Charles v. HSBC Bank USA, N.A.
- Lorna Schofield
- 1:24-cv-03992
- U.S. District Court · Southern District of New York
- 2
In Charles v. HSBC Bank USA, N.A., Judge Schofield approved the FLSA settlement, dismissed the action, and retained jurisdiction to enforce it.
The plaintiffs and HSBC Bank USA, N.A.; the settlement also determines the payment to plaintiffs’ counsel.
What happened
In Charles v. HSBC Bank USA, N.A., the parties asked the court to approve their settlement of claims under the Fair Labor Standards Act, a federal wage-and-hour law.
The settlement required HSBC to pay $25,000: $15,000 directly to the plaintiffs and $10,000 to their lawyers for fees and expenses. Each plaintiff would receive $7,500, exceeding the estimated maximum unpaid wages of $5,098.50. HSBC denied liability, and the parties said continued litigation would involve significant costs and risks.
The court found the settlement fair and reasonable and approved it. Judge Schofield dismissed the action in its entirety, allowed no additional attorneys’ fees or costs beyond the settlement, retained jurisdiction to enforce the agreement, and dismissed any pending motions as moot.
The detailed version
- Charles v. HSBC Bank USA, N.A. · No. 1:24-cv-03992
- Lorna Schofield
- May 23, 2025
Background
The parties filed a joint letter and settlement agreement in this Fair Labor Standards Act (FLSA) action. They asked the court to approve the agreement under Second Circuit precedent requiring district-court or Department of Labor approval before parties privately settle FLSA claims through a dismissal with prejudice.
The proposed settlement totaled $25,000. Plaintiffs would receive $15,000 directly, with each plaintiff receiving $7,500. The opinion states that this amount exceeded each plaintiff’s estimated maximum unpaid FLSA wages of $5,098.50. Plaintiffs’ counsel would receive $10,000, consisting of $1,488.33 in expenses and $8,511.67 in attorneys’ fees. The requested fees were approximately 34% of the total settlement and less than counsel’s reported lodestar—an estimate of the reasonable value of the lawyers’ time—of more than $50,000.
Parties’ Positions and Settlement Terms
HSBC denied liability and asserted that the plaintiffs had been paid for all hours worked. The parties stated that further litigation would create significant costs and risks, particularly because the claims involved factual disputes about work performed off the clock. The settlement was reached through private mediation and arm’s-length negotiations between represented parties. The court found no indication of fraud or collusion. The release covered only wage-and-hour claims, and the settlement provided plaintiffs with their full claimed back wages.
Ruling
The court approved the Settlement Agreement as fair and reasonable based on the nature and scope of the plaintiffs’ claims and the risks and expenses of additional litigation. The court also determined that the fee request did not present the concerns identified in the cited precedent because it was below the lodestar and less than 40% of the total award.
The court ordered that the action be dismissed in its entirety and that there be no award of attorneys’ fees or costs beyond the amounts provided in the Settlement Agreement. The court retained jurisdiction to enforce the agreement. Any pending motions were dismissed as moot, and all conferences and deadlines were canceled.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.