Cruz Guerrero v. Montefiore Health System Inc.

Background

Danny Ramirez Cruz Guerrero and Cristopher Ismael Ramirez Morel brought this wage-and-hour class action for themselves and other cleaning workers employed by CSS Building Solutions Inc. who performed cleaning work at Montefiore Health System Inc. facilities. The claims arose under the Fair Labor Standards Act, the New York Labor Law, and New York’s Wage Theft Prevention Act. Plaintiffs alleged that CSS and Montefiore were joint employers and failed to pay overtime and spread-of-hours wages, timely pay wages, and provide accurate wage statements and required wage notices.

After Montefiore challenged certain frequency-of-payment and wage-notice claims, Plaintiffs removed those claims against Montefiore from the operative complaint. Defendants denied the material allegations, including the allegation that CSS and Montefiore were joint employers. The parties later conditionally certified a collective action under the Fair Labor Standards Act, conducted discovery and depositions, and reached a settlement after a settlement conference.

Settlement and Notice

The settlement class includes the named Plaintiffs, opt-in Plaintiffs, and other individuals employed by CSS who performed cleaning duties at Montefiore facilities from March 13, 2016, through October 27, 2022. The total settlement amount is $1,800,000. The net settlement fund is the total amount after deducting the claims administrator’s fees and costs, court-approved attorneys’ fees and costs, and service awards.

The allocation plan distributes the net fund in proportion to each class member’s calculated damages, including unpaid overtime, spread-of-hours pay, frequency-of-payment penalties, liquidated damages, and interest. The settlement is not claims-made: class members who do not timely opt out are automatically sent settlement checks. A class member who deposits a settlement check releases the specified wage-and-hour claims under the Fair Labor Standards Act and New York Labor Law; the agreement states that only class members who deposit their checks release their federal wage claims.

The claims administrator sent notices in English and Spanish to approximately 172 class members. The deadline for exclusions and objections was December 14, 2024. No class member objected or opted out, but the administrator could not deliver notice materials to 38 class members.

Class Certification

The court certified the settlement class under Federal Rule of Civil Procedure 23. It found that the approximately 172-person class satisfied numerosity, commonality, typicality, and adequacy-of-representation requirements. The court also found that common issues predominated and that a class action was the superior method for resolving the claims for settlement purposes.

The court emphasized that this was settlement-only certification and that it was not deciding the ultimate factual or legal merits of the wage claims. The court also noted risks concerning proof of liability and damages, the possibility that Plaintiffs might not recover state-law penalties, and the possibility that class certification would not continue through trial.

Fairness of the Settlement

The court applied Federal Rule of Civil Procedure 23(e) and the factors commonly used to evaluate whether a class settlement is fair, reasonable, and adequate. It found the negotiations procedurally fair because experienced counsel had conducted discovery, reviewed relevant payroll records, taken depositions, engaged in motion practice, and negotiated at arm’s length with the assistance of the court.

The court found the settlement substantively fair. It concluded that continued litigation would be complex, costly, and lengthy; that the parties had sufficient information to assess the case; and that Plaintiffs faced risks in proving liability and damages. The $1.8 million settlement represented 28 percent of the class’s highest possible damages assuming victory on every claim for every class member. The court stated that individual allocations ranged from $500 to $58,000 for individuals who did not opt out. The court found the allocation formula reasonable and approved it.

Fees, Costs, and Service Awards

The court approved attorneys’ fees equal to one-third of the settlement fund, or $600,000. It found the percentage reasonable under the factors governing class-action fee awards and also conducted a lodestar cross-check. Counsel reported approximately 760 hours of work, producing a lodestar of $319,045 and a multiplier of 1.88.

The court granted $5,149.75 in litigation costs and approved $17,802 in administration expenses to be deducted from the settlement fund and paid to Rust Consulting, Inc. It also granted service awards of $15,000 to Danny Ramirez Cruz Guerrero and $10,000 to Cristopher Ismael Ramirez Morel, based on their work and participation in the litigation and settlement process.

Disposition

The court granted the motion for final approval of the settlement, attorneys’ fees, costs, administration expenses, and service awards. The Clerk of Court was directed to terminate the final-approval motion and close the case. The opinion did not decide whether Defendants actually violated the wage laws.