Hawkins v. Hagler

Background

Melvina Hawkins sued Sandra Hagler, Domalosa Inc. doing business as Iris Farms, James McCarl, and The Law Firm of James R. McCarl and Associates. She alleged violations of the Fair Labor Standards Act (FLSA) and New York Labor Law based on unpaid overtime and failures to provide wage statements and payroll notices. The parties disputed whether Hawkins worked overtime and whether she was properly compensated. The defendants denied her allegations.

The parties completed discovery, engaged in motion practice, and were preparing for a trial set for May 5, 2025. They jointly asked the court to approve their settlement under the Second Circuit’s requirement that covered FLSA settlements receive court or Department of Labor approval.

Settlement Approval

The court applied the factors used to decide whether an FLSA settlement is fair and reasonable. Those factors include the plaintiff’s potential recovery, the expenses and burdens avoided by settling, the risks of continuing to trial, whether the negotiations were conducted at arm’s length by experienced counsel, and whether fraud or collusion was involved.

The agreement provided for a total settlement of $22,500. Hawkins would receive $10,769.20, and her counsel would receive $11,730.80, consisting of $9,000 in attorney’s fees and $2,730.80 in costs. Hawkins estimated her maximum total damages at approximately $30,517.79. The court stated that the settlement represented more than 70 percent of that maximum recovery before fees and costs and approximately 35 percent after fees and costs.

The court found that settlement would avoid further trial-preparation expenses and the costs of trial. It also found that both sides faced litigation risks because proving FLSA liability was fact-intensive and the parties disputed the overtime facts and available defenses. The negotiations involved multiple demands and counteroffers and a court settlement conference. The court found no reason to believe the agreement resulted from fraud or collusion.

The court also found no factors weighing against approval. The case involved only Hawkins, the court was unaware of similarly situated employees, Hawkins’s employment had ended, and the court was unaware of a history of FLSA noncompliance by the employer. The agreement contained no confidentiality or non-disparagement provisions, and its release was limited to the wage-and-hour claims asserted or that could have been asserted in the case.

Attorney’s Fees and Costs

The court recognized that the requested attorney’s fees were about 40 percent of the total settlement, above the one-third amount courts in the Circuit commonly use as a guideline. It nevertheless found special circumstances supporting the request. The case had been contested for several years in New York state court and federal court, involved discovery and motion practice, and required substantial pretrial work. Counsel reported 163.49 hours of work by four attorneys at hourly rates ranging from $125 to $450, producing a stated lodestar amount of $47,332.25. A lodestar is a calculation based on reasonable hours multiplied by reasonable hourly rates. The requested $9,000 fee was about 19 percent of that stated lodestar amount.

The court approved the $2,730.80 cost request but required counsel to submit a declaration within one week confirming that the itemized costs were actually incurred and detailing the $1,000 fee dated October 12, 2021. The listed costs included a filing fee, service-of-process fee, court-reporter charges, an unexplained $1,000 fee, and the cost of sending a letter to the judge.

Disposition

The court found the proposed settlement fair and reasonable and APPROVED the settlement agreement filed at ECF No. 73-1. The court directed Hawkins’s counsel to submit the cost declaration within one week. It also directed counsel to submit a Stipulation of Discontinuance after the settlement was fully paid and the payment had cleared for Hawkins and her counsel.