Carabali v. J. Wasser & Co.

Background

The plaintiffs brought claims under the Fair Labor Standards Act and the New York State Labor Law. They told the court that they had reached a settlement with J. Wasser & Co. Inc., doing business as J. Wasser & Co., and Alex Kohn. The executed agreement required a total payment of $60,000. Of that amount, $20,872 would go to plaintiffs’ counsel for attorneys’ fees and costs. The agreement included a release of wage claims against the defendants but did not include a confidentiality provision, general release, or non-disparagement clause.

Because the claims arose under the Fair Labor Standards Act, the court reviewed the settlement for fairness under the required court-approval standard. The court reviewed the settlement motion, agreement, damages calculations, billing records, and invoices, and requested supplemental briefing before ruling.

Settlement Approval

The court found the settlement fair and reasonable. The plaintiffs estimated that Mr. Carabali’s total recoverable amount was $135,927 and Mr. Almonte’s was $99,908. After attorneys’ fees and costs, Mr. Carabali would receive $22,302.96 and Mr. Almonte would receive $16,824.04. The court calculated those amounts as approximately 16% and 17%, respectively, of the plaintiffs’ estimated maximum recoveries and found the amounts acceptable.

The court also considered that the case was still at an early stage and that settlement would avoid further expenses and litigation risks. Both sides were represented by counsel, exchanged documents, and participated in two mediation conferences. The court found that the agreement reflected a reasonable compromise because the plaintiffs faced potential difficulties proving standing for their wage-statement and wage-notice claims. The defendants also said they had records challenging the plaintiffs’ claimed weekly hours and evidence that they were not the plaintiffs’ true employer. The court found no indication of fraud or collusion and concluded that the limited, unilateral release was acceptable.

Attorneys’ Fees and Costs

The plaintiffs requested $20,872 in attorneys’ fees and costs, including $872 for counsel’s out-of-pocket costs. The court stated that this represented approximately 33% of the net settlement amount and found the request reasonable. The court noted that courts in the circuit had approved fees of up to 35% of the recovery. It also declined to compare the contingency fee with counsel’s hours worked through a separate calculation because the fee was agreed to in advance and counsel bore the risk that the recovery might not adequately compensate the time spent litigating the case.

Disposition

Judge Arun Subramanian approved the settlement, approved the attorneys’ fees and costs, and dismissed the case with prejudice. The Clerk of Court was directed to close the case.