Reyes v. Gracefully, Inc.
- Valerie Caproni
- 1:17-cv-09328
- U.S. District Court · Southern District of New York
- 2
In Reyes v. Gracefully, Judge Caproni declined to approve the proposed settlement because its payment schedule and broad release were unfair.
The proposed settlement parties, including Cresenciano Reyes, the other plaintiffs described as similarly situated, the named defendants, and the plaintiffs’ attorneys, were affected because the court required changes to the payment schedule and release before approval.
What happened
In Reyes v. Gracefully, Inc., the parties submitted a settlement agreement for court approval. Reyes brought the case for himself and others similarly situated, and the proposed release referred to wage-and-hour claims.
The court found that the payment schedule was unfair because it paid legal fees before the plaintiffs were paid. It also found the general release unacceptable because it was not limited to the wage-and-hour claims raised in the case.
Judge Valerie Caproni ordered that the settlement would not be approved as written. She said the court would approve a revised agreement meeting those requirements and required the parties to resubmit it by February 20, 2020, or attend a conference on February 21, 2020.
The detailed version
- Reyes v. Gracefully, Inc. · No. 1:17-cv-09328
- Valerie Caproni
- Feb. 10, 2020
Background
Cresenciano Reyes sued Gracefully, Inc., doing business as Gracefully Deli East Village; Foodex LLC, doing business as Gracefully Deli Upper West Side; FoodMood LLC, doing business as Gracefully; Joel Dancyger; Grace Dancyger; and Victuals, LLC. The caption states that Reyes brought the case on behalf of himself and all others similarly situated. The parties submitted a settlement agreement for approval under Cheeks v. Freeport Pancake House, Inc.
Reasons for the Court’s Decision
The court would not approve the settlement in its current form for two stated reasons:
1. Payment schedule: The court found the schedule unfair to the plaintiffs because it provided for legal fees to be paid before the plaintiffs were paid. If the defendants made two equal installment payments, the court would approve either a schedule dividing each installment proportionally between the plaintiffs and their attorneys or a schedule allocating the installments entirely to the plaintiffs. The second payment would then pay the remaining amounts owed under the settlement agreement.
2. General release: The court found the general release in Section 6 unacceptable as written. It stated that a fair release must be limited to the wage-and-hour claims raised in this case.
Order and Next Steps
The court did not approve the settlement as written. It stated that it would approve a revised settlement agreement consistent with the order. The parties had to resubmit the agreement by February 20, 2020, or appear for a conference on February 21, 2020, at 10:00 a.m. The order did not decide the merits of the underlying wage-and-hour claims.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.