Cruz v. Alpine Construction & Renovation Corp.

Background

This was a wage-and-hour case in which Luis Cruz and other plaintiffs alleged violations of the minimum-wage and overtime provisions of the Fair Labor Standards Act (FLSA) and violations of New York Labor Law. After a settlement conference in April 2024, the parties consented to Judge Cott’s jurisdiction to review their proposed settlement under 28 U.S.C. § 636(c). They submitted a letter motion and a proposed settlement agreement for approval under Cheeks v. Freeport Pancake House, which requires court review of many FLSA settlements.

Court’s Analysis

The court explained that FLSA settlements generally receive a strong presumption of fairness because courts are not as well positioned as the parties to evaluate the reasonableness of their agreement. The defendants’ apparent financial situation, including the need for a payment schedule, also supported finding the settlement reasonable because collection of damages might otherwise be difficult.

After reviewing the parties’ submissions and the proposed agreement, the court found that all settlement terms, including the allocation of attorney’s fees and costs, appeared fair and reasonable under the circumstances and the factors used to evaluate wage-and-hour settlements. The agreement appeared to result from arm’s-length bargaining between experienced counsel. Plaintiffs’ counsel agreed to receive 25 percent of the settlement award, which the court described as reasonable and commendable because it would maximize the plaintiffs’ recovery.

Disposition

The court approved the settlement. It stated that the approval did not prevent the parties from filing a stipulation and order of dismissal, and the Clerk was directed to close the case. The court separately stated that approval of the settlement should not be treated as approval of any agreed tax allocations.