Patrascu v. Frederic Fekkai New York LLC
- Valerie Caproni
- 1:19-cv-01376
- U.S. District Court · Southern District of New York
- 3
In Patrascu v. Frederic Fekkai New York LLC, Judge Caproni did not approve proposed settlements because several terms were unfair.
The proposed settlements for Plaintiffs Doina Patrascu and Mariana Babes were not approved; the parties could submit revised agreements addressing the specified provisions.
What happened
In Patrascu v. Frederic Fekkai New York LLC, the parties asked the court to approve proposed settlements for Doina Patrascu and Mariana Babes in a wage-and-hours case. The proposed agreements provided Patrascu $45,000 and Babes $1,750.
The court found that several settlement terms were unreasonable. These included a broad release of claims, a speech restriction that lacked an exception for truthful statements about the case, and a statement that Plaintiffs had been paid correctly under wage laws. The court also reviewed the attorneys’ rates, hours, and the circumstances of the proposed payments.
Judge Valerie Caproni ordered that the settlement agreements were not approved. She stated that the court would be prepared to approve revised agreements removing or changing the unreasonable provisions.
The detailed version
- Patrascu v. Frederic Fekkai New York LLC · No. 1:19-cv-01376
- Valerie Caproni
- May 19, 2020
Background
Doina Patrascu and Mariana Babes sued Frederic Fekkai New York LLC in a wage-and-hours case. The parties submitted proposed settlement agreements and supporting materials for court approval under the requirement recognized in Cheeks v. Freeport Pancake House, Inc. that certain wage-related settlements be reviewed for fairness and reasonableness.
The proposed settlement provided Patrascu $45,000, with $15,400 apportioned to counsel. Patrascu alleged that she was owed approximately $17,400 in unpaid wages and $76,375 in unlawfully retained gratuities. The proposed settlement provided Babes $1,750, with no amount apportioned to counsel. Babes alleged that she was owed $470.45 in unpaid wages and $54,950 in unlawfully retained commissions. Counsel represented that discovery showed Defendant had compensated Babes lawfully and that she likely would receive no damages at trial.
Court’s Analysis
The court found that attorney Mr. Lipsky’s hourly rate of $400 was reasonable, but that attorney Ms. Isaacson’s $300 hourly rate was unreasonable. The court found that $250 per hour for Ms. Isaacson’s work would be reasonable. It also found that the hours spent on the matter were slightly high, noting that more than ten hours had been spent drafting the settlement-approval motion. After accounting for those adjustments, the court found the fee calculation’s multiplier—an amount used to account for the risk of contingent-fee litigation—reasonable because it was less than two.
The court found that several circumstances supported the settlements’ reasonableness, including Patrascu’s decision to prioritize a quick recovery while addressing a recent medical diagnosis, the greater-than-usual complexity created by the retaliation and gratuities allegations, and the requirement that Patrascu receive the full settlement amount within 21 days.
The court nevertheless found specific settlement terms unreasonable. Paragraph 5 operated as an overly broad general release, contrary to the parties’ representation that the releases were limited. Paragraph 7’s non-disparagement provision was reasonable because it allowed discussion of the action, but paragraph 10 unreasonably restricted and compelled Plaintiffs’ speech because it lacked the same exception. Paragraph 8 also improperly stated that Defendant had paid Plaintiff correctly under all applicable wage-and-hour laws, conflicting with Plaintiffs’ positions in the lawsuit.
Disposition
The court ordered that the settlement agreements were not approved as fair and reasonable. It stated that it would be prepared to approve revised agreements that omitted the general release in paragraph 5, did not prevent Plaintiffs from making truthful statements related to the action, and omitted the statement that Plaintiffs had been paid in accordance with the law or otherwise accounted for Plaintiffs’ positions in the case.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.