Yepez v. 3rd Avenue Dollar LLC

Background Luis Yepez alleged that he worked for 3rd Avenue Dollar LLC as a stock clerk and was owed unpaid minimum and overtime wages, liquidated damages, and statutory damages under the Fair Labor Standards Act and New York Labor Law. The statutory-damages claims concerned allegedly missing wage statements and wage notices. Yepez estimated that he was owed approximately $14,975 in unpaid wages and that his maximum potential recovery could reach $39,950, excluding available prejudgment interest.

3rd Avenue Dollar disputed liability, stating that Yepez was never hired by the company and that any work or payments involving him were unauthorized. The parties negotiated before discovery through attorneys experienced in wage-and-hour litigation. Their agreement required 3rd Avenue Dollar to pay $17,500 in three installments: $6,000 within fifteen days after approval, followed by payments of $5,750 within thirty days and another $5,750 within sixty days of the first payment.

Settlement terms The agreement allocated $6,103.33 to Yepez’s attorneys: $405 to reimburse the filing fee and $5,698.33 as an attorney fee. The fee represented one-third of the net settlement consideration. Yepez would receive the remaining $11,396.67. The agreement also included a one-way release of wage claims under the Fair Labor Standards Act and New York Labor Law. The court noted that the agreement had no non-disparagement clause, rehiring prohibition, or confidentiality clause.

Court’s analysis Under the governing standard for reviewing Fair Labor Standards Act settlements, the court had to determine whether the agreement was a reasonable compromise rather than an improper waiver of statutory rights. Judge Moses found the settlement fair and reasonable in light of the risks of proving liability and damages, the possibility that Yepez might recover or collect nothing, and the parties’ desire to avoid the costs and delay of trial. She also found the attorney-fee allocation acceptable, even though it exceeded counsel’s reported lodestar, because counsel obtained a favorable result efficiently.

Disposition The court granted Yepez’s May 14, 2024 letter-motion, approved the proposed settlement, and dismissed this action with prejudice. The opinion also states that Yepez had previously voluntarily dismissed all claims against former co-defendant Mamat Mazot without prejudice; 3rd Avenue Dollar was therefore the sole remaining defendant when the settlement was approved.