Ubri v. Majestic Associates LLC

Background

Eduardo Ubri and the defendants jointly sought approval of a settlement in this Fair Labor Standards Act (FLSA) case. Ubri’s amended complaint asserted overtime claims under the FLSA and New York Labor Law, as well as New York claims involving minimum wages, timely payment of wages, split-shift pay, wage statements, and wage notices.

Because the Department of Labor had not approved the settlement, the court was required to determine whether it was fair and reasonable. The court had denied the parties’ first request because their damages estimate considered only the possible recovery on the unpaid-overtime claims, not the other claims in the amended complaint.

Settlement Amount and Risks

The settlement provided for a total payment of $40,000. The parties calculated Ubri’s possible total recovery at approximately $84,833.45, including unpaid wages, liquidated damages, minimum-wage damages, split-shift damages, and statutory damages for notice and recordkeeping violations. After the deductions identified in the settlement materials for attorneys’ fees and costs, Ubri’s stated actual recovery was $26,049.33, or approximately 31% of the estimated maximum recovery.

The court found that amount reasonable in light of the risks. The defendants maintained that Ubri was an independent contractor and therefore was not covered by the FLSA or New York Labor Law. The court also noted issues concerning whether one defendant had been properly served and whether the defendants could withstand a larger judgment. The court further observed that recovery for the notice and wage-statement claims could be complicated because Ubri’s complaint and settlement papers did not specifically allege concrete harm from the missing notices or records.

The court found no indication of fraud or collusion and found that the agreement resulted from arm’s-length negotiations between experienced counsel.

Release and Non-Disparagement Terms

The release covered known and unknown wage-related claims arising under the FLSA, New York Labor Law, or other laws regulating payment of wages, and was limited to claims predating the settlement agreement. The court found that limitation acceptable.

The agreement also required Ubri and individual defendant Joshua Balsam to refrain from conduct or public comments that would materially damage the other’s reputation, goodwill, or standing. The court approved the provision because it expressly allowed truthful statements about the settlement and the parties’ experience litigating the case.

Attorneys’ Fees and Costs

The agreement awarded plaintiff’s counsel attorneys’ fees and costs. The court found the requested attorneys’ fee reasonable because the fee was approximately one-third of the total recovery, counsel’s billing rate was within rates the district had found reasonable, and counsel’s reported hours were reasonable. The court also found that the requested fees and costs were slightly below the amount produced by the hourly-rate calculation, known as the lodestar.

Disposition

The court approved the Settlement Agreement and granted the parties’ joint motion seeking approval. It dismissed the action with prejudice under Federal Rule of Civil Procedure 41(a), meaning the action was terminated and could not be refiled as the same case. The court retained jurisdiction solely to enforce the Settlement Agreement.