Chang v. Philips Bryant Park LLC.

Background

Andrew Chang and Ryan Santos brought claims for themselves and other allegedly similarly situated employees under the Fair Labor Standards Act (FLSA) and New York Labor Law. The opinion says the plaintiffs were employed by the defendants as hourly, non-exempt employees. They alleged that the defendants failed to pay overtime premiums and wages affected by time shaving, retained tips from private catering events, improperly deducted and retained portions of room-service tips, and owed liquidated damages, attorneys’ fees, and costs. The defendants disputed the allegations and denied liability.

After a private mediation, the parties negotiated a proposed settlement. The plaintiffs moved for preliminary approval, conditional certification of a settlement class under Federal Rule of Civil Procedure 23, conditional approval of a related FLSA collective action, approval of notice materials, and scheduling of a fairness hearing. No objections were filed to Magistrate Judge Cave’s Report and Recommendation.

Court’s review and rulings

The court reviewed the Report and Recommendation for clear error because no timely objection had been made. Finding no clear error, Judge Laura Taylor Swain adopted the report in its entirety.

The court conditionally certified, for settlement, notice, and distribution purposes only, a Rule 23 class consisting of the named plaintiffs and up to 367 current and former hourly, non-exempt employees employed by the defendants from November 13, 2011, through July 30, 2018. The court found that the proposed class met the Rule 23 requirements concerning numerosity, common issues, typical claims, adequate representation, predominance of common issues, and superiority. The court did not decide manageability because certification was for settlement purposes only. If the settlement does not receive final approval or otherwise does not become effective, the conditional certification will be dissolved, and the parties will retain their stated rights concerning certification and the merits.

The court also found that the proposed class members were similarly situated for purposes of the settlement and conditionally certified the group as an FLSA collective action. It authorized notice explaining the FLSA claim and the ability to join the lawsuit. A class member who signs, negotiates, endorses, deposits, or cashes a settlement check will opt into the lawsuit for settlement purposes and release claims as described in the settlement agreement.

Settlement and notice

The court granted preliminary approval to the settlement agreement and plan of allocation. It found that the settlement was within the possible range for approval, was negotiated at arm’s length and was not collusive, and that class counsel understood the strengths and weaknesses of the case. The court also found that the allocation plan was rationally related to the relative strengths and weaknesses of the claims and was within the possible range for approval.

The court approved the amended class notice and change-of-address form and approved the proposed distribution method. Defendants were required to provide class-member information to the claims administrator and class counsel within 14 calendar days after entry of the order. The claims administrator was required to mail the notice materials within 30 calendar days, use reasonable steps to address returned mail, and perform other administration required by the settlement agreement.

The court appointed Andrew Chang and Ryan Santos as class representatives, C.K. Lee of Lee Litigation Group PLLC as class counsel, and Rust Consulting as claims administrator.

Further proceedings

The court scheduled a fairness hearing for May 21, 2020, at 2:30 p.m. to consider final certification of the settlement class and FLSA collective action and final approval of the settlement and allocation plan. The court also stated that it would consider any request for attorneys’ fees, expenses, or service payments at that hearing. Class members could opt out or submit objections by the deadline specified in the notice, which was to be 45 calendar days after the initial mailing. The parties were required to file a joint motion for judgment and final approval no later than 21 days before the hearing, and any fee application no later than 28 days before the hearing.

The order was therefore a preliminary settlement-management order. It did not finally approve the settlement, enter judgment, or resolve the plaintiffs’ allegations on the merits.