Herrera Isidoro v. La Fonda Restaurant and Tapas Bar Inc.

Background

Raquel Herrera Isidoro brought this Fair Labor Standards Act case individually and on behalf of others similarly situated against La Fonda Restaurant and Tapas Bar Inc., doing business as La Fonda Boricua, and Denisse Ayala Garcia and Jorge Ayala. On August 7, 2020, the parties filed a settlement agreement and plaintiff’s counsel filed a statement explaining its basis, as required for court review under the Second Circuit’s decision in Cheeks v. Freeport Pancake House, Inc.

Initial review and revised submission

On August 11, 2020, the court declined to approve the settlement because the submission did not state the parties’ positions on the proper value of plaintiff’s claims or explain how the amount plaintiff would receive compared with her potential Fair Labor Standards Act recovery. It also did not provide the amounts paid for a full release of her other state-law claims.

The court ordered the parties to submit a joint letter and ordered defendants’ counsel to state whether defendants consented to the court retaining jurisdiction to enforce the settlement. On August 25, 2020, plaintiff’s counsel filed a revised explanation and an attached damages chart addressing the deficiencies. The court stated that, although the submission was not clear in every respect, it complied with the August 11 order.

Court’s analysis

In reviewing the proposed settlement, the court considered the risks and costs of continued litigation; plaintiff’s representation by counsel experienced in wage-and-hour litigation; the absence of confidentiality and non-disparagement provisions; the release’s limitation to claims specifically related to the litigation; the parties’ desire to resolve the case early; the parties’ positions on the claims’ value; and the payment breakdown compared with plaintiff’s potential recovery and the value of the release of other state-law claims.

The court found that the settlement was fair and reasonable and resulted from arm’s-length negotiations rather than fraud or collusion. It also found the attorneys’ fees, equal to one-third of the total recovery, fair and reasonable under the circumstances.

Disposition

The court approved the parties’ settlement agreement, granted plaintiff’s request that the court retain jurisdiction to enforce the agreement, and instructed the Clerk to close the case.