Gonzalez v. Hanover Ventures Marketplace LLC

Background

Denny Gonzalez brought claims under the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL) on behalf of himself and other allegedly similarly situated non-exempt employees. The alleged class included waiters, bussers, food runners, cooks, dishwashers, and bartenders. Gonzalez claimed that the defendants failed to pay required minimum wages and overtime because of an invalid tip credit and time shaving. He also claimed that the defendants failed to comply with NYLL requirements for wage statements and wage notices. He sought unpaid wages, liquidated damages, penalties, attorneys’ fees, and costs. The defendants disputed and continued to dispute those allegations.

The court had conditionally certified an FLSA collective action on January 21, 2022. In an earlier opinion dated March 18, 2024, the court certified an NYLL class and granted in part Gonzalez’s motion for summary judgment on liability for certain claims. The parties then asked the court to stay the case while they participated in mediation and negotiated a settlement. On July 24, 2024, the court denied preliminary approval without prejudice. The parties filed a supplemental letter motion on August 16, 2024.

Rulings

The court conditionally certified the following settlement class and FLSA collective action for settlement purposes only: Gonzalez and all current and former non-exempt employees employed by the defendants from February 16, 2015, through July 1, 2024, who do not opt out of the litigation. The court found that the members were similarly situated for purposes of evaluating the settlement. It authorized the revised notice to potential FLSA collective members, including information about the FLSA claim and their ability to join the lawsuit.

The court also found, solely for settlement purposes, that the proposed class satisfied the requirements of Federal Rule of Civil Procedure 23. It found sufficient numbers of class members, common issues, typical claims, adequate representation, and that common issues predominated over individual issues. The court certified the class for settlement, notice, and payment-distribution purposes only. If the settlement does not receive final approval, is overturned on appeal, or otherwise does not take effect, the litigation will resume, and the defendants may seek to decertify the class or collective action and contest the claims.

Denny Gonzalez was appointed class representative under Rule 23 and the FLSA. C.K. Lee of Lee Litigation Group, PLLC was appointed class counsel, and Arden Claims Service, LLC was appointed claims administrator.

Settlement and Notice

Judge Edgardo Ramos preliminarily approved the settlement agreement and proposed payment-allocation plan. The court found that the settlement was within the range of possible approval, was negotiated at arm’s length, was not collusive, and reflected class counsel’s understanding of the strengths and weaknesses of the case. The court found that the proposed allocation plan was rationally related to the relative strengths and weaknesses of the claims and was also within the range of possible approval.

The court approved the form and method of distributing the class notice. The claims administrator was directed to mail the final notice by first-class mail within 30 calendar days after entry of the order, using addresses from the defendants’ payroll system, and to take reasonable steps to locate corrected addresses when notices were returned. The notice was required to explain the litigation, settlement, attorneys’ fees, participation procedures, opt-out and objection procedures, and how to obtain additional information.

Further Proceedings

The court scheduled the fairness hearing for November 21, 2024, at 10:00 a.m. At that hearing, the court would consider final certification of the class and FLSA collective action, final approval of the settlement and allocation plan, any request for attorneys’ fees and costs, and any service payment to Gonzalez. The parties were required to provide deadlines for opting out and objecting in the class notice, with both deadlines set 45 calendar days after the initial mailing. Gonzalez was required to file the motion for final approval no later than 15 days before the hearing.

The order did not grant final approval or authorize distribution of settlement checks. It stated that a separate dismissal order would be entered only after the parties docketed the list of people who opted in by endorsing their checks and submitted in-camera copies of the endorsed checks.