Camacho v. The Barrier Group Inc.

Background

Luis Sergio Camacho sued The Barrier Group Inc., Sub Enterprises Inc. doing business as Drip Drop Waterproofing, and Joel Reich individually. He asserted claims under the Fair Labor Standards Act (FLSA) and New York Labor Law based on alleged failures to pay overtime wages and provide required wage statements and notices. The opinion states that Camacho was no longer pursuing the wage-statement and notice claims under New York law; those two causes of action had already been dismissed with prejudice.

The parties reached a proposed settlement shortly before trial and asked the court to approve it. In the Second Circuit, a private settlement of FLSA claims requires approval by the district court or the U.S. Department of Labor. The court therefore reviewed whether the agreement was fair and reasonable.

Settlement Terms and Court’s Analysis

The settlement provided for a total payment of $75,000. Camacho would receive $49,350.67, and his counsel would receive $25,649.33, consisting of $24,675.33 in attorneys’ fees and $974 in costs.

Camacho estimated that his maximum possible recovery at trial on his FLSA and New York Labor Law claims would be $553,320, including $276,660 in unpaid overtime wages and an equal amount in liquidated damages. The court recognized that Camacho’s settlement payment was a relatively low percentage of that estimate, but found it reasonable because the agreement was reached on the eve of trial and the court had reviewed the strengths and weaknesses of the parties’ positions through earlier proceedings.

The court found that all five factors supporting approval weighed in favor of the settlement: it provided a reasonable outcome in light of the possible recovery; avoided the costs and burdens of trial and later proceedings; accounted for significant risks faced by both sides; resulted from arm’s-length negotiations between experienced counsel; and showed no sign of fraud or collusion. The court noted risks concerning the parties’ expected testimony, the lack of documentary evidence supporting some testimony, the possibility that a jury might not credit Camacho’s account, and possible difficulty collecting a judgment.

The court also considered factors that can weigh against approving an FLSA settlement. It found no sufficient reason to reject the agreement based on another wage-related lawsuit involving Sub Enterprises Inc. and Joel Reich. The court also found that the release was limited to the wage-and-hour claims in this case and related claims that could have been asserted, and that the agreement contained no confidentiality provision.

Attorneys’ Fees and Costs

The court approved the requested attorneys’ fees and costs. Counsel had submitted time records showing 111.7 hours of work at hourly rates ranging from $175 to $425 for attorneys and $75 for paralegal work. The resulting lodestar—the number of hours multiplied by the hourly rates—was $27,365. The requested fee was approximately 90 percent of that amount, which the court found fair and reasonable. The court also approved $974 in costs, including the filing fee and documented service expenses.

Disposition

The court APPROVED the Proposed Settlement Agreement. It ordered that counsel receive $25,649.33 and Camacho receive $49,350.67. The action was dismissed, without prejudice to restoring it to the court’s calendar if an application was made within 30 days of the decision. The court retained jurisdiction to enforce the settlement agreement, and the clerk was directed to close the case.