Lazo v. Rays Inc. 1

Background

The parties filed a joint letter motion asking the court to approve their settlement of Manuel Lazo’s claims. Lazo’s counsel separately requested approval of attorney’s fees and costs. The opinion states that Lazo worked for the defendants from 2016 until around June 6, 2023, and that he was paid a weekly salary regardless of the time worked. The parties represented that this violated minimum-wage and overtime laws.

The parties stated that, if Lazo had prevailed at trial on all claims, he would have recovered approximately $186,762 in unpaid minimum wages, overtime compensation, and a “spread of hours” premium, plus an equal amount in liquidated damages. They also stated that defendants’ extreme financial hardship created significant collection concerns and that the settlement followed extensive, arm’s-length negotiations between experienced counsel and two mediation sessions with a neutral mediator.

Court’s Analysis

The court explained that, in the Second Circuit, parties cannot privately settle claims under the Fair Labor Standards Act and dismiss them under Federal Rule of Civil Procedure 41 without approval from the district court or the Department of Labor. After reviewing the agreement, the court held that it was fair and reasonable based on the nature and scope of Lazo’s claims and the risks and expenses of further litigation.

The court considered the adversarial litigation, the arm’s-length negotiations, the risks faced by both sides, the anticipated costs of continuing the case, defendants’ financial hardship, and the possibility that Lazo might not be able to collect a judgment. The court found no fairness concerns with the compromise.

Attorney’s Fees and Costs

The court GRANTED Lazo’s counsel’s request for $9,803.52 in attorney’s fees and $586.50 in costs. Counsel submitted detailed time records, and the requested hourly rate of $400 was within rates approved in similar wage-and-hour cases. The resulting lodestar—a calculation based on reasonable hours multiplied by reasonable hourly rates—was $14,170, which exceeded the requested fees and supported their reasonableness. The court also found sufficient documentation for the requested costs.

Disposition

The court approved the settlement as fair and reasonable. It ruled that any pending motions were moot, canceled all conferences, and stated that it would retain jurisdiction solely to enforce the settlement agreement. The Clerk of Court was directed to close the case. The opinion does not state that the court decided the underlying wage claims on their merits.