Vazquez v. Montefiore Health System Inc.

Background

Angelique Vazquez sued Montefiore Health System Inc. and Montefiore Mount Vernon Hospital under the federal Fair Labor Standards Act (FLSA) and New York Labor Law. She alleged that she worked about 46.5 to 49 hours per week, was paid a fixed weekly salary, was improperly treated as exempt from overtime requirements, and was not paid overtime premiums for hours over 40 per week. She sought unpaid overtime, liquidated damages, statutory damages, interest, attorneys’ fees, and other relief.

The case was initially filed as a proposed collective action, but the court never conditionally certified it and no other employee joined. The parties later submitted a consent motion asking the court to approve their settlement under the procedure required for many FLSA settlements.

Settlement Terms and Fairness

The proposed settlement required the defendants to pay $10,000 total. The agreement allocated $3,198.34 to Vazquez for alleged liquidated damages, $3,198.33 to her for alleged back wages, and $3,603.33 to Brown Kwon & Lam, LLP for attorneys’ fees and costs. Her net recovery after fees and costs would be $6,396.67.

Vazquez estimated that her possible recovery ranged from $0 to $87,807.24 and that her alleged unpaid wages totaled $43,903.62 before other potential damages. The court treated the net payment as approximately 14.6% of her total alleged damages. It found that amount reasonable because the defendants disputed her allegations and asserted that she did not work more than 40 hours per week and qualified for the administrative exemption. The court also considered the risks and costs of further discovery, motion practice, and trial.

The court found that the settlement was negotiated competently, in good faith, and at arm’s length, with no evidence of fraud or collusion. Because no other employees had joined the case, the court also found no known similarly situated plaintiff who would be affected by the settlement.

Release Provision

The agreement released the defendants from claims under the FLSA, New York Labor Law, and any federal, state, or local wage statute, code, or ordinance concerning wage-and-hour matters. The court held that this language was too broad. Although the release concerned wage-and-hour issues, it was not limited to claims arising from the same underlying facts as Vazquez’s claims in this action. The court therefore would not approve the agreement as submitted.

Other Provisions

The court approved the mutual non-disparagement clause because it allowed the parties to make truthful statements about their experiences litigating the case. The court also found the requested attorneys’ fees and costs reasonable. Counsel sought $3,198.33 in fees and $405 in costs, and counsel provided contemporaneous billing records supporting the request.

Disposition

The court denied the parties’ motion for settlement approval without prejudice. It stated that the parties may reapply for approval of a settlement that complies with the order.