Pastor v. Sagal Fish Market Inc.

Background

Lourdes Pastor brought wage-and-hour claims against Sagal Fish Market Inc., Fernando Sanchez, and Adalgisa Hernandez. She alleged that the defendants violated the Fair Labor Standards Act (FLSA) and various provisions of the New York Labor Law by failing to pay the lawful minimum wage and overtime compensation and by failing to provide proper wage and notice statements.

The parties jointly moved for approval of a settlement agreement. The agreement provided for a total payment of $23,000. Pastor would receive $14,593.10, while her counsel would receive $8,406.90 in attorney fees and costs.

Court’s analysis

The court explained that, in the Second Circuit, parties generally cannot privately settle FLSA claims with prejudice without approval from the district court or the Department of Labor. The court therefore considered whether the agreement was fair and reasonable under the totality of the circumstances.

Pastor estimated that her maximum recovery would be approximately $42,000 for unpaid wages, liquidated damages, statutory penalties, interest, and attorney fees. The court approved the settlement amount because it gave Pastor compensation without the risks, delay, and expense of continued litigation. The defendants disputed the number of hours Pastor worked and the wages she received, including whether she took days off, arrived later than alleged, or took extended periods away from work. The defendants also said they had not maintained complete and accurate time and pay records and could not afford a large settlement or judgment. The court found that these disputes and risks supported the settlement as a reasonable compromise reached through arm’s-length negotiations by experienced wage-and-hour attorneys.

The court also found the attorney fees and costs reasonable. Counsel requested approximately one third of the settlement, or $8,406.90. One attorney, Lina Stillman, submitted billing records reflecting a claimed 21.02 hours at $400 per hour, producing a lodestar of $8,408.00. A lodestar is an estimate of reasonable attorney compensation calculated by multiplying a reasonable hourly rate by the reasonable number of hours worked. The court accepted a multiplier of approximately one and approved the requested $8,406.90.

The court found the agreement’s other provisions fair and reasonable. The release covered only claims under the FLSA, the New York Labor Law, and Pastor’s wage-and-hour allegations arising from her employment with the defendants. The agreement contained no confidentiality or non-disparagement provisions and no objectionable release provisions.

Disposition

Judge Edgardo Ramos granted the motion for settlement approval. The clerk was directed to terminate the motion and close the case. The opinion approved the settlement; it did not decide whether the defendants had actually violated the wage laws.