Strauss v. Little Fish Corp.

Background

Kyle Strauss sued Little Fish Corporation, doing business as Carmine’s Italian Restaurant, and Alicart, Inc., doing business as Alicart Restaurant Group. He alleged that the defendants retaliated against him in violation of the federal Fair Labor Standards Act (FLSA) and New York Labor Law. According to the allegations described in the opinion, Strauss had participated in an earlier wage-and-hour class action involving the restaurants. He claimed that a manager sent him home after he took a short cigarette break and that he was later fired for allegedly “stealing company time,” when the real reason was his participation in the earlier action.

The parties first submitted a settlement agreement that contained a broad, one-sided release, restrictive confidentiality language, and no supporting documentation for the requested attorney’s fees. After the court raised concerns about those terms and Strauss’s understanding of the agreement, the parties submitted a revised agreement.

Revised Settlement

The revised agreement required the defendants to pay a total of $9,000 in three categories: $2,875 for lost wages, subject to applicable payroll taxes and deductions; $2,875 in compensatory damages; and $3,000 in attorney’s fees plus $250 in costs. Strauss agreed that the settlement represented the full amount he was entitled to receive under the wage-and-hour statutes, including liquidated damages and fees, and agreed to dismissal of the case with prejudice.

The revised agreement also contained a mutual general release covering claims arising from the parties’ employment relationship or its separation, except claims that cannot legally be released or waived. It preserved Strauss’s ability to file a claim with or participate in investigations by agencies including the Equal Employment Opportunity Commission and the National Labor Relations Board. The agreement permitted Strauss to discuss the existence and execution of the agreement and the earlier action, but also included confidentiality and non-disparagement restrictions.

Court’s Analysis

Under Second Circuit precedent, a court must review and approve an FLSA settlement that dismisses FLSA claims with prejudice. The court evaluated separately whether the settlement terms were fair and whether the attorney’s-fee award was reasonable.

The court found the $9,000 payment fair in light of Strauss’s limited alleged lost wages, the possible statutory penalties, and the substantial risks of proving that the defendants acted because of his protected activity. The court noted the defendants’ stated evidence that the managers did not know Strauss was part of the earlier action, that no other participants appeared to have been retaliated against, and that Strauss was terminated for insubordination and repeated policy violations. The court also found that the settlement resulted from arm’s-length negotiations between experienced counsel, with the assistance of mediation, and found no evidence of fraud or collusion.

The court approved the mutual general release because Strauss no longer worked for the defendants, the case was not a class action, and the mutual release allowed both sides to end their relationship without fear of further claims. The court also concluded that the settlement’s retaliation-only claims did not present the same concerns about broad confidentiality provisions as ordinary wage-payment claims, because the retaliation allegations were specific to Strauss and the agreement did not restrict discussion of the earlier wage-and-hour action.

For attorney’s fees, the court required and reviewed contemporaneous time records showing the dates, hours, and work performed, along with information about counsel’s practice. The court found the requested $3,000 fee and $250 in costs reasonable, noting that the fee closely matched the documented work and represented one-third of the settlement consideration.

Disposition

The court APPROVED the settlement. It DISMISSED the case WITH PREJUDICE and directed the clerk to close the case.