or provision of this Agreement, or the application thereof to
`
`any person or circumstances . . ., will to any extent be invalid or unenforceable, the
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`remainder of this Agreement, or the application of such terms to persons or circumstances
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`other than those as to which it is invalid or unenforceable, will not be affected thereby.”
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`(Id. at 12). Under these circumstances, the Court can condition its approval on striking or
`
`modifying the non-disparagement clause. See Lara, 2019 WL 61117588, at *3 (“Rather
`
`than withhold approval of the parties’ settlement on the ground that the release,
`
`confidentiality, and non-disparagement clauses are not fair to the plaintiff, however, the
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`Court relies on the Agreement’s severability clause [to modify the release and strike the
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`confidentiality and non-disparagement clauses].”). In particular, the Court conditions its
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`approval on the parties either (1) striking the non-disparagement clause in its entirety or
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`(2) modifying it to read as follows: “The parties mutually agree that they shall not make
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`any oral or written statement that disparages the other party, except that Plaintiffs are not
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`prohibited from making truthful statements about their experiences litigating this lawsuit.”
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`IV. Approval of Claims Administrator
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`
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`The Settlement Agreement anticipates the use of a claims administrator to
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`administer payment of the settlement funds. (See Dkt. 99-1 at 3). The Court agrees with
`
`the parties that given the complex administration required in this case—particularly the
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`need to issue five rounds of payments—it is appropriate to retain a claims administrator.
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`
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`The parties have agreed to retain Settlement Services, Inc., as Claims Administrator,
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`and ask the Court to approve a fee of $21,725.00. (Dkt. 99 at 7). The Court finds this fee
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`reasonable and approves this aspect of the parties’ agreement. See, e.g., Chang v. Philips
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`Bryant Park LLC, No. 17-CV-8816-LTS-SLC, 2019 WL 8105999, at *4 (S.D.N.Y. Oct.
`
`23, 2019) (approving settlement agreement with provision for up to $30,000 in fees for
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`claims administrator), adopted, 2020 WL 104812 (S.D.N.Y. Jan. 9, 2020); Flores v.
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`Mamma Lombardi’s of Holbrook, Inc., 104 F. Supp. 3d 290, 316 (E.D.N.Y. 2015) (“Courts
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`within this district have awarded up to $50,000 for the settlement claims administrator.”).
`
`V.
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`Attorneys’ Fees and Costs
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`
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`Finally, the Court considers Plaintiff’s request for attorneys’ fees. In accordance
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`with Cheeks, the Court reviews a request for attorneys’ fees to ensure that it is reasonable.
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`See Hernandez v. Boucherie LLC, No. 18-CV-7887 (VEC), 2019 WL 3765750, at *3
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`(S.D.N.Y. Aug. 8, 2019). Here, WJCNY has request requested a payment of $18,698.70—
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`$3,050.70 in costs and $15,648.00 in attorneys’ fees. (Dkt. 99 at 7). This figure was
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`calculated by “multiplying the total attorneys’ fees and costs sought in the Motion for
`
`Default Judgment, $69,827.19, by 26.765%,” which is the same manner in which each
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`Plaintiffs’ proportionate share of the settlement amount was calculated. (Id.).
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`
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`The Court finds that the fees requested in this case are plainly reasonable. “In
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`determining a fee award, the typical starting point is the so-called lodestar amount, that is
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`‘the number of hours reasonably expended on the litigation multiplied by a reasonable
`
`hourly rate.’” Healey v. Leavitt, 485 F.3d 63, 71 (2d Cir. 2007) (quoting Hensley v.
`
`Eckerhart, 461 U.S. 424, 433 (1983)). Here, Plaintiffs’ counsel requested $66,776.49
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`($69,827.19 less the $3,050.70 in costs) in fees in connection with the motion for default
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`judgment, and supported that request with detailed contemporaneous time records. (See
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`Dkt. 93; Dkt. 94-8). The requested hourly rates range from $85-$100 per hour for
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`paralegals, to $200 per hour for an attorney with seven years of experience, to $300 per
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`hour for the Legal Director of the WJCNY, who has more than 15 years of relevant legal
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`experience. (See Dkt. 93 at ¶¶ 39-61). Having reviewed the contemporaneous records, the
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`Court finds the time expended on this matter reasonable, and further notes that Plaintiffs
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`have not sought any additional attorneys’ fees for the time expended after the default
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`judgment motion was filed, including time spent negotiating settlement and drafting the
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`Settlement Agreement. The requested hourly rates are also consistent with those approved
`
`in other FLSA actions in this District. See, e.g., Snead v. Interim Healthcare of Rochester,
`
`Inc., 286 F. Supp. 3d 546, 558 (W.D.N.Y. 2018) (finding $200 per hour a reasonable fee
`
`for attorney with seven years of experience); Mendez v. Radec Corp., 907 F. Supp. 2d 353,
`
`357 (W.D.N.Y. 2012) (finding $200 per hour a reasonable average hourly rate in FLSA
`
`litigation); Odom v. Hazen Transp., Inc., 275 F.R.D. 400, 413 (W.D.N.Y. 2011) (finding
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`$195 per hour for an associate reasonable in FLSA litigation); Falleson v. Paul T. Freund
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`Case 1:18-cv-00881-EAW-MJR Document 101 Filed 06/25/20 Page 13 of 14
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`Corp., 736 F. Supp. 2d 673, 676 (W.D.N.Y. 2010) (concluding that $215 per hour was a
`
`reasonable average rate for the work of the attorneys and paralegals in FLSA case).
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`The Court thus finds a lodestar amount of $66,776.49 to be a reasonable starting
`
`point in assessing the reasonableness of the fee request. Plaintiffs’ attorneys seek only a
`
`fraction of that amount, which already failed to reflect much of the time they spent on
`
`settlement of this matter. Further, the requested fees and costs together amount to only
`
`approximately 7% of the total settlement amount. By any measure, the requested fees are
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`reasonable.
`
`The Court further approves Plaintiffs’ request that counsel be reimbursed $3,050.70
`
`in costs. Plaintiffs’ counsel has set forth the breakdown of the requested costs (namely,
`
`$400.00 for the filing fee, $255.00 in service costs, $200.00 in postage costs for mailing
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`notice to potential opt-in plaintiffs, and $2185.70 for depositions) (see Dkt. 93 at ¶ 6) and
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`have further provided documentation therefor (see Dkt. 94-8 at 20-23).
`
`CONCLUSION
`
`For the reasons set forth above, the Court approves the Settlement Agreement,
`
`subject to modification of the non-disparagement provision. The Court further approves a
`
`fee of $21,725.00 for the Claims Administrator, and a payment of $3,050.70 in costs and
`
`$15,648.00 in attorneys’ fees to Plaintiffs’ counsel.
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`Pursuant to the terms of the Settlement Agreement, the parties shall exchange
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`signed copies thereof within seven days of entry of this Decision and Order.
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`Plaintiffs shall thereafter file a stipulation of dismissal, again in accordance with
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`the terms of the Settlement Agreement.
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`Case 1:18-cv-00881-EAW-MJR Document 101 Filed 06/25/20 Page 14 of 14
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`SO ORDERED.
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`_________________________________
`ELIZABETH A. WOLFORD
`United States District Judge
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`Dated:
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`June 25, 2020
`Rochester, New York
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