Garcia v. Chipotle Mexican Grill, Inc.
- Edgardo Ramos
- 1:16-cv-00601
- U.S. District Court · Southern District of New York
- 3
In Garcia v. Chipotle, Judge Ramos would not approve an FLSA settlement until the parties supplied records supporting the proposed attorney-fee amount.
The ruling affected Emanuel Garcia, the 80 opt-in plaintiffs, their attorneys, and Chipotle Mexican Grill, Inc. by requiring additional support for the proposed settlement’s attorney-fee award before court approval.
What happened
In Garcia v. Chipotle Mexican Grill, Inc., Emanuel Garcia and 80 additional plaintiffs alleged that Chipotle owed them unpaid wages under the Fair Labor Standards Act and New York Labor Law. The parties asked the court to approve an $85,000 settlement, including $25,000 for plaintiffs’ attorneys’ fees and costs.
The court found that the proposed agreement did not include billing records showing each attorney’s work, hours, and hourly rate. Without those records, the court could not evaluate whether the proposed fees were reasonable, even though they were less than one-third of the settlement.
Judge Ramos stated that the court would not approve the settlement unless the parties corrected this problem. The parties could submit a revised agreement with fee documentation, abandon the settlement and continue toward trial, or agree to dismiss the case without prejudice.
The detailed version
- Garcia v. Chipotle Mexican Grill, Inc. · No. 1:16-cv-00601
- Edgardo Ramos
- Dec. 5, 2019
Background
Emanuel Garcia, 80 opt-in plaintiffs, and the collective group of plaintiffs sued Chipotle Mexican Grill, Inc. under the Fair Labor Standards Act of 1938 (FLSA) and the New York Labor Law, alleging unpaid wages. Garcia had worked for Chipotle as a grill man/crew member and later as an hourly manager. The court had previously granted Garcia’s request for conditional collective certification.
The parties jointly asked the court to approve a settlement agreement and release. The maximum calculated liability for the collective group was $301,319. The proposed settlement amount was $85,000, including $25,000 for plaintiffs’ attorneys’ fees and costs. The proposed agreement provided that the plaintiffs would receive shares based on a formula considering the number of weeks each had worked.
Court’s Analysis
The court explained that, in the Second Circuit, parties cannot privately settle FLSA claims with prejudice without approval from the district court or the Department of Labor. The court therefore had to determine whether the agreement was fair and reasonable.
The court found that the proposed settlement was deficient because the parties had not provided documentation supporting the requested attorneys’ fees. A proper fee request requires contemporaneous billing records showing, for each attorney, the date of the work, the hours spent, and the nature of the work. Courts generally use the “lodestar” method—reasonable hours multiplied by a reasonable hourly rate—as a measure of reasonable fees and may use it as a cross-check even when the proposed fees are less than one-third of the settlement.
Because the submission contained no billing records, the court stated that it could not assess whether the proposed attorneys’ fees were reasonable.
Disposition
The court stated that it would not approve the settlement unless the parties corrected the missing fee documentation. It gave the parties three options by January 6, 2020: submit a revised agreement with documentation supporting the attorneys’ fees; file a joint letter stating that they intended to abandon the settlement and continue to trial, after which the court would reopen the case and schedule a pretrial conference; or stipulate to dismissal of the case without prejudice. The opinion does not state that the court approved the settlement.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.