Troncoso v. Tejeda

Background

Roberto De Jesus Troncoso sued 735 Supermarket Corp., Wilmer Tejeda a/k/a Wilbis G. Gonzalez, and Rosanna C. Tejeda de Gonzalez. He alleged violations of the Fair Labor Standards Act (FLSA), the federal wage law, and the New York Labor Law. The alleged violations involved unpaid minimum wages and overtime, recordkeeping and wage-statement violations, and retaliation.

After the parties reached a settlement, Troncoso asked the court to approve it. The opinion states that the court had previously rejected an initial agreement because it was not negotiated at arm’s length between experienced counsel. The parties later disavowed that agreement and negotiated the revised settlement with counsel’s involvement. The court also found that the revised release was narrower than the earlier release: it covered only wage-and-hour and retaliation claims arising from Troncoso’s employment through the date the settlement was signed, rather than prospective or discrimination claims.

Settlement Terms and Fairness Analysis

The revised settlement provides a total recovery of $4,000, including attorney’s fees and costs. Troncoso will ultimately receive $3,000, while his attorney, Colin Mulholland, will receive $1,000 including costs. Troncoso estimated that his unpaid wages and overtime could total as much as $10,206, and that his best possible recovery, including liquidated damages, would be about $32,500. His net settlement recovery therefore represented 29 percent of the alleged unpaid wages and 9 percent of the best-case recovery described in the opinion.

The court acknowledged that this recovery rate was lower than rates typically approved in the Southern District of New York, but concluded that it was not dramatically lower. The defendants maintained that they had paid all wages due. The court also considered the stated risk that a factfinder could conclude that Troncoso worked fewer hours and was entitled to less because he lacked documentation of his hours and pay. In light of those risks, the court found the recovery reasonable.

The court considered the usual fairness factors, including the possible recovery, the parties’ ability to avoid the burdens and expenses of litigation, litigation risks, whether the agreement resulted from arm’s-length bargaining, and the possibility of fraud or collusion. It concluded that the revised agreement satisfied those factors and was fair and reasonable.

Attorney’s Fees

The court separately assessed the requested $1,000 fee and cost award. Mulholland submitted contemporaneous billing records showing 4.8 hours of work at $375 per hour and $825 in costs. The court calculated a lodestar—the reasonable hourly rate multiplied by the reasonable hours—as $1,800 in fees plus $825 in costs. Because the requested $1,000 award was one-fourth of the total settlement and was below the lodestar calculation, the court found it reasonable.

Ruling

Judge Analisa Torres granted Troncoso’s motion for settlement approval and ordered the settlement. The clerk was directed to terminate pending motions, vacate all deadlines and conferences, and close the case. The court will retain jurisdiction to enforce the settlement for one year from the date of the order.