Wynne v. City of New York

Background

Two hundred twelve plaintiffs brought claims under the Fair Labor Standards Act (FLSA), a federal law governing wages and working hours, concerning their employment by the City of New York. They alleged that the City failed to pay them for work performed before and/or after their scheduled shifts. They also alleged that they worked through five paid meal periods each week and worked 25 minutes before and after every shift.

After a court settlement conference on October 28, 2024, the parties reached an agreement and asked the court to approve it. The proposed settlement required the City to pay $2,900,000 to resolve all claims. That amount consisted of $1,371,000 in backpay and $1,529,000 for liquidated damages, service awards, attorneys’ fees, and litigation expenses.

Settlement Approval

Under Second Circuit precedent, an FLSA settlement must be approved by the district court or the Department of Labor. The court evaluated whether the agreement was fair and reasonable under the circumstances, including the plaintiffs’ possible recovery, the costs and burdens of continued litigation, the litigation risks, the parties’ bargaining process, and any indication of fraud or collusion.

The court found that the settlement represented 47% of the plaintiffs’ best-case damages calculation. The court determined that a substantial reduction from the possible full recovery was justified because the City disputed how many minutes the plaintiffs worked and how regularly they worked before and after shifts or during meal periods. The court also found that continued fact discovery, expert discovery, and trial would require significant resources.

The plaintiffs were represented by counsel, participated in a court-ordered settlement conference, were informed of the settlement terms and their individual payments, and had filed no objections. The court found no evidence of fraud or collusion and found that the agreement’s non-monetary terms imposed no significant burden on the plaintiffs.

Service Awards

The agreement provided three plaintiffs, including the named plaintiff, with $3,000 service awards. The court found the awards reasonable because the recipients assisted with settlement discussions, approved the settlement, and recommended it to the other plaintiffs. The awards totaled 0.3% of the overall settlement.

Attorneys’ Fees and Expenses

The settlement provided $960,790 in attorneys’ fees, equal to one-third of the recovery excluding costs, and $17,630 in litigation expenses. Each plaintiff had signed a contingency-fee agreement providing for a fee of 33 and one-third percent of any recovery.

The court declined to compare the requested contingency fee with counsel’s time and hourly rates through a lodestar cross-check. It reasoned that the fee was governed by the plaintiffs’ advance agreements with counsel, that one-third was customary in FLSA cases, and that there was no indication of fraud, deception, overreaching, or an otherwise unreasonable arrangement. The court also found the requested litigation expenses—including expert, copying, court, and mailing costs—reasonable.

Disposition

The court granted the application to approve the settlement. It dismissed the action with prejudice and without costs except as provided in the settlement agreement. The court retained jurisdiction to enforce the settlement agreement, ruled that any pending motions were moot, and requested that the Clerk close the case.