Villatoro v. The Hummus & Pita Company, Inc.

Background

Bilelio Villatoro and Daniel Silva Garcia a.k.a. Apolinar Silva brought wage-and-hour claims individually and on behalf of others similarly situated against The Hummus & Pita Co. Inc., The Hummus & Pita Franchising, LLC, Hupico LLC, and the individual defendants identified in the caption. Counsel for the parties submitted a proposed settlement for approval under the requirement that courts review settlements of claims under the Fair Labor Standards Act.

The proposed settlement provided for a total recovery of $225,000. It awarded $76,378.40 to plaintiffs’ counsel for fees and costs. The court noted that the requested fee was approximately 2.5 times counsel’s lodestar, meaning the amount calculated from the lawyers’ reasonable hours multiplied by appropriate hourly rates, after reducing the stated $450 and $400 billing rates by 10 percent.

Reasons for Nonapproval

The court ordered that the proposed settlement was not approved as fair and reasonable at that time. It identified several concerns:

- The agreement contained a general release, meaning a release of claims beyond the wage-and-hour allegations in this case. The court said it was unlikely to approve a release covering claims unrelated to those wage claims and not arising from the same core facts. - The agreement included non-publicity and non-disparagement provisions that restricted the parties from contacting the press or using social media to discuss the action or settlement. The court found those provisions overbroad because they could restrain truthful statements about the plaintiffs’ experience litigating the case. - The agreement attempted both to limit and to require the content of responses to press inquiries. It required the parties to tell the press only that the confidentiality provision existed and that the matter had been resolved to the parties’ mutual satisfaction.

Additional Orders and Disposition

The court ordered plaintiffs’ counsel to certify that each plaintiff could satisfy the requirement of providing a valid Social Security number or tax identification number. It also ordered that Paragraph 1C be clarified to show that plaintiffs’ counsel, rather than the plaintiffs, would receive an Internal Revenue Service Form 1099.

The parties were ordered to submit a revised settlement agreement consistent with the order by December 2, 2019. The court stated that it was unlikely to approve an agreement restricting truthful statements, whether on social media or to the press and regardless of who initiated the inquiry, or containing an unrelated release of claims. The November 15, 2019 status conference was adjourned to December 6, 2019, at 10:00 a.m. Judge Valerie Caproni signed the order. The order did not finally approve the proposed settlement.