Santiago v. Rosehill Housing Management Corp.
- Edgardo Ramos
- 1:19-cv-10552
- U.S. District Court · Southern District of New York
- 5
In Santiago v. Rosehill Management, Judge Ramos denied without prejudice approval of an overtime settlement because it barred future employment and lacked fee documentation.
Johnny Santiago, his attorneys, and the defendant parties were affected: the proposed settlement was not approved, and the parties had to revise it or proceed toward trial.
What happened
In Santiago v. Rosehill Management & Maintenance LLC, Johnny Santiago sued Rosehill Management & Maintenance LLC, Claire Vasile, and Nayda Alejandro under the Fair Labor Standards Act for unpaid overtime. The parties asked the court to approve their settlement.
The court found the proposed settlement unfair and unreasonable for two reasons. It barred Santiago from seeking or keeping future work with Rosehill and related entities, and his lawyers did not provide billing records needed to evaluate their request for $11,464 in fees. The court also questioned the size of that request compared with the lawyers’ calculated lodestar of $3,082.50.
Judge Edgardo Ramos denied the request to approve the settlement without prejudice. He allowed the parties until May 27, 2020, either to submit a revised agreement removing the employment ban and supporting the fee request, or to state that they would abandon settlement and proceed toward trial.
The detailed version
- Santiago v. Rosehill Housing Management Corp. · No. 1:19-cv-10552
- Edgardo Ramos
- May 13, 2020
Background
Johnny Santiago brought this Fair Labor Standards Act (FLSA) action against Rosehill Management & Maintenance LLC, Claire Vasile, and Nayda Alejandro, seeking overtime compensation. The parties asked the court to approve a settlement agreement. The court explained that, in this circuit, private settlements of FLSA claims that end the claims permanently require approval by the court or the Department of Labor. The court therefore had to determine whether the agreement was fair and reasonable.
Reasons for rejecting the proposed agreement
The court identified two problems.
First, Section 8 prohibited Santiago from seeking, applying for, continuing, or maintaining employment with Rosehill or any of its parents, subsidiaries, or affiliates, including contract or temporary work. The court described provisions requiring a waiver of future employment as highly restrictive and in tension with the FLSA’s remedial purposes. The parties offered no explanation or legal authority supporting the provision. The court stated that it would not approve the agreement while the future-employment ban remained.
Second, Santiago’s lawyers requested $11,464 in fees, described as one-third of the settlement amount excluding costs, but did not provide the billing records needed to evaluate the request. The court explained that contemporaneous records showing each attorney’s dates, hours, and work are required to calculate a lodestar, meaning the reasonable hours worked multiplied by reasonable hourly rates, and to cross-check a percentage-based fee request.
The lawyers reported that Nicola Ciliotta billed 9.3 hours at $275 per hour and Nicole Grunfeld billed 1.4 hours at $375 per hour, producing a lodestar of $3,082.50. The requested fee was approximately 3.71 times that amount, which the court viewed as potentially excessive. The court also noted that the authority cited for a multiplier as high as 3.71 involved class-action litigation, unlike this case; that the lawyers’ other cited authority involved a lower multiplier; and that the case had settled within a year without motion practice.
Ruling and next steps
The court DENIED without prejudice the parties’ request for approval of the settlement agreement. It gave the parties until May 27, 2020, to choose between two options: submit a revised letter with billing documentation addressing the court’s concerns and a revised agreement without the future-employment ban, or submit a joint letter stating that they intended to abandon settlement and continue to trial. If they chose trial, the court said it would reopen the case and schedule a pretrial conference.
The order addressed approval of the settlement and the proposed attorney-fee allocation; it did not decide whether Santiago was entitled to overtime compensation on the underlying FLSA claim.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.